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More facts are coming up
on the Federal Government’s plans to sell some assets in a bid to push back the
recession that has hit the economy.
The
Nation report continues:
Certain
conditions must be met before the sale, which is expected to boost Nigeria’s
foreign reserves – a critical factor for potential foreign investors.
The
conditions, include:
· inserting
a repurchasing clause in the assets sales agreements; and
· no
outright sale of the yet unnamed assets.
A
Presidency source, who pleaded not to be named, said: “The Federal Government
has no plan to sell off its shares outright in the NLNG, where it owns 49%
shares. The balance 51% is owned by private foreign interests.
“The
Federal Government doesn’t own the entire gas company and will certainly not
sell off its entire shares, but it’s open to the possibility of selling down
its 49% ownership by 5% or thereabout.”
On
the repurchase clause, he said: “Just as in other potential asset sales, there
would be a repurchase option that guarantees the Federal Government’s
opportunity to buy back any such assets if circumstances change anytime in the
future.”
While
there have been no list drawn up for the proposed assets sales, the source said
that there is also a clear decision not to sell any critical asset. He did not
mention such assets.
He
said: “Some of the intended sales could be in form of time-bound leases,
advance renewal payments on leasing licences and concessioning which would
attract buoyant signature fees.
“If
we even want to sell down certain assets, while our target is to get foreign
currency, specifically dollars, the option would also be opened to Nigerians at
some point to buy limited shares through the Nigeria Stock Exchange.”
The
source added that one of the concessioning deals almost completed is the
East-West lines of the Nigeria Railways, with the General Electric-GE-being the
concessionaire.
The
source said the global giant would invest US$2 billion in the economy,
including for the refurbishment of the single-gauge lane of the lines that have
been largely left idle for years.
GE
under the deal, he said, is expected to hire back some of the laid off staff of
Nigeria Railways and also open a Transport University in Nigeria while
building/assembling train coaches in this country.
Under
the deal, the source said the Federal Government would also receive a signature
fee in foreign currency as it would in other assets that might be concessioned.
“The
important thing to keep in mind is that the sales down of some of the assets is
an option to raise the much-needed dollars at a critical time for the Nigerian
economy,” the source noted, adding that if and when such a sale is done,
“Nigerians can be sure that there would be no shady deal, considering the character
of the Nigerian leadership at this time”.
The
proposed plan to sell some national assets has generated excited comments
especially after businessman Aliko Dangote called for the sale of the LNG last
week, fuelling speculations that the Federal Government wanted to sell its
entire share in the firm.
“Generally
whatever we sell, we shall get real value for, and we shall include a
repurchase clause into any such sales agreements,” the source said.
Some
other experts have argued that there is a need to take some drastic steps to
save Nigeria’s shrinking foreign reserves.
It
is believed that an injection of about US$15 billion into the reserves will
have a positive impact on the economy.
The
Federal Government’s plan to raise between US$10 billion to US$15billion quickly
from asset sales “is imperative” as the monthly foreign earnings have dropped
drastically to as low as about US$300 million.
The government also has been losing about one million barrels of oil due to vandalization of pipelines and installations by militants in the Niger Delta region.
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