The Governor of the Central Bank of Nigeria, Godwin Emefiele, has advised the president-elect, Muhammadu Buhari, to consider selling off nearly half of Nigeria’s Joint Venture equity with multinational oil companies, to enable the new government raise a huge balance for immediate developmental projects.

If Mr. Buhari accepts the advice, Nigeria stands to generate about N14.9 trillion, about three times the country’s annual budget, which should be immediately ploughed into providing badly needed infrastructure development, Mr. Emefiele said.

The Nigerian economy has faced continued pressure from spiralling debts, in the face of dwindling revenues resulting from falling global crude oil prices.
Many of the 36 states of the federation are barely able to meet their obligations to contractors and workers from their monthly allocations from the federation account.

Foreign reserves slumped to about $29.9 billion as at March ending.

The CBN governor said the incoming administration should give serious thoughts to the proposal for Nigeria to scale down its majority stakes in the joint ventures currently with various multinational oil companies in the country.

The Nigerian National Petroleum Corporation currently holds, on behalf of the Nigerian government, at least 55 per cent equity in the joint ventures with Shell, ExxonMobil, Chevron, Total, Nigerian Agip, and Pan Ocean.

The partnership means for each daily production of oil in Nigeria, the government receives 55 per cent after production cost had been deducted.

Mr. Emefiele wants government to shed at least 25 per cent of that equity to raise some emergency funds for infrastructure development in key sectors of the economy.

The CBN governor said relevant officials in the Bank have already been directed to evaluate prospects of the proposal to see how it could be realized from the JVs, which account for more than 50 percent of Nigeria’s daily average oil production of 2.3 million barrels.
Mr. Emefiele told the Financial Times of London that the outcome of the study would be presented to Mr. Buhari when he assumes office on May 29.

The governor expressed confidence that Nigeria may rake in about $75 billion (about N14.93 trillion) if the government agrees to cut its JV equity to only 30 per cent.

Private equity companies, he said, could be encouraged to take over the relinquished government stakes and compete with the oil companies, to contribute to the development of the industry.

Part of the proceeds from the equity sale, Mr. Emefiele said, could be utilized in rebuilding macroeconomic buffers in the economy through investments in transport and energy developments projects to grow the economy and create jobs.

He said the government could adjust upwards, petroleum profit tax payable by the oil companies, to compensate for the reduction in government’s equity.
The equity cut back proposal, the CBN governor explained, was one of the most attractive options available in view of the impact of the drastic drop revenue earnings in recent times and the need to avoid piling up more debts.

While Mr. Emefiele’s proposal could meet stiff resistance from oil firms, politicians and their allies dependent on oil resources for patronage, the idea would likely be welcomed by others who support the idea of unbundling the NNPC and curbing corruption by allowing private participation in the sector.

For years, Nigeria’s oil production has stagnated at about two million barrels daily average due to several factors, including the failure to pass the Petroleum Industry Bill.

During his campaigns, Mr. Buhari gave a hint regarding what his administration would do after assumption of office on May 29.

“Our manifesto says we are going to break up the NNPC,” he suggested, “but the ultimate answer may well be to divest the whole thing. It is an idea that will be seriously looked at.”

Mr. Buhari, however, said the immediate priority of his administration would be to get the industry back to a position where revenues that belong to the people are getting into the federation account by stopping the leakages, which is costing the nation billions, if not trillions, of naira..

http://www.premiumtimesng.com/business/181886-revenue-decline-sell-nigerias-oil-stakes-raise-n14-9trillion-cbn-governor-tells-buhari.html

Am not really good in public finance but I think that is a prodigal idea what will happen when the money finish

That's not a good idea.

Emiefele was appointed by Goodluck he never advised Jonathan to do so, why Buhari?...

Foreign reserves slumped to about $29.9 billion as at March ending.

And Okorinjo Iwala thinks she's in a position to advice Buhari on economic policies.

Smh.

The governor expressed confidence that Nigeria may rake in about $75 billion (about N14.93 trillion) if the government agrees to cut its JV equity to only 30 per cent.

Great Immediate revenue to solve today's problems (assuming the funds are used judiciously). However, with only 30% stake in the JV, how will that impact the country's Future revenue stream?

I am not in support of this...What kind of advice is this for God sake?

How Una take day hear all these news self. Abi Una day record their calls? Am forced to ask oh. Wetin bihari tell him wife for night before e sleep Una report am. The kind tea way him maid do for am for night Una report am. The makeup him daughter day use, Una report am. Na wah o

All this cabinet members of Jonathan sef...
Emefiele wants us to sell-off our collective wealth to capitalists Was he drunk when he made this statement?
A kind of advice you get when your friend is drunk and still wants to drive you home.
The kind of suggestion you get from unqualified people in government.
Nonsense

xpat1:
Emiefele was appointed by Goodluck he never advised Jonathan to do so, why Buhari?...

nut-cracking question

How can we be selling our JVs while other countries have almost full operations of their oil business, eg Saudi Aramco and petrobras, so we cant even manage the 60 % equity... this is crazy leaving our major source of revenue to devouring foreign coys.

omenka:
And Okorinjo Iwala thinks she's in a position to advice Buhari on economic policies.

Smh.

but I tot you said nothing was left, you said not even a dime was left in the reserve

The governor expressed confidence that Nigeria may rake in about $75 billion (about N14.93 trillion) if the government agrees to cut its JV equity to only 30 per cent.

What a silly advice that will only solve short term problems. What happens in the long term after the N14.93 trn has been exhausted? It means less revenue for us and more problems in the future. Oga CBN Governor, I beg no try am o... This is NOT good for us in the long term.

This makes sense. Sell part of it off and raise up petroleum tax to make up for the reduction in revenue.

This provides cash to develop badly needed infrastructure (electricity, transportation etc) that will drive growth in non-oil sectors, without having to increase debt profile significantly.

Of course this means a lot of cash in the system and only a responsible govt will be able to handle it well. This is why the CBN governor did not suggest it to GEJ! They would have used it for elections. Good to see that he has more confidence in GMB!

This requires fundamental thinking. Hope it's not another indirect robbery?

Ole gbe-ole gbá or

Owo abu-a fi se Abu lalejo.

Bevista:
Great Immediate revenue to solve today's problems (assuming the funds are used judiciously). However, with only 30% stake in the Jv, how will that impact the country's Future revenue stream?

Well if Nigeria can think toward non oil revenue.... Oil is almost everywhere now so in near future it will be almost worthless to the economy, but for now its risky selling our JVs we dont have alternative resources.

stronger:

This makes sense. Sell part of it off and raise up petroleum tax to make up for the reduction in revenue.

This provides cash to develop badly needed infrastructure (electricity, transportation etc) that will drive growth in non-oil sectors, without having to increase debt profile significantly.

Of course this means a lot of cash in the system and only a responsible govt will be able to handle it well. This is why the CBN governor did not suggest it to GEJ! They would have used it for elections. Good to see that he has more confidence in GMB!

still pondering on this....

This is the worst unsolicited advice ever... So Nigeria should sell off her patrimony? Is that not a pure example of 21st century daylight neo-colonialism? Then what happens to all these cries and hues over state-controlled revenues? This will spirall the country into serious anarchy if attempted.

CHESSBOARD:
How can we be selling our JVs while other countries have almost full operations of their oil business, eg Saudi Aramco and petrobras, so we cant even manage the 60 % equity... this is crazy leaving our major source of revenue to devouring foreign coys.

We have had 60% for years. What have we done with it? Nothing! Politicians loot!

Now that we have a responsible and accountable govt, sell part of it and develop infrastructure. Saudi Aramco has RESERVES that we can't even dream of. There is a future. Our oil will soon finish and the oil price will never get to above $100 again except there is a MAJOR WAR in the ME. Major! best thing, sell off now!

CHESSBOARD:

but I tot you said nothing was left, you said not even a dime was left in the reserve

If you can't point out where I said that, then you must be the biggest fool in earth's galaxy.

Take out lies from the universe and watch Jonathanians stop breathing.

omenka:
If you can't point out where I said that, then you must be the biggest fool in earth's galaxy.

Take out lies from the universe and watch Jonathanians stop breathing.

But seriously, this APC guys. Can't you argue, debate and gist without insults? Elections have come and gone. Grow up guys

gbl01:


But seriously, this APC guys. Can't you argue, debate and gist without insults? Elections have come and gone. Grow up guys

Can't you guys argue, debate and gist without lying?? You grow up.

Mumu.

omenka:
Can't you guys argue, debate and gist without lying?? You grow up.

Mumu.

As expected. Throwing insults for no cause. Can't you just grow up? So if someone lie, you'll insult? What makes you different? Ain't you swiming in same pond of bitterness?

BTW, I won't exchange such words with you bro, I'm not your type

gbl01:


As expected. Throwing insults for no cause. Can't you just grow up? So if someone lie, you'll insult? What makes you different? Ain't you swiming in same pond of bitterness?

BTW, I won't exchange such words with you bro, I'm not your type

You still do sound very foolish. Get over yourself.

Mtcheeew He's only trying to remind baba that he needs to be sacked... All this people with yeye ideas Na so the gele woman self dey drop ideas... Were they not there when everything was going wrong why not give Jonathan those ideas... Awon ode oshi "mofos"

This CBN man is talking like a fresh graduate from the university without seasoned knowledge of administration. He should rather advise the president-elect to curb waste in government and restructure the civil service to gradually shed its idle workforce by introducing policies like shift work while investing heavily in the economy to generate employment and develop infrastructure

omenka:
You still do sound very foolish. Get over yourself.

Thanks.

omenka:
And Okorinjo Iwala thinks she's in a position to advice Buhari on economic policies.

Smh.

What's Ngozi's business with the foreign reserves?

Sweetguy25:


What's Ngozi's business with the foreign reserves?

How can one answer this question without giving you an e-slap??

barcanista:
...What happens in the long term after the N14.93 trn has been exhausted? ... This is NOT good for us in the long term.

I agree with that part of your submission. But the idea is not as heinous as it sounds. The idea could still be fine-tuned to hedge against long term disadvantages. We should not just reject the idea without seriously looking at its merits and finding ways to minimize its demerits.

Its actually a great idea but I doubt the realizable amount the CBN projected. The problem still lies with our fiscal structures. The 75 billion dollars will be shared by all tiers of government. The FG will retain about 30 billion, 25 billion goes to the states and local governments while the remainder will be given to the CBN to defend the naira. At the end of the day, the money will still be wasted.
So it makes no difference.

stronger:


We have had 60% for years. What have we done with it? Nothing! Politicians loot!

Now that we have a responsible and accountable govt, sell part of it and develop infrastructure. Saudi Aramco has RESERVES that we can't even dream of. There is a future. Our oil will soon finish and the oil price will never get to above $100 again except there is a MAJOR WAR in the ME. Major! best thing, sell off now!

who said our oil will soon finish?