COVID-19 Crisis: Sell 51% of Varsities, Refineries, Railway, Others, Teriba Tells FG

Economic Associate’s (EA) CEO, Ayo Teriba, has urged the federal government to sell up to 51% of all state- owned enterprises (SOEs) as one of the ways of unlocking liquidity to kick-start the economy.

Nigeria  is facing a liquidity problem due to the fall in crude oil prices induced by the coronavirus pandemic.

As a result, the country is faced with historic contraction in GDP growth, adding to large external and fiscal financing needs and pressure to devalue the naira.

Teriba, however,suggested in EA’s Outlook on Nigeria’s economy after Covid-19 which was obtained by THE WHISTLER, that the government  should not have more than 49% stake in state-owned enterprises.

According to him, the country should privatize all state- owned enterprises to attract large-scale foreign direct investment.

“Wholly owned or majority equity holdings in SOEs- Partially Privatize until Government holds no more than 49 percent stake in any entity, such as the Nigerian Pipeline and Storage Company (NPSC) with 5000km Network of Pipelines; Nigerian Railway Corporation (NRC) and its Rail network, Termini and, Lands and Buildings; TCN and its Power transmission network; National Universities and their lands and buildings; National Hospitals and their lands and buildings and DICON,” he said. 

Teriba  also said that the government should either commercialise or decumulate non- financial assets including valuable lands and buildings  which were under- utilised or idle.

Teriba said, ” Commercialize or decumulate assets such as, valuable but under- exploited or idle, lands and buildings owned by Government Ministries, Departments and Agencies (MDAs) on prime commercial land across the country, especially educational, health and sports institutions, such as 2000-plus Nigerian Postal Services (NIPOST) lands and buildings; 2000-plus Police lands and buildings; Lands and Buildings owned by the defunct Nigerian Telecommunications National Carrier (NITEL) and the defunct Power Holding Company of Nigeria (PHCN); 235 aging and uneconomic inner city prisons; many aging and uneconomic inner city barracks; and numerous aging and uneconomic inner city stadiums.”

He added that for the country to unlock liquidity to reduce the impact of the pandemic on the country,  stakes held by the government in Joint Venture holdings and other companies had to be securitized, especially, “equity stakes in LNG and other oil sector joint ventures.”

 He said the government could   issue “large-scale foreign currency  denominated bonds” which Nigerians both at  home and in the diaspora could invest in to get  the needed external earnings that would save the country from recession and as well save the naira from further devaluation.

The EA outlook said that Nigeria remained asset rich domestically especially if  Foreign Direct Investment (FDI) and Diaspora Remittances were attracted, adding that they were  more viable sources of financing the economy as against loan and volatile Foreign Portfolio Investment (FPI).

Washington based lender, the International Monetary Fund (IMF),  last week approved $3.4 billion for the country in a term which its repayment would commence in  2023 up till 2025.

Teriba had in a telephone conversation with THE WHISTLER  said that the meagre loans from multinational agencies might  not solve Nigeria’s foreign exchange problems.