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Privatise Nigeria’s refineries, NNPC using LNG model, Atiku tells FG

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FORMER vice president Atiku Abubakar has asked the federal government to privatise Nigeria’s obsolete refineries and the Nigerian National Petroleum Corporation (NNPC) using the time-tested LNG model.

Atiku said this on his Twitter handle on Sunday where he proffered solutions to Nigeria’s endemic unemployment rate, which rose from 27.1 percent in the second quarter of 2020 to 33.3 percent in the fourth quarter of the same year.

“We can no longer say we cannot afford this. We can.  As a nation, we are better off privatising our refineries and the NNPC through the time-tested LNG model in which the FG owns 49 percent equity and the private sector 51 percent,” he said.

NNPC
NNPC
Credit: Thisdaylive

The LNG model is an ownership system in which NNPC owns 49 percent of Nigeria LNG, with  Shell Gas B.V. owning 25.6 percent, Total LNG Nigeria Ltd having a 15 percent share and Eni International having a 10.4 percent stake.

Being a joint ownership, there is little interference on the part of the government, which has a minority stake in the business and  enjoys dividends and returns on investment.  The former vice president said that in 20 years ending 2020, the NLNG delivered $18.3 billion dividends to government irrespective of taxes and other benefit accruals to the country.

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Atiku, while speaking on the state of the economy, said Nigeria must move towards a singe exchange rate regime that would be determined by market forces, stressing that federal and state governments must reduce taxes to make Nigeria more business and investor friendly.

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Atiku’s position on exchange rate regime in Nigeria is predicated upon multiple rate system operated by the Central Bank of Nigeria( CBN). While the official rate is N379/$, the parallel market rate hovers between N480-N485/$.  The International Monetary Fund (IMF) has warned the country’s monetary authorities to embrace a single market regime, but this is yet to happen.

Atiku  also noted that financial and monetary institutions must be free from political interference to enable them perform their roles optimally.

“Financial and monetary institutions like the Central Bank of Nigeria and the Securities and Exchange Commission (SEC) must be free from the type of political influence that resulted in the prohibition of Bitcoin and other cryptocurrencies,” he said.

The former vice president, who expressed concern that government failed to heed his earlier warning on rising unemployment said, “I’ve never felt so bad at being proven right, as I am by the report from Bloomberg Business on Saturday March 27, 2021 that Nigeria is to emerge as country with the highest unemployment rate on Earth, at just over 33  percent.

Port Harcourt refiner
Port Harcourt refinery
Credit: The Punch

“What the government must realise is that the unprecedented insecurity Nigeria is facing is as as a result of youth unemployment.

“Idleness is the worst feature of unemployment because it channels the energy of our youth away from production and towards destruction, and that is why Nigeria is now the third most terrorist nation in the world.”

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Atiku observed that government’s implementation of the discredited command and control policies had led to massive capital flight from Nigeria.

“How did Nigeria get here? We got here by abandoning the people-centred leadership and free trade and deregulatory policies of the Obasanjo years which saw us maintain a single digit unemployment rate, and implementing discredited command and control policies that have led to massive capital flight from Nigeria.”

On the $1.5 billion approved for the rehabilitation of the Port Harcourt Refinery, the former vice president said there was no need for the government to get involved in sectors that ought to be left in the hands of the private sector.

“In 2020, I recommend that to immediately and drastically bring down youth unemployment, every family in Nigeria with at least one school age child, and earning less that $800 per annum should receive a monthly stipend of N5,000 from the government via their BVN and NIN on the condition that they verifiably keep their children in school.

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“My recommendation still stands, and stands even stronger now that we have crossed the rubicon in youth unemployment,”  the former vice president said.

“If we can get the 13.5 million out-of-school Nigerian children into school, we will turn the corner in one generation. If we do not do this, then the floodgates  of unemployment will be further opened.”

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