By Titus Eleweke
A renowned Economist, Dr. Ayo Teriba, has canvassed for Nigeria to open its economy for privatization, stressing that it stimulates foreign direct in-flow.
According to him, privatisation was the tool that most countries used to square their liquidity and beef up their economies, saying that Nigeria can also do the same by privatising some of her key sectors.
Teriba said that a macro-economic approach to privatisation is ideal and major best practices acceptable all over the world.
According to a statement issued yesterday in Abuja by Head, Public Communications of the Bureau of Public Enterprise (BPE), Amina Tukur Othman and made available to The Authority , he gave the hint while presenting a paper titled: Macro-economic Role of privatisation on the Nigerian Economy during a one-day orientation programme for members of the Stakeholders Engagement Committee (SEC) of the National Council on Privatisation (NCP) in Abuja .
Teriba who is the Chief Executive Officer of Economic Associates explained that illiquidity was the Nigeria’s main challenge.
“To solve Nigeria’s liquidity problem, she needs foreign exchange inflow. Nigeria’s annual export revenue has been split. Nigeria’s problem is that, other problems are symptoms of the liquidity problem. Recession is reflecting liquidity shortage”, he said.
He said that privatisation was now the trend the world over, citing Saudi Arabia and India which planned to privatise some of their critical sectors to raise funds to develop their countries.
Teriba said that Saudi Arabia for instance, planned to raise about $200 billion through the privatisation of 16 sectors ranging from healthcare, airports to education.
According to the renowned economist, the federal government ownership of vast amounts of idle, but valuable land and buildings means vast asset-conversion headroom.
“There is huge headroom for unlocking liquidity from state-owned assets to meet shortfalls. Nigeria’s massive non-financial assets are convertible into financial buffers. Saudi is exploiting this avenue to shore up its financial buffers with US$200 billion headroom. Nigeria can do much more than that, as we have much more non-financial buffers than Saudi”, he said.
He gave options towards Nigeria unlocking resources in a post-boom economy to include the 238 ageing and uneconomic prisons, and the ageing and uneconomic barracks across the country which could be leased to individuals to develop for economic value, citing India which has taken advantage of such venture.
Teriba said the Nigerian economy has gone from boom to bust, therefore, dealing with shortfalls in reserves and prices of oil, Nigeria needs to work out a methodology to deal with the shortfalls.
He maintained that privatisation places a huge role to deal with the shortfalls, stating that the shortfalls are not temporary but permanent.
He also cited an example of how private investors were earning handsomely in the Nigeria Liquidified Natural Gas (NLNG) and paying the country well.
The Economist called for the privatisation of the Transmission Company of Nigeria (TCN) as privatisation is the answer for the country’s economic development, stressing that the budget and expenditure of the Federal Government were shrinking and we don’t get saved by cyclical swings but buffers.