In 2009, President Barack Obama of the United States of America was handed over a country deep in recession. Inaugurated on January 20, 2009 as the 44th President of the US, within eight days Obama sent a Bill to Congress; one that was instrumental in his administration navigating the US out of recession and back into economic prosperity under a space of two years.
Bulk of Obama’s work was done in his first one hundred days in office, a practice that started during the administration of President Franklin D. Roosevelt. In 100 days, from January 20 till April 29, Obama sent three Bills to Congress, one of which was the American Recovery and Reinvestment Act of 2009. It took the US Congress eight days to pass this Bill into law on January 28.
Described as “the boldest countercyclical fiscal stimulus in American history”, the American Recovery and Reinvestment Act included “$787 billion of tax cuts and spending, with the total split roughly one-third tax cuts, one-third government investments, and one-third aid to the people most directly harmed by the recession and to troubled state and local governments.”
Like US like Nigeria
Nigeria borrows a lot from the United States, both in the system of government and in many instances when Nigerians want to vent their frustration with the slow pace of development that has become a culture over the years, they look to the US for comparison on how Nigeria can be if things worked right.
Like the US, governments at both the federal and state level in Nigeria have adopted the ‘100 Days’ in office benchmark for assessing their performance.
This has been the practice since 1999, beginning with former President Olusegun Obasanjo, followed by late President Umaru Yar’Adua; and then his vice and later President, Goodluck Jonathan observed it as well.
However, incumbent President Muhammadu Buhari deviated from what had become the norm. His spokesperson, Garba Shehu, in an article said, “Buhari’s government can’t be judged in 100 days.”
In the US, the 100 Days practice is more about foundation laying and not necessarily a medium to appraise quick concrete achievements. It is believed that 100 days are enough time for the electorates to understand the direction headed by a new administration.
It was on this ground that when Nigerians started criticizing President Buhari early in his administration for being slow that Bola Tinubu, national leader of Buhari’s ruling All Progressives Congress, APC, pleaded with Nigerians to allow the president observe what he termed his 100 Days “honeymoon period.” According to Tinubu, “It is an international norm all over the world, there is a honeymoon period – at least minimum of 100 days honeymoon.”
However, it seems that the significance of this practice was lost on President Buhari. Author, Chimamanda Adichie, in an Op-Ed in the New York Times website of October 18, wrote that the president “had an opportunity to make real reforms early on, to boldly reshape Nigeria’s path. He wasted it.” According to her, though the plunge in global oil price was bound to be “catastrophic” on Nigeria, “Mr. Buhari’s actions made it even more so.”
The policy of defending the naira – keeping the official exchange rate “artificially low”, while allowing the black market balloon – were some of the Nigerian government actions, coupled with the culture of waste and corruption that had become official practice over the years that led Nigeria into recession.
The sales agents
Now desperate to find a solution out of a self-inflicted recession, the Nigerian government has toyed with options on how to raise the country’s reserve, with suggestions being made that perhaps government have no business being in business, and so should sell her stakes in some joint ventures.
Hint that the federal government was considering the option of selling national assets was first given during a session to present the country’s 2017 budget details by Nigeria’s Minister of Budget and National Planning, Udoma Udoma. Also, during a meeting with newspaper finance correspondents in the capital, Abuja, the country’s finance minister ferried the idea.
But, it was at the end of an inter-ministerial retreat in Abuja that it became obvious that the Nigerian government was seriously considering selling some of the country’s assets. Mr. Udoma said that sale was one of the resolutions at the retreat for government to raise funds for a $15 billion (N4.72 trillion) fiscal stimulus plan to reflate and pull the economy from recession.
Even if it had become public debate, it was not exactly clear what assets the Nigerian government intended to sell until Africa’s richest man, Aliko Dangote, in an interview suggested that the country relinquish her investments in the Nigeria LNG to enable the country ride through the recession.
“I think the real challenge for us now is to have the political will in terms of selling some assets… It’s an easier route than the IMF or the World Bank to borrow money… We have a lot of assets to sell… My own suggestion before was that they should even sell 100 percent of NLNG. I don’t think government should be in any business of investing in sectors of LNG. A company like that, with earnings of $1.5 billion on the average, they should get anywhere between $12 billion and $15 billion,” Dangote told CNBC Africa’s Wole Famurewa.
Some critics said Dangote was flying a kite on behalf of the government; an assumption that gained traction when persons considered friends of the incumbent government, from the Nigeria Senate President, Bukola Saraki, to the current Chairman of the Central Bank of Nigeria, Godwin Emefiele; his predecessor, Sanusi Lamido Sanusi, and a former President Olusegun Obasanjo, all supported the idea.
Those opposed to Dangote’s suggestion believe that it would be detrimental to the country’s wellbeing for the Nigerian government to sell an asset like the NLNG, considered profitable. Acting Chairman of the country’s Revenue Mobilization and Fiscal Commission, Shettima Gana said it was not right to sell a company that earns Nigeria over $12 billion annually.
Attempting to strike a balance in the argument, Nigeria’s Deputy Senate President, Ike Ekweremadu, cautioned against the idea. “If we must sell, we have to sell the non-performing asset, so that people can turn them around and create employment,” suggested Ekweremadu.
Former Vice-president of the World Bank, Africa Division, Mrs. Obiageli Ezekwesili proposed that Nigeria strive for economic reform and better management of the national assets as a way to move out of recession, saying that Nigerians must resist the tempting “quick fixes” to sell off national assets. “There are no easy options here,” according to Mrs Ezekwesili.
Describing the idea to sell national assets to get out of recession as “desperate last ditch economic move of drunk, delusional, and irresponsible sailors trying to save a sinking ship in murky waters by dumping cargo to correct for their steering error”, Olusegun Phillips-Alonge said the rationale behind the idea was to “keep the ship buoyant hoping to lighten the ship and survive till the choppy winds subside. What happens when the choppy winds don’t go away on time as expected is best left to imagination.”
Defining the idea as amounting to “asset evaporation”, Phillips-Alonge explained further that, “The assets will be gone and the recession will outlive the effects.” According to him, indigenous privatization would have been better than outright sale. Making reference to past privatization exercises he said, “Obasanjo flubbed privatization in many ways, what he did was more of a deceitful conversion of public corporations to individual ownership.”
Underscoring the benefit of privatization to sales, he said, “The only problem with privatization is that it does not give the kind of huge initial cash like outright sale, but the payoff is better in the long run.”
The IMF projected that the recession will outlast 2016, but that sometime in 2017, Nigeria’s economy will bounce back and grow by 0.6 percent same year. To achieve this, the European Union’s Head of Trade and Economics Section, Fillippo Amato, advised Nigeria to “fully” devalue her currency.
Amato said that “Devaluing the naira is a measure, which will finally reassure investors and attract new capitals to the country. At the same time, it will further reduce imports thereby removing artificial forex restrictions and removing any potential waste of scarce resources such as the fuel subsidy.”
Writing in the PUNCH newspaper, Sonala Olumhense said that Nigeria should take advantage of a variety of Infrastructure funds such as the Emerging Africa Infrastructure Fund, the AfDB’s Africa50 Initiative, President Barack Obama’s Power Africa Initiative, and the Electricity Africa Act of 2014. “In addition, a country with Nigeria’s vast population abroad could easily and quickly raise vast infrastructure funds through Diaspora bonds, an economic tool that has been used to great effect by such countries as Israel and India.”
Posing a critical question, THISDAY Journalist, Mr. Obinna Chima, told this magazine that, while he supports any move to sell off moribund assets, he was however not in support of the sale of assets he described as productive. “Economic recession is cyclical. So if we sell off our national assets today, whenever another recession comes, what assets are we going to sell?” This is a critical question for the Nigerian government to answer before putting the country up to the highest bidder. MA