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The Perils Of Selling The Family Silver

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The presidential candidate of the Peoples Democratic Party, Atiku Abubakar, said in a policy document to launch his campaign, that in pursuing his economic liberalization (read unfettered capitalism) policy, state-owned enterprises would be privatised “including all four government-owned refineries.”

That intention as contained in the Policy Document was defined more clearly by the man who wants to be the president of Nigeria. He stated what he intends to do with the Oil and Gas Industry in Nigeria in an interview with, The African Report, that he will sell off 90 per cent government shareholding in the NNPC and retain only 10 per cent for the Federal Government.

The first error is the assumption that the NNPC belongs to the Federal Government alone.  In truth, it constitutionally belongs to the three tiers of government in the federation.  There will be litigation, should the company be sold unilaterally.

When the implication of what he told his interviewers shocked them, they asked him to state plainly whether he would indeed sell the NNPC and retain only 10 per cent for the government. He responded thus: “Yes, I would want to go ahead. There is no doubt about that the government should have a very minor shareholding.”

The obsessive idea of selling the NNPC and its refineries, like all other viable government-owned enterprises, has always been in the heart of the PDP intentions. Two lucrative NNPC refineries were actually sold off for US$750 million in 2007 under the watch of the Obasanjo-Atiku faction of the PDP.

The Umaru Musa Yar’Adua administration reversed the sell-off because it was a bad and unpatriotic action by the Obasanjo-Atiku group.  The sum of $750 million dollars was refunded to Aliko Dangote and partners.  Today, a wiser Dangote is building a plant to refine 650, 000 barrels of crude oil daily worth over US$12.2 billion without any controversy that could dent the reputation he earned as an honest entrepreneur making clean money.

Former President Obasanjo said in an interview on a television station on July 29, 2015, that he confronted the late President Yar’Adua on why he cancelled the selling of the two NNPC refineries.  He quoted the late President as saying that he was put under intense pressure to reverse the sell-off.

Nigerians are sceptical, if not in outright opposition, to the idea of selling the NNPC and its subsidiaries as proposed and promised by Alhaji Atiku Abubakar, should he succeed in his bid for the presidency next year.

The Lagos-based Atiku-Agbaje Media Engagement Network, which supports Atiku Abubakar’s presidential ambition, strongly opposed his proposal based on the opinion of its members. The group said Nigeria “being a mono-economy with a robust reliance on oil as the major revenue source, selling off NNPC will amount to killing the golden goose that lays the golden eggs for our country.”

The depiction of the NNPC as the layer of the country’s golden eggs became obvious in the recent failure of the Federation Account Allocation Committee (FAAC) to make a decision on the distribution of revenue to the three tiers of government on account of low distributable revenue from the NNPC. The NNPC generates the bulk of Nigeria’s foreign exchange and the single largest chunk of government revenue.

Senator Shehu Sani of the Peoples Redemption Party(PRP), who represents Kaduna Central in the Senate, was contextually correct in describing the Atiku desire to sell NNPC as “a condemnable proposal and a dangerous intention. Auctioning the country has not helped in the past and will not help in the future.”

Dr Bismark Rewane, a prominent financial analyst, wondered to whom and how the presidential candidate wants to sell the NNPC. He prayed that it would not be sold to cronies to avoid the kind of crude capitalism that emerged in Russia after selling government-owned businesses.

Rewane’s concerns on the potential dangers regarding to whom and how the selling will be done can be seen with hindsight in the sell-off of NITEL, Nigeria Airways Limited and a host of other public enterprises. Those sell-offs were done under Atiku’s watch as Vice President. They are sore points on the neck of Nigerians, particularly after discovering that the NITEL Training School in Kano is now a Digital Bridge Institute.  Who owns the Digital Bridge Institute?

While those who cornered those deliberately under-valued enterprises in opaque transactions became wealthy overnight, the former workers of the entities were abandoned in penury.

Will Nigerians passively accept short-changing the country again? Many Nigerians perceive that as Chairman of the Privatization Council, the former Vice President probably made immense gain by favouring his associates in the foggy privatization process at the expense of the nation. He now wants to have a second field-day.

Many observers fault his proposal to sell the NNPC and four refineries for these reasons: NNPC has a crude production arm which makes profit; NNPC  has a successful investment in the growing gas sector and is constructing a pipeline to distribute gas nationwide; it has a capable and profitable engineering subsidiary; it has  retail outlets in the downstream segment of its activities and its joint venture businesses are contributing to the economic viability of Nigeria and the wellbeing of Nigerians.

There is a popular belief that selling off our family silver, the NNPC, has many perils, including ending the on-going search for oil in the inland basins to increase the country’s proven crude reserve.  The Lake Chad basin is in the Northeast, which needs massive rehabilitation. Discovering oil there will accelerate that rehabilitation. Selling off the NNPC will terminate that hope, and hurt the north east, where incidentally, Atiku is from.

– Dambatta, a journalist and former member of the executive committee of the Nigerian Guild of Editors, is based in Abuja.





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