The Pros and Cons of Proposed Sale of National Assets by Dr. Obadiah Mailafia

In a monitored television magazine programme in Abuja, Dr. Obadiah Mailafia, a former Deputy Governor of the Central Bank of Nigeria (CBN), speaks on the pros and cons of the proposed sale of national assets, reports Ibrahim Apekhade Yusuf

WHY are the refineries not working?

I recall that the Managing Director of Port Harcourt refinery and some of his staff had to abandon the three bedroom flat they gave to him and set up a small cubicle in the factory, staying there day and night with a camp bed working to fix the refineries. They took it as a national challenge. But they said that the problem is that they don’t give them crude. Not only that, last month they had enough PMS that they produced but nobody to buy it. So there is collusion. The cartel that controls the oil and gas sector with high international networks don’t want the refineries to work under any circumstances. So it’s like giving a dog a bad name in order to hang it. As long as it has come to that, then we should sell it off to them and we should give them concrete conditions that they’re not there to cannibalise it but they are there to make the refineries work and if they don’t meet the conditions we nationalise them back just we renationalised Ajaokuta Steel. It can be done.

What is your take on the sale of the NNPC?

The Nigerian National Petroleum Corporation (NNPC) should never be sold. I have always been an advocate of the NNPC being turned into something like Saudi Aramco Mobil Refinery. Let it be a commercially run energy company. It is not just a Saudi-owned company. No. They’ve invested all over the world. They’ve built petrochemical complexes and refineries all over the world. Their assets are worth about $10trillion. Those of Petrolas are worth about almost a $trillion because they did the right thing.

So, my take is let’s restructure NNPC and make it a commercially viable company run with sound commercial principles and we can still keep government ownership 100 percent and still run it successfully. Of course, let’s pass the Petroleum Industry Bill. As I said, we can adopt policy of renationalisation. I think it is what we should at look closely, especially if we set clear mandate to the privatised companies. If after some years they’ve not fulfilled their mandate, government should reserve the right to take back those assets to renationalise them. But we should do it within the framework of the rule of law.

But can the government actually run businesses successfully because like most people would say, government should not be involved in the running of businesses…?

Now, let me ask you, do you think the blood that runs in Nigerians is different from the blood that runs among Ethiopians for instance? I think the blood that runs in us is a blue blood (Laughs). I really don’t believe that. Ethiopian Airline is completely 100 percent government-run. It has been managed very successfully. The most critical element is to remove government interference. For instance, the minister in charge of aviation in Kenya never interferes with the running of the airline. He only performs oversight functions. That’s all. He makes sure that they’re performing their constitutional statutory mandate. One of the biggest steel companies in the world, Posco, until recently, was 100percent owned by the Korea and it was run very successfully. Government in certain core areas if given the opportunity can make good. Mind you, a lot of the companies we had in the 60s were government-owned and they worked very successfully.

But government and the quality of leadership deteriorated, when the public service deteriorated, when corruption became the norm, things went bad. In January 1996, l remember l took the last flight of Nigeria Airways that flew to London. We arrived at Heathrow Airport and the plane was impounded because the Heathrow authorities discovered that the door of the aircraft was not properly locked and it was a miracle how we arrived London safely. I don’t know what happened afterwards but that was the last flight of the Nigeria Airways that flew to London ever since.

Up till that time, the Minister of Aviation was interfering. I’m not saying the current one. In those days, all the ministers of aviation were interfering in one way or the other. For instance, they were getting free tickets for their girlfriends and what have you and they brought in all kinds of cargoes free of charge. In fact, those days if you had a friend at the Nigerian Airways, you could put a truck load of anything to anywhere once you grease their palms. It was that bad. But in Ethiopia, not even the Prime Minister can give an order for his family to be put on Ethiopia Airline. So if and when government does the right thing, things would work.

How about our stakes at the Nigeria LNG Limited? Do you subscribe to it being sold as well as it has been suggested in some quarters?

In fact, we should look for ways to buy more shares. I recall that at the start of this administration sometime last year, the NLNG did pay the sum of $5billion to the federal government as dividends. If you have 49% shares and you’re getting $5billion annually as dividends, honestly if you make it 60%, you’re likely to get may be $8billion annually, which is ok. The issue is to have the discipline as a government not to interfere where things are working out.

Some experts have said let’s sell our assets but we should channel the proceeds into the development of critical infrastructure. Do you subscribe to this?

I think if we make up our minds on the ones that we need to sell. Yes, we can use the funds for critical statutory sectors like infrastructure. That’s the way we need to go. We certainly should not use it for consumption because the greatest foolhardiness anyone can commit is if you’re in trouble and difficulty and you sell off your only assets and use it to go to beer parlour. It doesn’t make sense.

What do you think of Femi Falana, the human rights lawyer on the proposed sale of the national assets? He has opposed Aliko Dangote, Godwin Emefiele, SanusiLamido, and even Senator BukolaSaraki on the planned sale of assets and he indeed said that it is contrary to sub section 16 of the Constitution…

I read what he said. He is a socialist lawyer, a peoples’ lawyer if you may, and I like people who are into that kind of populism. But I don’t think he knows what he is talking about. I’m sorry because section 16 deals with inequality and in saying that privatisation will increase inequality is absolutely wrong because there’s no empirical evidence for that.

According to Falana, past assets sales were marred by corruption and short-changing of the people since government is supposed to hold these assets for the public in trust.

But that’s not necessarily a violation of the constitution. He’s just an activist lawyer.

Are you saying that we can’t get anything good from socialist lawyers and what have you?

Certainly when looking at the economy, you need to get your mathematics and calculations right. You don’t just run economic policies on emotions. Populism, of course, is not an alternative to sound economic policies. When it comes to the economy, it’s a totally different ballgame. But I think as a country we should continue to persevere. I see a very bright ahead for this great country.

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