As debate rages on sales of critical national assets as proposed in the Economic Recovery and Growth Plan (ERGP), the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), has observed the impending losses such action poses on the revenue derivations of the country.
RMAFC cautioned that the sale of Nigeria Liquefied Natural Gas (NLNG) and Federation’s Joint Venture oil and gas assets will hurt Nigeria’s economic drive on the long run, maintaining its earlier stance against such move.
In a statement by Mr. Ibrahim Mohammed, RMAFC’s Spokesperson, the Commission advised against the sale of NLNG on the basis of the fact that it has been managed efficiently, profitably and paying dividend to its Shareholders, including the Federation.
It noted that Nigeria earned about N412.6 billion and $400 million as dividends in July and December 2015 respectively, pointing out that the country would continue to benefit from the annual dividend as well as from the capital appreciation in value of this asset over time.
“The persons supporting its sale and those clamoring to buy are aware of the benefits they would make from such transactions,” the commission noted.
However, considering the country’s dire financial constraints, RMAFC, advised the government to incur loan equivalent to the value of the national assets, which it noted would be repaid from dividends that would have been lost if sold.
“After the repayment, the country will benefit from the investment of the loans that were borrowed while the dividends from the assets will thereafter return and be paid into the Federation Account; Converting the existing Joint Ventures to Incorporated Joint Venture Companies (IJVs) as is the case with NLNG without diluting the Federation’s equity holdings in the IJV; Providing incentives to encourage Local and Foreign investors interested in these assets to consider investing in the construction of new Gas to Liquids, Petrochemicals, Fertilizer and Liquefied Natural Gas Plants and awarding new Marginal fields and Oil Blocks to Prospective Investors as the Nigerian Federation stands to derive maximum returns from its investment in the oil and gas assets,” It explained.
“In the long run, these industries will create huge business activities within the oil and gas value chain and in so doing, create the much-needed employment opportunities and business linkages for Nigerian businesses. The expanded economic activities will no doubt improve Government revenues.”