The federal government will be repeating mistakes of the past should it sell some of the nation’s assets as has been proposed in some quarters, Chukwuma Soludo, former governor of Central Bank of Nigeria (CBN), has said.
Asset sale has recently emerged as one of the strategies for Nigeria’s quick exit from its current economic recession, and notable public figures have argued for and against it.
Writing on the subject on Monday, Soludo said he initially labelled the asset sale suggestion a “joke” when it first began to emerge, but when the senate and NEC joined the “convenient but flawed call”,
he decided to lend a voice to the matter.
He said that although he would ordinarily not join issues, the matter in question is “critical”, especially due to the assumption that the move would help to “build reserves and provide funds for immediate spending” and thus ensure that this recession will be the “shortest” ever.
“Part of the legacy of the oil resource curse on matters of public finance is a mindset that resorts to easy, albeit lazy approach to ‘quick fixes’ — with a gaze on the short term even when the issues are structurally long-term. So, I understand the mental framework that drives such a proposal especially given the pressures to show immediate results,” he said.
“But for the record, it is our considered view that the proposal is based on a false foundation. Our thesis is that in extreme, exceptional circumstances, sale of certain assets could be a last resort option but that Nigeria is currently not near that threshold and the institutional framework for its effective use is also not in place.
“Furthermore, we argue that any sale of assets now amounts to chasing pennies when by acts of omission or commission, we are losing pounds. Such a hasty auction of national assets can only benefit a privileged few with cash and access while jeopardizing Nigeria’s long-term economic interests. It will be a historic mistake….”