Frank Aigbogun, publisher of BusinessDay Newspapers, has urged the Federal Government to sell off the dead assets that scattered all over the country to raise funds.
Aigbogun gave the advice while speaking on the current economic challenges in Nigeria on the Arise Television Friday.
He also strongly believed that after so many years of borrowing to fund consumption, it makes sense to begin to take a new direction.
He emphtically said: “We cannot continue to borrow; we need as they say, to begin to think about cutting our cloth to our size. So, I align with the views of the Finance Minister that Nigeria cannot borrow endlessly, especially, the ways it has done in the past.”
On the cost of governance, he suggested that the cost has to go down.
“I think that is the major problem that many people have that the government own message is being compromised by contradictions. You cannot ask Nigerians to tighten their belts and you then give license to people in government, whether in the Executive or the Legislature to spend as much as they want to as if spending is part of fancy. Yes, we all must tighten our belts, we can’t rely on borrowing, but that call, must be a call that applies to all spectrums of the Nigerian society, the people in their homes, the businesses and of course, government officials as well,” he said.
Also speaking on whether the government can generate money to fund its activities without borrowing given the current challenges, the media guru urged the government to fall back on its array of dead assets to raise funds.
“There are capital or assets just lying waste all across the country and if even by his own estimate, they are in trillions of Naira. Remember that when in May, precisely in his inaugural address, the President announced to everyone that ‘subsidy is gone’, it was partly to deal with the fiscal crises that Nigeria was in and it was meant, we were told, to save something in the region of N4trillion annually, minimum. When, as he said , the currency was also adjusted with the convergence of rate, it was also thought that significant cash will flow to government by halting what was easily a subsidy of forex for those who were able to access it at the official rate. So, those two measures were aimed to significantly ease the fiscal crises Nigeria was in.
“But there is also the crisis of foreign exchange which cannot be dealt with easily internally, at least, not in the short term. We have heard a number of pronouncements from government officials about engagements with foreign organisations, foreign countries, seeking with them, an immediate foreign exchange lifeline, to get industries back in shape, all over again with the hope that we can catalyse and increase economic activities, grow GDP and by good management ensure inclusive economic expansion.
“So, I think that in the short term, that is what we must do. That might , if you like, amount to short term borrowing. There is the idea of securitising future earning of our own portion of earnings from the Liquefied Natural Gas also, indication that there is room to borrow on the account of future crude oil sale. If we can get something in the neighborhood of $10b to $15b, that can help us to restart the economy. That will only help for a time. You must begin to ramp up oil production so you can fund future foreign exchange needs. You cannot continue to borrow.”
On his assessment of Tinubu’s government policies for the past months, he said: “I don’t want to go into the politics of whether the President had experience at the national or subnational levels. People do come to central government from the sub regional government, I don’t think that is a disadvantage. What we should expect is that wherever the president has come from, when he gets there, then he must hit the ground running. It is almost six months now, when he announced that subsidy is gone and the foreign exchange rate will be merged. Six months after, we begin now to imagine that, that policy was not properly through.
“When you talk about misalignment today, that is what people are alluding to. Once you took out subsidy on petroleum and you also converged the rate, at some point, the robber will hit the road, as we have seen in Nigeria. The subsidy that went out through the window has come back in some form or format .
“I also believe that you are seeing some good signs. It is like, we both look at the same cup and one says it is a cup half empty and another says it is half full. It just depends on your mind set. Nigerians have easily become very cynical on the basis of experience that we have had and those of the last eight years. Also because, when you get out of the rain and go under a shade, it takes quite a while before your body gets dried. So, there is still that effect that we had. It is as if things are still very bad and we all feel very bad, but I believe that the government is making the right noises, some of them are disjointed, we need to see everyone in government coming together and heading in the same direction.
“In terms of execution, we want to see that. I believe while there appears to be some progress, until we can bring in significant foreign exchange to keep the volatility of the Naira under control, I think it will be difficult to see progress by way of economic management.”
Aigbogun also sees the current administration’s efforts at wooing foreign investors as “a mix bag” of sorts.
According to him, “We have seen the President engage with his counterparts around the world in India, Saudi Arabia, that’s good. I think the President must be seen to be the chief salesman for Nigeria. You have to be at the table if you are not there, no one will speak for you. I think these engagements need better coordination, the messaging has to be tight and proper. You have seen messages go out and yet nothing is achieved.
“I think that’s problematic. We must begin to show signs that Nigeria is open for business. Not just taking about it, we need to see results.
Six months after the inauguration of this administration, one major area Nigerians expect to see impact is in the area of oil production. So far, I think we are just dancing around the edges; the NNPC that got us into this mess needs to be cleaned up. I think there needs to be a new leadership enthroned. A leadership that is result-oriented, not giving excuses; a leadership that appreciates that Nigeria’s economy has been brought to its knees partly by the massive failure of the state-owned oil company. We are seeing that.
“Foreign investors are watching. When you see things happening today at meetings around the world, foreign investors will come to listen to the story about Nigeria, after the story is told, they go back; they are still waiting for major signs that Nigeria is ready to engage with the world. So far, I do not think that persuasion is ringing as loud as it should.”
Speaking on rising inflation, Aigbogun posited that the rsing level of inflation will further slow down economic growth.
“BusinessDay did a story that showed that inflation is halved in the UK, it has fallen dramatically in the US, even in the neighbouring country, Ghana, it is easing but it is not the case in Nigeria. It was paradoxical; we are doing the same thing that the CBN around the world are doing, but we are getting opposite results, it is a measure of the economic management that we saw over the last eight years. A complete misalignment.
“You need now to begin to see proper alignment for monetary policies to begin to be effective. Until that time, for instance, a cessation of the madness of the CBN policy called Ways and Means of borrowing or if you like, simply printing of the Naira, and put in place good measures to increase agricultural production and improve storage and ensure that they go straight to the market rather than lying waste in the farms, you are going to continue to have interest rate go up and the impact you have is not a salutary effect of inflation going down.”