The Governor of Central Bank of Nigeria (CBN), Mr Godwin Emefiele, has said the government was ready to offer more of its assets for sale soon.
The sale would be undertaken on the platform of the ongoing privatisation programme aimed at raising more money to implement the country’s 2018 deficit-based budget.
The Nigerian Security Printing and Minting Company was offloaded, with the Central Bank of Nigeria (CBN), which already has a majority stake, emerging the preferred buyer, given the company’s security status.
Emefiele, who made the disclosure while briefing the Nigerian delegation at the end of the International Monetary Fund/World Bank Group meetings in Bali, Indonesia, yesterday affirmed that more assets are in the offing.
“I am aware, as a member of the National Council on Privatisation, that more are coming and I believe in due course that the Bureau of Public Enterprise (BPE) will make this available for us.
“I am aware of the situation of Ajaokuta Steel Company of Nigeria. It is also on the cart, first for a total review of the process of privatisation and payment, so that our aluminum sector can eventually come alive,” he said.
Also, the CBN told investors that it would continue to defend the local currency through exchange rate interventions, to maintain price stability and avoid currency depreciation.
Assuring stakeholders that the country’s fundamentals support the move, the apex bank noted that it is also a way of protecting financial institutions that would record increased non-performing loans in currency depreciation.
According to Emefiele, despite the increasing capital reversal, Nigeria has lost reserves only by a margin, compared to other countries. But at the same time, it has sustained stability in foreign exchange market.
“I think we have done a very good job, not only in trying to maintain a stable exchange rate but also trying to avoid depreciating our currency so far in these early days of global normalisation.
We are going to need to build buffers but unfortunately I must say that we are in a period where it is difficult to talk about building reserves. You can only build reserve buffers if you want to hold on to the reserve, while allowing your currency to go. And wherever it goes is something else.
“It is a choice we have to make. And at this time, the choice for Nigeria is to maintain a stable exchange rate, so that businesses can plan and we don’t create problems in the banking system assets.
Naturally, when this happens, it results in weakening of assets, raising of non-performing loans and other wide implications. This is why we will maintain the posture we have and we believe that it is sustainable in the short run,” he said.
But Emefiele’s disclosure on Ajaokuta Steel Company elicited mixed reactions. According to Prof. Ken Ife, a macroeconomic policy analyst, “The decision to privatise it is a wise one because the complex remains one of the white elephant projects we have in Nigeria.
We need to look for a competent investor with a large war chest who can inject the needed funds to revatilise it, so that it can play its role in the country, providing the necessary steel derivatives for the rail, auto, manufacturing, building and construction industries across and beyond the country.”
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