The answer here is NO! Privatization is not the only way out of recession.
what really came up was on how to get out of recession in the last quarter of the year? The problem in view here is on the fastest way of getting out of recession in the short run.
Well in my own view, I think there are two things involve
1-lack of hard currency in the economy
2-no enough money in circulation
Normally when an economy is facing this kind of challenge, it mostly affect other factors which if not properly taken care of, the economy will eventually be in recession, which is what we are facing now.
Therefore CBN As the Apex financial authority are to come up with a policy that'll inject money in the economy maybe through low interest rest or reducing the cash reserve ratio to enable commercial banks to have access to more money that can be accessed by the masses through encouraged loans of low interest rate.
Mr Godwin of CBN took that step by injecting N1trn in the economy through banks but unfortunately it didn't work because the banks focused on giving loans to traders instead of empowering entrepreneur and farmers,there by the traders went purchasing foreign currencies for the normal importation of goods which eventually devalues naira the more, because of the "free floating exchange rate policy" we have in nigeria.
The next question here is, then what can nigeria do to get out of recession? For recession is getting worst by the day, people are already starving, therefore the federal government threw a challenge to the economists to get nigeria out of recession, that Nigerians doesn't even want to hear the problem but the solution.
Well there's no economic policy in this world that can help nigeria get out recession in the short run,
For any policy to be adopted can only work in the long-run which we believe Nigerians are to impatience to resist a long-run effect.
There come dangote, saraki and others debating on how to get money that can be injected into the economy. (Refer to my previous post on selling of oil assets or borrowing-a way out of recession).
THE POSITIVE IMPACT OF PRIVATIZING OIL INDUSTRIES IN
NIGERIA.
1- it will curb the problem of recession in the short-run and in the long run it'll be a major contributor in stabilizing the economy.
2- Nigeria will have a whopping amount of $50B to inject into the economy in which this large amount of money that can used to revive agriculture and will also increase the production and investment level of nigeria.
3-it'll ease the stress of nigeria looking forward to borrowing of $2B to fund the Budget of change.
4- privatization as a whole plays a vital role in promoting the efficiency and the effectiveness of any public sector being privatized
To mention but few, there are also some cons in privatizing a government property but in the kind of stage we are, and the kind of people we are governing the pros of privatizing the oil assets are more of the cons.
Indeed privatization has it own cons which are very obvious and can be well stated but considering the kind of situation we are being faced with we have no option but to privatize.
Assuming we take a particular policy that will help us get out of recession in the long-run (2-3-4-5 yrs) coz we believe privatization may not be a good idea. What do u think will happen if
1-Dollar hits $1-N1000
2-inflation rose to like 20%
3-un-employment rate increase
4-level of crimes increase
5-foreign investors continually taking their money back home
6-nigeria continually be looking forward to get loans to fund budgets?
Assuming all is well in nigeria, believe me I'll be the first person to against the sell of any asset considering the disadvantages.
-Muhammad Basakkwace
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