Buhari led FG to sell, concessions Tafawa Balewa square, 35 other assets for N493.4BN

Barring any last minute change of plans, the Buhari led Federal Government has perfected plans to generate a total of N493.4bn from the sale or concession of about 36 of its assets across the country.

Some of the assets up for sale or concession include the Tafawa Belewa Square, the country’s refineries, the International Conference Centre in Abuja, Yola Electricity Distribution Company, Zungeru Hydro Power, among others.

The assets and the projected amount expected from their sale or concession were contained in a document that was put together by the Bureau of Public Enterprises and sighted by our correspondent.

The document from the BPE showed that the properties were classified under energy assets, industries and communication department, as well as development institutions and natural resources.

Others include infrastructure and public private partnership and post transaction management department.

The Federal Government had said that it would sell or give out in concession some of its assets in order to raise funds to finance the 2021 budget.

Just last month, the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed had told the National Assembly that the Federal Government would sell selected properties to fund this year’s budget.

Aside from selling some of its assets, she said the Federal Government would also engage in domestic and foreign borrowings to fund the 2021 budget

The 2021 budget is made up of N13.08trn up by 22.9 per cent from the N10.8trn 2020 budget, with  revenue projected at N7.5trn, while the deficit amounted to N5.21trn.

The budget of N13.08trn expenditure comprises Capital Expenditure of N3.85trn, Non-debt Recurrent Costs of N5.65trn;
Personnel Costs of N3.76trn; Pensions, Gratuities and Retirees’ Benefits of N501.19bn; Overheads of N625.5bn; Debt Service of N3.124trn; Statutory Transfers of N484.49bn; and Sinking Fund of N220bn to retire certain maturing bonds).

The aggregate revenue available to fund the 2021 budget is projected at
N7.89trn which is 35 per cent higher than the 2020 revised budget of N5.84trn.

In aggregate, 31 per cent of projected revenues is to come from oil related
sources while 69 per cent is to be earned from non-oil sources.

Overall, the size of the budget had been constrained by relatively low
revenues.

Further analysis of the BPE document, which was submitted to the National Assembly, showed that the government would earn the highest sum of N484.476bn from the energy department.

Projected earnings from industries and communication department, development institutions and natural resources were N9.239bn and N51.112m respectively.

No revenue was projected from infrastructure and public private partnership, rather a total cost of N626.2m would be spent on this department.

For the post transaction management department of the BPE, the government’s projection was to earn N212.458m.

However, it was observed that while the country’s four refineries were grouped under energy department and classified as core investor sale, the amount to be earned from the facilities was not stated in the document.

Similarly, the Transmission Company of Nigeria was grouped under energy department and would be under concession, although no amount was stated as the expected earning from the TCN.

The Lagos International Trade Fair Complex, Tafawa Balewa Square, River Basin Development Authorities were grouped as assets for partial commercialisation and concession.

Also, the Abuja Environmental Protection Board, Abuja, the ICC, Nigerian Film Corporation, among others would be commercialised or given to concessionaires.

Stakeholders had repeatedly advised the government against the sale of the country’s assets saying it would further push the economy towards total collapse.

The Executive Director, Civil Society Legislative Advocacy Centre, CISLAC, Awual Rafsanjani, said, “This is not a good move by the Federal Government because we have been advising the government to plug leakages and waste, and a lot of diversion of public funds has been going on but the government seems not to take drastic measures to at least minimize diversion of public funds and assets.

“Therefore we need to ensure that the country does not entirely collapse. The government needs to do everything possible to block leakages and there are many other measures the government should have taken.”

The Chief Executive Officer, Cowry Assets Management, Johnson Chukwu, said while the privatisation of these asset may help to cushion the negative impact of drop in revenue, such method of raising revenue is not sustainable.

He said, “To some extent, they will go to cushion the deficit that the government is facing in terms of budgetary position.

“But trying to raise about N434bn will be a drop in the ocean compared to the level of budget deficit the country is already facing today.”

Amidst Nigeria’s revenue decline, Chukwu said the government needs to eliminate the overlapping functions in the different Ministries, Departments and Agencies of Government.

While lamenting the huge duplication in spending, the expert said the cost of those duplications are so burdensome on Nigeria’s declining revenue.

The Cowry Asset CEO noted that moribund institutions where the government pays salaries to employees needs to be eliminated to ease fiscal burdens on the country’s treasury.