Dr Ayo Teriba, an economist and Chief Executive Officer (CEO), Economic Associates, has called for the privatization of the Transmission Company of Nigeria (TCN) and other Federal Government assets.
Head, Public Communications, Bureau of Public Enterprises (BPE), Amina Othman, said this on Tuesday in Abuja.
According to Othman, Teriba said this while presenting a paper titled: ‘Macro-economic role of privatization on the Nigerian economy’ at a one-day orientation programme.
The event was organized in Abuja for members of the Stakeholders Engagement Committee (SEC) of the National Council on Privatization (NCP).
He said privatization was the answer to the country’s economic development because its budget and expenditure were shrinking.
“You don’t get saved by cyclical swings but by buffers,” warned Teriba.
Teriba said Nigeria should put in place buffers by privatizing its assets to stimulate direct in-flow of foreign investment.
He, however, said a macro-economic approach to privatization was ideal.
“Privatization is the tool which most countries use to check their liquidity issue and beef up the economy and Nigeria can also do the same by privatizing some of her key assets,” Teriba explained.
He also said that illiquidity was the country’s main challenge: “To solve Nigeria’s liquidity problem, she needs foreign exchange inflow. Nigeria’s annual export revenue has been halved.
“Nigeria’s problem is that other problems are symptoms of the (liquidity) problem and recession is reflecting liquidity shortage.”
He pointed out that privatization was now the trend the world over; citing Saudi Arabia and India which plan to privatize some of their critical assets to raise funds to develop their countries.
“Saudi Arabia is exploiting this avenue to shore up its financial buffers with 200 billion dollars headroom.
“Nigeria can do much more than that, as we have much more non-financial buffers than Saudi Arabia,” he said.
He said the options to unlock Nigeria’s resources in a post-boom economy included leasing the 238 aging and uneconomic prisons and the aging and uneconomic barracks across the country.
He said they could be leased to individuals to develop for economic value as was the case of India.
Teriba said the Nigerian economy had gone from boom to bust, thus, dealing with shortfalls in reserves and prices of oil, and that Nigeria needed to work out a methodology to deal with the shortfalls.
“Nigeria has a huge head room to go for equity and should think of getting her own money and not relying on others,” said Teriba.
Teriba cited the example of how private investors were earning handsomely from the Nigeria Liquefied Natural Gas (NLNG) and offering good returns to the Federal Government.
Amaka E. Nliam