•Advises against paying N75,000 to 70 million Nigerians
•Describes Chinese loans as worst loans under heaven
CHIGOZIE AMADI
The Chief Executive of Economic Associates, Dr. Ayo Teriba, has advised the federal government to sell its public corporations like the Nigeria Railway Corporation, Transmission Company of Nigeria (TCN), Nigerian National Petroleum Company Limited (NNPC), among others through the stock markets in order to accumulate adequate foreign reserves that would stabilize the exchange rate and rev up economic productivity.
According to him, the way to improve the welfare of Nigerians is to strengthen the exchange rate by building foreign reserve to $50 billion or more, which would bring inflation down to 5.0 per cent by next year
Teriba gave this advice yesterday while presenting the 2025 Economic Outlook at the Association of Corporate Treasurers in Nigeria (ACTN) t themed – “Navigating Nigeria’s Economic Landscape in 2025: Opportunities and Challenges for Corporate Treasurers.”
Meanwhile, the President of ACTN, Mr. Adeyinka Ogunnubi, in his welcome address said that theme is a clarion call to all to embrace innovation, resilience, and strategic foresight as “we prepare to face the unique economic realities of the coming year.
He added: “We are navigating an era defined by inflationary pressures, fluctuating interest rates, dynamic regulatory changes, and geopolitical uncertainties.”
Teriba, in his presentation, stated that Nigeria is currently among the increasingly illiquid countries and have failed to attract enough Foreign Direct Investments (FDIs) that would diversify their economies by ignoring to sell their national assets to private investors in foreign currencies.
He said: “Only countries that align with the evolving global reality of growing inward FDI stocks by financialising (selling) their assets in the face of sluggish exports will remain liquid enough to sustain exchange rate stability and diversified GDP growth.”
Urging Nigeria to unlock liquidity from its assets, Teriba said that a country that has had success stories with privatising its Liquefied Natural Gas (LNG) project as far back as 1994/95 and fully privatising its telecom sector in 2001 should know that it would succeed if it offered equity investment to foreign investors in sectors like rail transport, power transmission, oil pipelines and refineries.
His words: “Having this track record, Nigeria has no business going to take loan from China to build rail. Chinese loans are the worst any country can take under the heaven because it is really not a loan. It is an export and import transactions. Ideally, it should be batter.
“They will give you loan but you will not get a dime. On the contrary you will pay China money in what they call counterpart funding. All their loans are going to come to you in goods and they will make you sign with their export and import bank that it will pay on your behalf.
“And all the money will be paid to Chinese government. But your own counterpart funding is to fund the labour that are coming to work.
“No honest government official will take that loan.
“Nigeria did telecoms that have connected 200 million lines and did not have to take loan from China to do it. Why cannot Nigeria open up its rail sector, power transmission, pipelines to investors the way it opened the LNG and the GSM to investors?
“These are the sectors with the largest absorptive capacity in the country that if you open them, you will solve the issue of foreign reserve adequacy.
“I am suggesting that Nigeria should stop borrowing against income and output but borrow against assets.”
Teriba pointed out that Saudi Arabia, United Arab Emirate (UAE) and Malaysia borrowed more heavily than Nigeria but with asset like bonds that are potentially convertible to equity.
He said that rather than borrowing a leaf from these countries, Nigeria buried its talent in the ground and do not know what the market values of its NNPC, LNG, NRC, TCN are.
“Saudi Arabia stopped what it had been doing and took 17 sectors to the market for privatisation in the quest to have adequate liquidity that will help them to stabilize.
“Nigerians have no business suffering any of the things we have suffered for 10 years. Within six months of determined effort to securitise its assets, Nigeria can come out of its mess.
“Nigeria’s evolution has been a nightmare by policy choices. But we can transit to an Eldorado scenario by moving toward and asset centric macro policy because Nigeria is very rich in assets. We will see stability return and growth resume.
“Government should not pay N75,000 to 70 million Nigerians. It should put the money in growing foreign reserves so that exchange rate will appreciate.”
