So i Read an article on the "Sale of National Asset" written by former governor of Central Bank Professor Sulodo and i was more than impressed at his common sense and critical reasoning...
what is the problem with Nigeria?..
In the Yoruba Palace, selling the "Ogun" (Inheritance, Assets) inherited by the Child of a Wealthy Deceased Man is usually referred to as being abominable.. That is even pure culture and nothing to do with Economics.
Any Child that sells Inheritance or assets is usually referred to as "Apa" or Akotileta"..
i was shocked to my bones when this issue of selling of Public assets took center stage and became a front burner having the senate talking in terms that seems to me like tacit endorsement of selling National Assets for a short term fix to a problem that seems long-term called Nigeria..
I mean, to me, Recession isn't the problem but looking for a short cut out of a recession we opened our eyes to willing fall into is where i fault..
it is the height of gross irresponsibility for a government to think of selling National Assets for a quick fix to a recession.
i keep saying it and i maintain my stands, Corruption stems from Irresponsibility and Selling National Assets just goes to prove our collectively irresponsiblility as a people we are to the country Nigeria..
Nigeria is structured such that Not The Hausa's nor Igbo's nor Yoruba's are responsible for the country as a whole, every group is infested with that sinister Ethnic agenda.
i'l think instead of selling National Assets, the burning issues for now to be front burner discuss should be "Re-Structuring" the country as a whole..
Selling National assets is just kicking the can down the road and post-poning evil days.
on this Burning National Issue, i beg to disagree with anybody that seems to toe the part of selling our collective heritage and taking us back to the dark days before Independence. Gradually Nigerians are silently saying to the world " we cant be responsible for ourselves and to ourselves and we need other people to be responsible for us" we need China to come build and maintain our rail systems because the Nigerian engineers are incompetent and the consortium are corrupt and irresponsible, cos after bidding for and being awarded a contract, the next thing is to flee with the money allotted for the contract with nothing shown for work done..
it is sad and pathetic..
Selling National Assets to me is gross irresponsibility and abuse of office and laziness of the whole Executive and Legislature. People just want quick easy money to siphon without doing any work whatsoever.. its really so sad.
i would seek to get a little from the text of Professor sulodo that really nailed the issue on the head.
Professor Soludo, who is the founder of the African Heritage Institution, expressed his opposition to the assets sale yesterday in an article titled: “Nigeria: Sale of Assets as Dangerous Policy Myopia”, stressing that if the president endorsed the proposal, it would be a historic mistake made by the country and i agree with the Professor Hook line and sinker.
“Our thesis is that in extreme, exceptional circumstances, the sale of certain assets could be a last resort option but that Nigeria is currently not near that threshold and the institutional framework for its effective use is also not in place.
“Furthermore, we argue that any sale of assets now amounts to chasing pennies when by acts of omission or commission, we are losing pounds.
“Such a hasty auction of national assets can only benefit a privileged few with cash and access while jeopardising Nigeria’s long-term economic interest. It will be a historic mistake for the reasons stated below.”
Soludo went on to express concern over the proposal to sell some valuable national assets “in order to build reserves and provide funds for immediate spending” and thus ensure that this recession will be the “shortest” ever.
He acknowledged that some people had bandied the same suggestion in the past but he largely dismissed it as a joke.
“But when the Senate and NEC joined the convenient but flawed call for the asset sale, I have a citizen duty to join others in letting our voice be heard.
“Part of the legacy of the oil resource curse on matters of public finance is a mindset that resorts to easy, albeit a lazy approach to ‘quick fixes’ — with a gaze on the short-term even when the issues are structurally long-term.
“So, I understand the mental framework that drives such a proposal, especially given the pressure to show immediate results,” he added.
He noted that the objective of the policy was mistakenly identified in terms of getting the economy out of recession.
According to Soludo, recession is short-term, adding that “with good rains and bumper agricultural harvest, Nigeria’s Gross Domestic Product (GDP) growth can easily recover and the economy would be out of the recession”.
Specifically, he pointed out that a GDP growth rate of even 0.01 per cent next quarter would be enough to take the economy out of the recession.
“With the current policy regime, it will be a miracle if the current government can, after eight years in office by 2023, succeed in returning Nigerian economy just to the size of GDP (in US dollars) it met it in 2015.
“To be fair, the wheels of the economy were already falling off by the time this government took over plus other complications of the oil sector and I sympathise with it.
“But it is also fair to note that some of its policy choices have made matters worse. Now that the government is showing seriousness in tackling the crisis, focusing on short-term next quarter GDP growth misses the key point and has the danger of understating the serious work required,” he argued.
Furthermore, Soludo said there was little basis for the $10-15 billion being bandied around as likely income to be generated from the proposed asset sales.
He stressed that there was no basis for the expectation that shoring up reserves by this amount would magically restore investor confidence and stop speculation on the naira.
“There is more to investor confidence than a temporary boost in stock of reserves when everyone knows that the underlying political environment as well as the policy regime and its credibility make the flow of reserves unsustainable.
“The IMF calculates reserve adequacy in terms of the amount to finance at least three months of imports especially for countries with flexible exchange rates (which we claim to have), and of course also enough to cover short-term forex liabilities for countries with open capital accounts.
“Nigeria currently has much more reserves to cover even six months of imports (size of imports also depends on exchange rate). So, what is the problem?
“No amount of reserves can stop currency speculation in a poor policy environment. There is much more to confidence than absolute or relative size of reserves.
“Look around our West African neighbours that are doing far better in economic terms and check out the size of their reserves (even as a percentage of GDP).
“Until 2004, Nigeria never had more than $10 billion in reserves, and we have survived oil prices below $10 without selling Nigeria. The British pound has been down for months against major currencies since the Brexit vote in June, while China (with trillions of dollars in reserves) experienced major stock market and currency attacks recently and the Yuan had to be devalued.
“Before the 2008/2009 crisis, Russia had robust reserves but it lost tens of billions struggling to defend the local currency and eventually yielded to the market,” he added.
Continuing, Soludo noted that the argument that the sale of assets remained the only way to reflate the economy out of recession was troubling, and “suffers what economists might call policy myopia or time inconsistency problem”.
He added: “First, imagine if previous governments used asset sales as a strategy to ‘reflate the economy’ during previous periods of economic recession or crisis.
“Alternatively, if we auction away some valued national assets for the short-term goal of reflating the economy out of recession, what will happen during future cycles of recessions and economic crises?
“The global economic system is inherently and cyclically crisis-prone. Prudently managed economies are preparing for the next cycles of global crisis, and the IMF has already warned of persisting vulnerabilities. What shall we sell then?
“Besides, a hasty auction of the assets will short change Nigeria. Privatisation of national assets is not an ideological matter for me. It is plain pragmatism. Reasonable people can have a good debate about the composition of public assets for sale at any time.
“Although government is yet to be definitive about the assets being proposed for sale, it is reasonable to object to any scheme that will hurriedly sell performing public assets that guarantee future flows of revenue and forex to future generations such as the NLNG, AFC shares, JVs in oil and gas sector, etc.
“Even for non-performing assets, when privatisation is forced and assets auctioned on an emergency basis to meet short-term needs, the danger signs are there for all to see. Nigeria will never get value for money under the circumstance.
“We all know what happens when someone urgently needs to sell his or her property to meet an emergency. What happens to the valuation/pricing? If we price them properly and wish to go through proper due process, the deal might take several years to conclude thereby defeating the advertised purpose of immediate spending".
The Professor Made a whole lot of sense and where he was coming from made all the sense in the world and was suggesting the Senate Just Needed quick and Fast money like the culture had always been.
i would be very dissappointed with president Buhari should this issue not be swept under the carpet and allowed to blossom and materialize or even see the light of day..
To me it is supposed to be considered a forbidden topic and one not to be tinkered with, it should be a sacrosanct idea never to be toyed with..
Sale of National Assets to me is the same as selling the country, and if that be the case, why not have us split the country into its constituent units and see where we get from there rather than have us sell the whole country..
this is just born out of serious concern for this country as a whole..
I rest my case.
Written By OMA, For Oma's Blog.
what is the problem with Nigeria?..
In the Yoruba Palace, selling the "Ogun" (Inheritance, Assets) inherited by the Child of a Wealthy Deceased Man is usually referred to as being abominable.. That is even pure culture and nothing to do with Economics.
Any Child that sells Inheritance or assets is usually referred to as "Apa" or Akotileta"..
i was shocked to my bones when this issue of selling of Public assets took center stage and became a front burner having the senate talking in terms that seems to me like tacit endorsement of selling National Assets for a short term fix to a problem that seems long-term called Nigeria..
I mean, to me, Recession isn't the problem but looking for a short cut out of a recession we opened our eyes to willing fall into is where i fault..
it is the height of gross irresponsibility for a government to think of selling National Assets for a quick fix to a recession.
i keep saying it and i maintain my stands, Corruption stems from Irresponsibility and Selling National Assets just goes to prove our collectively irresponsiblility as a people we are to the country Nigeria..
Nigeria is structured such that Not The Hausa's nor Igbo's nor Yoruba's are responsible for the country as a whole, every group is infested with that sinister Ethnic agenda.
i'l think instead of selling National Assets, the burning issues for now to be front burner discuss should be "Re-Structuring" the country as a whole..
Selling National assets is just kicking the can down the road and post-poning evil days.
on this Burning National Issue, i beg to disagree with anybody that seems to toe the part of selling our collective heritage and taking us back to the dark days before Independence. Gradually Nigerians are silently saying to the world " we cant be responsible for ourselves and to ourselves and we need other people to be responsible for us" we need China to come build and maintain our rail systems because the Nigerian engineers are incompetent and the consortium are corrupt and irresponsible, cos after bidding for and being awarded a contract, the next thing is to flee with the money allotted for the contract with nothing shown for work done..
it is sad and pathetic..
Selling National Assets to me is gross irresponsibility and abuse of office and laziness of the whole Executive and Legislature. People just want quick easy money to siphon without doing any work whatsoever.. its really so sad.
i would seek to get a little from the text of Professor sulodo that really nailed the issue on the head.
Professor Soludo, who is the founder of the African Heritage Institution, expressed his opposition to the assets sale yesterday in an article titled: “Nigeria: Sale of Assets as Dangerous Policy Myopia”, stressing that if the president endorsed the proposal, it would be a historic mistake made by the country and i agree with the Professor Hook line and sinker.
“Our thesis is that in extreme, exceptional circumstances, the sale of certain assets could be a last resort option but that Nigeria is currently not near that threshold and the institutional framework for its effective use is also not in place.
“Furthermore, we argue that any sale of assets now amounts to chasing pennies when by acts of omission or commission, we are losing pounds.
“Such a hasty auction of national assets can only benefit a privileged few with cash and access while jeopardising Nigeria’s long-term economic interest. It will be a historic mistake for the reasons stated below.”
Soludo went on to express concern over the proposal to sell some valuable national assets “in order to build reserves and provide funds for immediate spending” and thus ensure that this recession will be the “shortest” ever.
He acknowledged that some people had bandied the same suggestion in the past but he largely dismissed it as a joke.
“But when the Senate and NEC joined the convenient but flawed call for the asset sale, I have a citizen duty to join others in letting our voice be heard.
“Part of the legacy of the oil resource curse on matters of public finance is a mindset that resorts to easy, albeit a lazy approach to ‘quick fixes’ — with a gaze on the short-term even when the issues are structurally long-term.
“So, I understand the mental framework that drives such a proposal, especially given the pressure to show immediate results,” he added.
He noted that the objective of the policy was mistakenly identified in terms of getting the economy out of recession.
According to Soludo, recession is short-term, adding that “with good rains and bumper agricultural harvest, Nigeria’s Gross Domestic Product (GDP) growth can easily recover and the economy would be out of the recession”.
Specifically, he pointed out that a GDP growth rate of even 0.01 per cent next quarter would be enough to take the economy out of the recession.
“With the current policy regime, it will be a miracle if the current government can, after eight years in office by 2023, succeed in returning Nigerian economy just to the size of GDP (in US dollars) it met it in 2015.
“To be fair, the wheels of the economy were already falling off by the time this government took over plus other complications of the oil sector and I sympathise with it.
“But it is also fair to note that some of its policy choices have made matters worse. Now that the government is showing seriousness in tackling the crisis, focusing on short-term next quarter GDP growth misses the key point and has the danger of understating the serious work required,” he argued.
Furthermore, Soludo said there was little basis for the $10-15 billion being bandied around as likely income to be generated from the proposed asset sales.
He stressed that there was no basis for the expectation that shoring up reserves by this amount would magically restore investor confidence and stop speculation on the naira.
“There is more to investor confidence than a temporary boost in stock of reserves when everyone knows that the underlying political environment as well as the policy regime and its credibility make the flow of reserves unsustainable.
“The IMF calculates reserve adequacy in terms of the amount to finance at least three months of imports especially for countries with flexible exchange rates (which we claim to have), and of course also enough to cover short-term forex liabilities for countries with open capital accounts.
“Nigeria currently has much more reserves to cover even six months of imports (size of imports also depends on exchange rate). So, what is the problem?
“No amount of reserves can stop currency speculation in a poor policy environment. There is much more to confidence than absolute or relative size of reserves.
“Look around our West African neighbours that are doing far better in economic terms and check out the size of their reserves (even as a percentage of GDP).
“Until 2004, Nigeria never had more than $10 billion in reserves, and we have survived oil prices below $10 without selling Nigeria. The British pound has been down for months against major currencies since the Brexit vote in June, while China (with trillions of dollars in reserves) experienced major stock market and currency attacks recently and the Yuan had to be devalued.
“Before the 2008/2009 crisis, Russia had robust reserves but it lost tens of billions struggling to defend the local currency and eventually yielded to the market,” he added.
Continuing, Soludo noted that the argument that the sale of assets remained the only way to reflate the economy out of recession was troubling, and “suffers what economists might call policy myopia or time inconsistency problem”.
He added: “First, imagine if previous governments used asset sales as a strategy to ‘reflate the economy’ during previous periods of economic recession or crisis.
“Alternatively, if we auction away some valued national assets for the short-term goal of reflating the economy out of recession, what will happen during future cycles of recessions and economic crises?
“The global economic system is inherently and cyclically crisis-prone. Prudently managed economies are preparing for the next cycles of global crisis, and the IMF has already warned of persisting vulnerabilities. What shall we sell then?
“Besides, a hasty auction of the assets will short change Nigeria. Privatisation of national assets is not an ideological matter for me. It is plain pragmatism. Reasonable people can have a good debate about the composition of public assets for sale at any time.
“Although government is yet to be definitive about the assets being proposed for sale, it is reasonable to object to any scheme that will hurriedly sell performing public assets that guarantee future flows of revenue and forex to future generations such as the NLNG, AFC shares, JVs in oil and gas sector, etc.
“Even for non-performing assets, when privatisation is forced and assets auctioned on an emergency basis to meet short-term needs, the danger signs are there for all to see. Nigeria will never get value for money under the circumstance.
“We all know what happens when someone urgently needs to sell his or her property to meet an emergency. What happens to the valuation/pricing? If we price them properly and wish to go through proper due process, the deal might take several years to conclude thereby defeating the advertised purpose of immediate spending".
The Professor Made a whole lot of sense and where he was coming from made all the sense in the world and was suggesting the Senate Just Needed quick and Fast money like the culture had always been.
i would be very dissappointed with president Buhari should this issue not be swept under the carpet and allowed to blossom and materialize or even see the light of day..
To me it is supposed to be considered a forbidden topic and one not to be tinkered with, it should be a sacrosanct idea never to be toyed with..
Sale of National Assets to me is the same as selling the country, and if that be the case, why not have us split the country into its constituent units and see where we get from there rather than have us sell the whole country..
this is just born out of serious concern for this country as a whole..
I rest my case.
Written By OMA, For Oma's Blog.
All rights Reserved.
Copyrights 2016
