Economist calls for sale of prisons, barracks, others
Renowned economist, Dr. Ayo Teriba, has called for the privatization of uneconomic federal government assets, including prisons and barracks, as a means of shoring up its financial buffers.
He said privatization was the answer to the country’s economic development considering that its budget and expenditure were shrinking.
The CEO, Economic Associates, stated this at a one-day orientation programme organized for members of the Stakeholders Engagement Committee, SEC, of the National Council on Privatization, NCP.
Teriba in a paper titled, ‘Macro-economic role of privatization on the Nigerian economy’ said Nigeria should put in place buffers by privatizing some of its assets like the Transmission Company of Nigeria, TCN, to stimulate direct in-flow of foreign investment.
“Privatization is the tool which most countries use to check their liquidity issue and beef up the economy and Nigeria can also do the same by privatizing some of her key assets,” Teriba explained.
He said the country should look at other options of unlocking its resources in a post-boom economy by considering leasing the 238 aging and uneconomic prisons and barracks across the country.
He explained that the prisons and barracks could be leased to individuals to develop for economic value as was the case of India.
According to him, illiquidity was the country’s main challenge: “To solve Nigeria’s liquidity problem, she needs foreign exchange inflow. Nigeria’s annual export revenue has been halved.
“Nigeria’s problem is that other problems are symptoms of the liquidity problem and recession is reflecting liquidity shortage.”
He pointed out that privatization was now the trend the world over; citing Saudi Arabia and India which plan to privatize some of their critical assets to raise funds to develop their countries.
“Saudi Arabia is exploiting this avenue to shore up its financial buffers with $200billion headroom. Nigeria can do much more than that, as we have much more non-financial buffers than Saudi Arabia,” he said.
Teriba said the Nigerian economy had gone from boom to bust, thus, dealing with shortfalls in reserves and prices of oil, and that Nigeria needed to work out a methodology to deal with the shortfalls.
“Nigeria has a huge head room to go for equity and should think of getting her own money and not relying on others.”
Teriba cited the example of how private investors were earning handsomely from the Nigeria Liquefied Natural Gas (NLNG) and offering good returns to the Federal Government.