This was contained in a statement made available to newsmen by the commission’s Head of Public Relations, Mr Ibrahim Mohammed, in Abuja on Wednesday.
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.
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RMAFC warns against
sale of government’s equity in oil JVs
By Olawale Kadir on April 30, 2015 @ 9:08 am@todayngr
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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 was contained in a statement made available to newsmen by the
commission’s Head of Public Relations, Mr Ibrahim Mohammed, in Abuja on
Wednesday.
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.
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