Nigeria must privatise more assets – Economist

Ayo Teriba, Vice Chairman, Technical Committee of the National Council on Privatisation
Ayo Teriba, Vice Chairman, Technical Committee of the National Council on Privatisation

Nigeria must urgently consider privatising her redundant assets to raise the required funds to grow the economy and ensure stability, Vice Chairman, Technical Committee of the National Council on Privatisation, Ayo Teriba, said.

Mr Teriba, a professor of Economics, who is also the Chief Executive Officer of Economic Associates, said in Abuja on Monday that the privatisation of some public assets would help boost liquidity to run the economy.

“Unless we fix the liquidity problem, the country will get neither growth nor stability,” Mr Teriba said.

“The economic recession of 2016 was inflicted on the country by illiquidity. There wasn’t enough foreign exchange. We did not have enough foreign exchange. That was why we had to devalue the Naira. To get growth and stability in the economy, we must get liquidity.”

He was speaking on the topic: “Unlocking the Nigeria Economy for private Sector Investment,” at the Enterprise Stakeholders/Investors’ Forum organised by the Bureau of Public Enterprises (BPE).

The economist, who stressed the need to stabilise the external liquidity of the economy, said there can be no growth in the economy in the absence of liquidity.

Although the federal government has been trying to mobilise some external liquidity through the issuance of Eurobonds from the international money market since last year, he said the country needs billions of external funding to ensure stability of the economy.

He said prior to 2014, the country’s export earning was about $100 billion a year. However, since then he said the country has been struggling with a shortfall of $50 billion.

”Borrowing $3 billion in Euro Bonds will not bridge the $50 billion shortfall. Nigeria should look for the mega bucks, by doing the privatisation to raise the funds needed to solve the problem that confront us.

“We should build huge reserves, to avoid recession, instability, devaluation of the Naira and inflation, to help cushion the domestic economy from shocks from commodity pricing in the international l oil market,” he said.

The Director General of BPE, Alex Okoh, said the forum covered some selected enterprises bricks and mining sectors; steel and automobile as well as industry, services and agriculture.

He said since the privatisation programme started in the 1980’s, the Bureau successfully privatised 142 enterprises by December 2017.

Out of the number, about 94 enterprises have been successfully monitored, covering critical sectors of the Nigerian economy from the Transport Sector to Vehicle Assembly Plants, Oil Palm, Cement, Hospitality, Fertiliser, Bricks and Clay, Mines and Steel, National Facilities, Oil and Gas, Ports, Power and Communication.

From the privatised enterprises, 63 per cent were performing, while 37 per cent were not performing as expected.

The BPE boss identified the power sector as one aspect of the privatisation programme that has not fully achieved its objectives.

“Well, the privatisation of the power sector has not fully achieved its objectives. I’ll be the first to admit that. And there are several reasons. There are industry issues, some of which are relate to the price of power (the tariff).

“Others have to do with the efficiencies of the current operators of the DISCOs, in terms of how they enumerate the customers based on their franchise areas; how they are able to meter the customers for people to pay for their use, rather than estimated billing,” he noted.

Besides, there are also infrastructural issues around transformers such as the distribution infrastructures needing to be upgraded and expanded.

He said it would be difficult to determine the appropriate pricing of the tariff until the various aspects of the industry come together to contribute to the efficiency of the power sector, especially, at the distribution end of the value chain.


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