Business mogul Aliko Dangote believes a wave of asset selling by the government could be the saving grace for Nigeria in the face of the current economic recession.
“I think the real challenge for us is now for us to have the political will in terms of selling some assets,” he told the Consumer News and Business Channels (CNBC) Africa yesterday.
“I think it’s an easier route than the IMF (International Monetary Fund) or the World Bank to borrow money, because what you need to do is actually to beef up the reserves.”
Dangote spoke before Nigeria’s credit rating was downgraded to B from B+ by S&P Global Ratings yesterday.
He urged the government to sell assets in some of its joint ventures with the private sector in an open tender process.
He said that Africa Finance Corporation – a development finance institution established in 2007 – would fetch close to $800 million while government s should also look to sell 100 percent of the country’s stake in Nigeria LNG Limited.
“If I had challenges in my company, I would not hesitate to sell assets, to remain afloat, to get to the better times, because it doesn’t make any sense for me to keep any assets and then suffocate the whole organization,” Dangote said.
S & P branded the economy “weakened more than we expected owing to a marked contraction in oil production, a restrictive foreign exchange regime and delayed fiscal stimulus.”
The economy is set to contract on an annual basis in 2016 for the first time in 21 years, with its all-important oil industry suffering under weak global prices.
The gross domestic product (GDP) dropped by 2.06 percent in the second quarter of 2016, after falling 0.36 percent in the previous three months.
Dangote said the economy should have been diversified a long time ago, lamenting the overreliance on oil.
But he was optimistic that Nigeria would exit recession by the last quarter of the year and said the country “has all the answers” to bounce back to health.