The Federal Government may sell off 5% of its 49% shares in the Nigerian Liquefied Natural Gas (NLNG) in planned efforts to dispose of national assets across the country to raise the much needed foreign currency base, BusinessDay learnt on Monday.
The FG would also insist on a repurchase clause in the sale of any national assets across the country in its proposed move to dispose government’s assets to build its foreign currency to base, a presidency official who pled anonymity disclosed on Monday.
The official said contrary to speculations the government had no intention of out rightly selling off its 49% shares in the Liquefied Natural Gas Company which has a 51% private foreign interests.
“The FG don’t own the entire gas company, and will certainly not sell-off its entire shares, but is open to the possibility of selling down its 49% ownership by 5% or thereabout” the official said adding that the decision was yet to be taken.
He said government intended to insist on the repurchase clause in other potential asset sales to ensure ” a repurchase option that guarantees the federal government an opportunity to buy-back any such assets if circumstances change anytime in the future”.
The federal government earlier announced plans to dispose of some of the country’s national assets to build up the country’s foreign reserves which are a major factor for foreign investors.
Foremost Nigerian Businessman Aliko Dangote had during an interview with a cable TV, the CNBC Africa, proposed the sale the NLNG and other federal assets as a way of augmenting the current revenue shortfall as a result of economic recession.
In the face of dwindling monthly foreign reserves which flows mostly through the country’s oil sales government officials have said the FG would consider the sale of some of its national assets to quickly raise between $10 to $15B to shore up the country’s foreign exchange base. There have also been public outcry against the FG’s proposed asset sale deals which was however celebrated by the private sector.
“With the shrinking foreign reserves of the country, experts agree there is a need to take some drastic steps to shore up the reserves. An injection of about $15B into the reserves has a positive impact on the entire economy as a multiplier effect, according to experts.
“Besides, the government has been losing about 1 million barrels per day of oil production due to vandalisation of oil and gas pipelines and installations” the official said adding that “generally whatever we sell, we shall get real value for, and we shall include a repurchase clause into any such sales agreements.”
However, no list has so far been drawn for the proposed assets to be sold, the official said adding that there is a clear decision not to sell any critical asset of the country and certainly no plan to outrightly sell-off any asset whatsoever.
“some of the intended sales could be in form of time-bound leases, advance renewal payments on leasing licenses 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 official said in an email exchange with our correspondent.
He disclosed that the FG has almost concluded the concessioning deal for the East-West lines of the Nigeria Railways with General Electric-GE as they plan an investment of $2billion into the Nigerian economy.
They also plan to refurbish the single-gauge lane of the lines that have been largely left idle. “GE under the deal 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 here in Nigeria.
“Under the deal, the FG would also receive a signature fees 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 official said.
Business Day
