Monday, 26 September 2016

Proposed Assets Sale: Senator Abaribe Fears Proceed Could Be Frittered Away

One of such is the Chairman, Senate
Committee on Power Steel Development
and Metallurgy, Enyinnaya Abaribe, who
believes such plan is as good as putting
the country in the hands of a few
people.

He expressed fears that proceeds from
sold assets could be frittered away,
putting the nation in a direr situation.
Lack Of Confidence
Mr Abaribe was speaking on Channels
Television’s breakfast programme
Sunrise Daily on Monday.
“The fear is; assuming you sell
everything and it comes in and goes out
in the same process without affecting
the real sector which is the
manufacturing sector, where will you
be?
“That is why you see divided opinions in
the Senate among those who
contributed to the debate on the assets’
sale proposal.
“They say, there are several ways that
you can reflate an economy and not just
by one set of policy.
“There is a lack of confidence in the
economy today and once there is no
confidence in the economy, you will
find someone that wants to find a safe
haven,” Senator Abaribe pointed out.
He stressed the need for the
government to bring back the people’s
confidence.
Also speaking on the issue of assets
sale, an energy economist, Mr Onuoha
Nnaji, has challenged the government to
come up with better strategies to
reverse the current recession.
In his view, the government should think
of ways of keeping oil production at
benchmark levels by working with the
Niger Delta militants regarding the
protection of the oil facilities.
The Senate President, Dr. Bukola Saraki,
had at a plenary asked the executive to
raise capital from the sale
of government assets and other sources
to shore up reserves.
Senator Saraki made the
recommendation as the Senate resumed
plenary after a seven weeks’ recess.
Addressing lawmakers, Senator Saraki
said that the sale of assets would calm
investors, discourage currency
speculation and stabilise the economy.
After the Senate President made the
proposal, the National Economic Council
approved President Muhammadu
Buhari’s strategies to pull the economy
out of recession.
This was done during its meeting in
Abuja, chaired by the Vice President,
Professor Yemi Osinbajo on September
22.
The council of ministers and governors
debriefed the Finance Minister, Mrs
Kemi Adeosun and the Minister of
Budget and National Planning, Mr
Udoma Udo Udoma as well as the CBN
Governor, Godwin Emefiele on the
strategies to take the country out of the
woods.
Briefing State House correspondents
after the closed-door meeting, the
Deputy Governor of Ogun State, Yetunde
Onanuga, said that the Central Bank
would henceforth adopt best options to
manage the situation.
Fiscal Stimulus Plan
The plan triggered mixed reactions
which the Minister of Budget and
National Planning tried to address in a
statement.
Senator Udo Udoma said Nigeria needed
enough money to get the economy back on
the path of recovery
Senator Udo Udoma, said that the
primary objective of government’s fiscal
stimulus plan was not to sell off all
major critical national assets but to
source immediate funds to reflate the
economy and implement capital projects
in the 2016 budget.
Senator Udoma gave the explanation in
Lagos at the weekend while briefing
reporters on the forthcoming Nigerian
Economic Summit.
He said the intention of the government
was just to get enough money to fund
the 2016 budget and get the economy
back on the path of recovery.
Government, he stated, needed to inject
a large dose of funds into the system to
get the economy back on track and to
faithfully implement the provisions in
the capital budget tailored at reflating
the economy and aiding the
diversification process.
Senator Udoma further explained that
the country had lost almost half its
expected revenue and would need to
urgently source for the shortfall to
enable the government faithfully
implement the budget.
“This unfortunate scenario prompted the
Economic Management Team to
urgently work out a fiscal stimulus plan
to generate immediate large injection of
funds into the economy through asset
sales, advance payment for license
rounds, infrastructure concessioning,
use of recovered funds, among others,
to reduce the funding gap.
“The other option would have been to
source for additional loans, beyond the
level of borrowing already projected for
in the 2016 Budget.
“This would not be a wise option as it
would raise the level of debt service to
an unsustainable level.” a statement by
the Minister’s spokesman, Akpandem
James, read.
Economy In Recession
Nigeria’s economy slid into recession,
triggered by the drop in the price of
crude which was compounded by
resurgence of militancy in the Niger
Delta region.
Gross Domestic Product (GDP) was
contracted by 2.06% in the second
quarter of 2016, a report by the National
Bureau of Statistics showed.
According to the report, the decline has
caused the Naira to get weaker while
lower oil prices dragged the oil sector
down.
The output shrunk by 0.36 in the first
quarter.
During the quarter, nominal GDP was
2.73% higher at 23.48 million Naira at
basic prices.
The nation’s economic situation
became worse, as several oil facilities
got destroyed.
These attacks on oil installations dipped
production output by over 700,000
barrels per day (bpd) to 1.56 million bpd
in the last few months, according to the
nation’s Minister of Information, Mr Lai
Mohammed .
A group that calls itself the Niger Delta
Avengers has claimed responsibility for
most of the attacks that have forced
some oil companies in the region to
declare force majeure.
The group, which few weeks ago said it
had agreed to a ceasefire and was open
to negotiations with the Federal
government, launched another attack on
an oil facility last week.
The Niger Delta Avengers said it was a
warning to the government to cease the
harassment of youths in the oil-rich
nation.