Source: FG targets $15bn from proposed asset sale, to insert ‘buy back’ clause – The Cable

gas opportunities

Federal government intends to raise between $10bn and $15bn from the proposed sale of assets to boost foreign reserves, a presidency official has told TheCable.

The official said there was no proposal for outright sale and there was going to be a repurchase clause in any sales agreement signed by the government.

The repurchase option will guarantee that the federal government can buy back any such assets if circumstances change in the future.

The asset sale proposal has been widely condemned after industrialist Aliko Dangote mooted the idea two weeks ago.

“The federal government has no plan to sell off its shares outright in the Nigeria Liquefied Natural Gas (NLNG) Ltd, where it owns 49% shares and the balance 51% is owned by private foreign interests,” the top official said.

“What the government might consider is to reduce its current 49% shares by 5% so that its shares might be slightly reduced to 44% or thereabout to raise the much needed dollars.

“The federal government doesn’t own the entire gas company, and will certainly not sell off its entire shares, but it is open to the possibility of selling down its 49% ownership by 5% or thereabout.”

No decision has yet been taken, the official added.

But the proposal has received the backing of governors and Senate President Bukola Saraki, while labour unions, prominent activists and opinion leaders have opposed it.

“With the shrinking foreign reserves of the country, there is a need to take some drastic steps to shore up the reserves,” the presidency official said.

“An injection of about $15bn into the reserves has a positive impact on the entire economy as a multiplier effect.”