The Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) has advised against any sale of the nation’s equity in the Joint Venture (JV) Partnership with the International Oil Companies (IOCs). This is contained in a statement made available to newsmen by the commission’s Head of Public Relations, Mr Ibrahim Mohammed, in Abuja.
According to the statement, the commission is against the sale because it believes that the country in the long run stands to lose rather than gain revenue in the proposed transaction. It stated that the advice was due to a call by some financial agencies to sell 30 per cent majority stakes in JV with multinational oil companies to “shore up government finances’’.
“The outright sale of the Federation’s Equity Shares in the JV with IOCs will directly impact negatively on the Federation Account. The equity crude from the JV, which forms most of the revenue from oil to the Federation Account, will be lost completely.
“Furthermore, the equity share is an asset of the Federation and not that of the Federal Government so no tier of government has the right to sell the asset,’’ it stated.
It stated also that it was poor economics for government to sell strategic national resources to meet short-term financial obligations.
Furthermore, they advised the government to consider granting marginal oil fields to Nigerian Oil Companies to develop so as to increase their production quota and boost the Federation’s revenue base. Finally, RMAFC called on all tiers of governments to take advantage of the shortfall to embrace economic diversification with a view to reducing the over dependence on oil revenue. “Because of the volatility of prices and the fact that hydro carbon resources are exhaustible and non-renewable, it has become imperative for Nigeria to develop the non-oil sector. This will provide the much needed revenue for infrastructure development and provision of basic services,’’ it stated.
