By Fred Itua, Abuja
The ongoing debate on the nation’s economic recession and sale of national assets has finally birthed at the Red Chamber of the National Assembly. Senators who spent more than two months, savouring their annual recess, assembled last week to proffer solutions to the country’s economic woes. Divergent views were expressed and honest solutions were proffered. But in the end, one thing was clear: No Senator wants the country’s assets sold, except the Senate President, Bukola Saraki, who offered an honest piece of advice.
Lawmakers had earlier agreed to hold the special session on Tuesday, September 20, to discuss how the country can get out of the woods. But the day’s business was overtaken by events. Lawmakers had to adjourn to honour a member of the House of Representatives, who passed on while members were on recess. Saraki, however, set the tone as to what to expect when he gave marching orders to President Muhammadu Buhari to put the country back on the path of growth.
In his prepared speech, Saraki urged President Buhari to immediately put in place a platform that would engage the private sector. He added that the platform must be pro-business and show that government is ready to partner with the private sector towards economic revival.
Said he: “The Executive must immediately put in place leadership-level engagement platform with the private sector. This must be one that is pro-business and shows unequivocally that government is ready to partner with the private sector towards economic revival. This is a critical signpost towards market confidence, which is a key ingredient to help us revamp the economy out of recession.”
Saraki, who was specific on what the government should sell off, noted: “The Executive must raise capital from asset sales and other sources to shore up foreign reserves. This will calm investors, discourage currency speculation and stabilise the economy. The measures should include part sale of NLNG Holdings; reduction of government share in upstream oil joint venture operations; sale of government stake in financial institutions, e.g., Africa Finance Corporation, and the privatisation and concession of major/regional airports and refineries.
“The Executive must consider tweaking the pension funds policy within international best practice safeguards to accommodate investment in infrastructure and mortgages,” he added.
Saraki also spoke on the need to review the current monetary policy of the Central Bank of Nigeria (CBN). “The Executive and CBN must agree on a policy of monetary easing to stimulate the economy and harmonise monetary and fiscal policy until economic recovery is attained. We must ensure local government borrowing does not crowd out credit for the private sector, ” he said.
When Senators reconvened the following day, they all spoke against the planned sale of national assets. Instead, they called for a constitutional amendment to stop the complete sharing of revenues accruable to the Federation Account.
Deputy President of the Senate, Ike Ekweremmadu, released the first shot when he cautioned that the sale of assets was not the way out of the recession, maintaining that no country resorts to selling its national assets while in crisis.
“UAE does not even allow you close to the oil wells, let alone selling them. A country like Saudi Arabia, their budget each year is run by investments from their oil revenue. Other countries are investing and with all the investments we have, I am sure we will not be fair to the next generation if we sell off our assets. If we must sell, we have to sell the non-performing assets so that people can turn them around and create employment,” he maintained.
In his long remarks, Ekweremmadu detailed what went wrong and how the country can be pulled out of recession. Part of his remarks stated: “We need to amend section 162, especially from 3,4,5,6 where each money in the Federation Account is enjoined to be shared among the other levels of government. I think the important thing is for our people to understand what we have found ourselves and what recession is all about. For me, in my simple language, we found ourselves in recession, which means there is poverty in the land that the cost of rice, beans and everything has gone up and there is no money to buy them.
“I will like to look at both the short term strategy and, of course, the medium to long term. In the first place, we passed a budget for 2016 and we envisaged the situation we found ourselves and we believe that the best thing to do is to increase the budget for 2016 so as to enable reflate the economy, but we are almost at the final quarter and yet no releases are being made.
“I think the best thing to do at this point, is for the government to consciously release as much money as possible into the economy. Yes, we are saying that no money, the oil price has dropped but we were also told that through the TSA, we have about N3 trillion somewhere. We were also told that the former minister of petroleum returned $20 million. We were also told that politicians have returned several billions of naira, dollars and pounds.
“It is either that this is not true or that the money is somewhere and if it is not true someone needs to apologise to us and state the correct thing and if it is true, this money has to be released to contractors so that contractors can go to work and those in the construction industries will be paid and then they will pay the school fees of their children and money will circulate. If we have money in the economy, I am sure that shortly, we will also find some relief.
“Secondly, the president needs to look at his cabinet. He has to put square pegs in square holes. Udo Udoma is my friend. He is an accomplished lawyer for that matter, but in fairness to him, I believe he can do better in another ministry, especially like trade and investment, certainly not Budget and Planning.
“The Minister of Finance can do much better in another ministry. At this critical, time we need somebody who is more experienced to man the Ministry of Finance so that he can coordinate the strategies for this recovery.
Senator George Akume in his contribution, supported Ekweremmadu’s position and stressed on the need to refrain from the call for the sale of the nation’s assets, but said the focus should be on recovering stolen funds.
He said a lot of money had been reported to have been stolen from the nation, recalling that former Central Bank of Nigeria (CBN) Governor, Charles Soludo, had pointed to a stolen $60 billion. Akume added that another former Governor of the CBN, Sanusi Lamido Sanusi, also pointed to another $20 billion that was stolen and could be recovered.
Although Senator Shehu Sani was silent on the sale of national assets on the floor of the Senate during the debate, he, however, took a strong stand against it in a statement he personally signed. Sani described proponents of sale of the country’s national assets as “economic predators and profiteers, who want to take advantage of the situation in the country.” He alleged that Nigeria’s capitalist forces raped Nigeria to recession and now they want to kill and bury it. He said privatisation in Nigeria had not delivered the much anticipated efficiency and services other than enrich a few fronts and their masters.
At the end of Tuesday’s plenary, 20 recommendations were adopted by Senators. Parts of the recommendations read: “The Executive as a matter of urgency, prepare an Economic Stimulus Bill containing all the fiscal stimulus packages, investments and incentives designed to pull the country out of recession, to the National Assembly for accelerated consideration and passage.
The Senate also recommended that the nation’s contract with its oil handlers, the Joint Venture Companies/Partners (JVCs) be reviewed in terms of cost of production and profit sharing.
However, a prayer seeking the review of the Treasury Single Account (TSA) policy of the Federal Government was opposed. The Red Chamber also agreed to amend Section 162 of the Constitution to make it mandatory for the Federal Government to save money from the Federation Account before sharing among the three tiers of government. Others adopted are urgent raising of capital to shore up the nation’s foreign reserves in order to discourage currency speculation and stabilize the economy; Federal Government should explore every avenue to restore oil production target of 2.2 million barrels per day; and release of low interest funding under the stimulus package should be calibrated, targeted and monitored in favour of specific industries and projects that add immediate value to the economy by way of job creation, cost reduction and import substitution. The Senate also urged the Federal Government to engage aggrieved Niger Delta militants to avoid escalation of the unrest in the region and ensure protection of our nation’s oil and gas assets to facilitate increase in oil production and boost revenue therefrom.
The Federal Government was also advised to negotiate foreign borrowing instruments to provide funds to cover revenue shortfalls to ensure the full implementation of the 2016 budget and government accelerated infrastructural development programme. It was also recommended that there should be a review and payment of all genuine domestic debts owed to local contractors who had satisfactorily completed the jobs ordered by the government.
All outstanding salaries and pension liabilities were asked to be settled. Lawmakers urged that the use of pension and insurance funds should be used to provide long-term capital for lending to targeted agriculture, industry and housing projects. The constitution of the board of the Central Bank of Nigeria (CBN) and all other critical agencies was one of the recommendations of the Senate. It said this will ensure that the agencies operate in accordance with the enabling laws.
The Senate advised the Federal Government to use Executive action or legislation to encourage telecommunication companies to float their shares in the Nigerian Stocks Market, while it urged that the Fiscal Responsibility Act be leveraged to encourage states and local governments to be prudent and accountable in their revenues and expenditure arrangements.
Oil sector, reconstruction of North-East, establishment of council of Economic Advisers, elimination of business bottlenecks, retooling of export promotion policy scheme and provision of legislative framework were also included in the report adopted by the Senate.