The Nigerian Economic Summit Group (NESG) has advised the federal government to untie Nigeria’s underperforming national assets to drive the economy and enable its citizens to experience prosperity.
The NESG gave this advice on Wednesday, when its Chief Executive Officer, Mr. Tayo Aduloju and Chairman, Board of Media and Publicity, NESG, Mr. Udeme Ufot, paid a courtesy visit to Arise News Group and THISDAY Newspapers to sensitise the media on the upcoming 30th Nigerian Economic Summit with the theme, “Collaborative Action for Growth, Competitiveness, and Stability.”
They were welcomed by the Managing Director of THISDAY, Mr. Eniola Bello; THISDAY Ombudsman, Mr. Kayode Komolafe; Dr. Reuben Abati of Arise News Channel’s ‘The Morning Show and the Director Engagements and Guests Liaison, Arise TV News, Mr. Joseph Ushigiale, amongst others.
Bello, assured that the media channels would collaborate in publicising the NESG activities.
Speaking during the visit, Aduloju emphasised that Nigeria needed transparency on the state of its revenue, assets and liabilities.
According to him, Nigeria needs to attain oil production that is above two million barrels per day to stabilise its economy.
He added: “On the assets side, Nigeria has $14 trillion in assets. As I keep saying to people, if we all belong in one family and our father just died and left $14 trillion worth of assets, and might have borrowed maybe $100 billion. One of us might figure out how to pay the liabilities and continue to enjoy the prosperity of the inheritance.
“That is the problem with Nigeria. Our (Nigeria’s) assets are not firing. Most of our assets are underperforming their potential because they are gridlocked in policies, legislations, political and sometimes vested interests constraints. The key is to unlock these constraints.
“When I got into government under late President Musa Yar’Adua’s administration that reversed the sale of the refineries, which I do not know whether there is wisdom in it because we are back to whether to sell the refineries or not decades later.”
He argued that half of the discussions on Nigeria’s assets are political.
“Power and some of our critical assets did not perform because those we gave them to were part of our patrimonial political culture.
“Any time we give assets to those who are committed to moving them forward for their interests, things go well like in the telecoms reform,” he said.
Aduloju said the first challenge in the Nigerian oil and gas sector was that the country has continued to play games with a sector that it knew could do better.
According to him, it requires political elite consensus anywhere in the world that the game is over and the time to sanitise the industry has come for the oil and gas sector to be competitive.
Aduloju, also argued that the removal of the petrol subsidy should not be seen as a policy but as one of the ways the government tried to achieve fiscal balancing.
He said: “I cringe when people say that subsidy removal is a policy. It cannot be policy. It is a government action that is a symptom of a different problem.”
He said Nigeria has gone through four patterns of subsidy implementation in the past 50 years, which included fathom subsidy payments created by the military regimes. This, according to him, was succeeded by paying for subsidies from government savings, which ran between 1999 and 2010.
But from 2011 to 2014, Nigeria was managing subsidies as the first charge on its revenue but entered into deficit financing of subsidies between 2015 and 2023, he said.
But in May 2023 a new president came and declared that the subsidy regime was gone after looking at the poor state of the country’s balance sheet.
“I think subsidy removal is a bad language to describe fiscal balancing or disciplining. I think the proper thing is that there has been poor fiscal discipline in the oil and gas sector and it has created unintended consequences for a subsidised product.
“So, what must we tweak in the country’s balance sheet to still do subsidy and balance things out? It is up for debate. If Nigeria can find other ways to generate liquidity other than subsidy removal it can continue with subsidies and solve other problems.
“I think that what we failed to do (before removing subsidy) was not having a proper national conversation. And that is where transparency would have helped.
“That could have created the choice pillars within which fiscal balancing could have occurred. But this government chose subsidy removal. Fine! Now it must deal with its pass-through effects,” Aduloju said.
He added: “Our position is that if you wanted to procure this kind of macro reforms you have to do it in a sequenced manner with a well-bundled set of reforms that provides forward guidance to the market while simultaneously managing the cushioning effects of the reforms on households, individuals and businesses.”
He clarified that setting up local refineries might not make petrol cheap because the cost of doing business in Nigeria is not cheap.
“Some of us are insisting that the PIA must be implemented. The law made for the market must be implemented. Run the law. If it is not sufficient let us go back and change it,” he said.