Mixed reactions have trailed the advice given by the Governor of the Central Bank of Nigeria, Godwin Emefiele, to the President-elect, MuhammaduBuhari, over the sales of about 30 per cent out of the 55 percent stake of the country’s Joint Venture equity with multinational oil companies, as a measure to enable the new government raise revenue for developmental projects.
Some industry analysts, who spoke with our correspondent, corroborated the CBN boss’s position on the possibility of the country to generating N14.9 trillion, which could be ploughed into providing some of the needed infrastructure development in the country amidst revenue decline.
Meanwhile, others described the CBN boss’s advice as an ill-conceived idea that is capable of putting the new administration in a tight corner.
According to Mr.OdetolaSeyi, an economic analyst based in the United Kingdom, the advice is the best the government could adopt in view of the rot and corruption that has characterised the downstream sector of the oil and gas industry.
He said, ”The huge attention placed on funding the downstream sector by the government recently, has further deepened the spate of corruption in the sector. The Federal Government has no business in owning stakes in the oil business.
The business of government should end in collections of taxes. Local refineries must be given the opportunity to buy crude oil like any other businesses while the government pays attention to the collection of tax as well as giving of tax credit and other investment benefit to the operators.
Odetola noted that the United Kingdom’s government collects only tax from the companies adding that this is what that country depend on from the oil industry.
He informed that the UK government has no ownership of stakes in any oil business.
He said, ”Government should focus more attention on the regulation of the sector, through ensuring that about 50 per cent of the crude oil explored is refined locally.
The regulation of the sector should be such that owners of oil blocks must also operate a refinery within the country.
The country’s stake in JVs must be sold as the stake in its present form has not impacted the revenue of the country.”
He further noted that Nigerians should not be quick at condemning the idea just because the individual behind the idea is part of the present administration. He added that the CBN despite its forte in monetary policy could also offer advice across board to the government.
Mr.Olubunmi Martins, Director of Strategic Planning, Research Intelligent institute, Lagos State, said that the CBN is permitted by law and the mandate establishing it, to do what its Governor proposed on the sale of Nigeria’s JV equity in a selected number of upstream assets.
He added that, this may not necessarily mean that Nigeria will completely relinquish her interests in the downstream sector, influence or commercial inputs, if not intervention, in the operations of such assets.
Martins said, ‘The proposal sounds reasonable considering the negative impact of country’s inability to meet her JV obligations on project development especially in the area of cash calls.’’
He further warned that it is however pertinent to give the suggestion a note of caution in order to proper get a second opinion on the issue to better analyse the implications in the light of alternative options.
‘’Curiously though, why is the CBN governor unwilling to submit this proposal to President Goodluck Jonathan who employed him?” Martins queried.
In his reaction, Mr Tope Fasua, Managing Director and Chief Executive Officer, Global Analytical Consulting Limited, who is also an economic analyst, challenged the CBN boss for his advice. He however described Emefiele as an economic saboteur, adding that his advice to the incoming administration is not sustainable. According to him, it is not appropriate to sell the assets of the country, especially at a period when the prices are low.
According to Dr.IbilolaAmao, Principal Consultant of Lonadek Oil and Gas Consultants, the CBN should focus more on monetary policies, adding that the Monetary Policy Rate- MPR, should directed structured with a view to optimizing the country’s hydrocarbon assets. She suggested that rather than focusing on stakes in Public Private Partnership, through offsetting parts of the country’s asset in the downstream sector, the Federal Government needed to tackle corruption in the administration of her investments especially in the sector. She added that any well monitored asset by patriotic and honest Nigerians would do 170 million its population so much good.