The Nigerian Federal Government’s plan to commence the sell-off of several state-owned assets is geared at raising funds that will go towards financing the country’s expensive 2018 budget.
Come early October 2018, the Government will commence the sale of assets in ten state-owned corporations, a move that is expected to generate some ₦289 billion; about $797 million.
The Director of Nigeria’s Bureau of Public Enterprises, Mr Joe Anichebe, disclosed this to Bloomberg over the weekend during an interview in Abeokuta. According to him, final preparations are being made to sell off the companies. Two of them – NICON Insurance Limited and Skyway Aviation Handling Co. (SAHCOL) – will be sold early October through an IPO, he said.
Back in June, President Muhammadu Buhari had appended his signature to an ambitious ₦9.1 trillion 2018 budget which it has since struggled to finance.
Meanwhile, the Government had in the past hinted at plans to fund the budget with money from other sources other than oil which is the country’s economic mainstay. To this effect, the Bureau of Public Enterprise made a commitment to the tune of ₦306 billion, most of which it is now trying to raise through the planned privatisations.
Recall that the Government last week divested about 21% of its shares in the Nigerian Security Printing and Minting Company (NSPM), a move that resulted in the realisation of the sum of ₦17.3 billion as Mr Anichebe disclosed.
The Bureau of Public Enterprises also disclosed that the agency will soon go after owners of previously-privatised public assets who have failed the terms and conditions of the deal.
In the meantime, the economy is underperforming
The poor implementation of the 2018 budget has not augured well for the Nigerian economy which recently emerged from a debilitating economic recession. To worsen this situation, a recent analysis by Nairametrics shows that the country has continued to gradually slip back into recession since Q1 2018 when the GDP declined by 1.95%.
Now as the Nigerian election season continues to approach fast, there are growing concerns that the present economic situation may become exacerbated due to huge spendings which may ultimately drive up inflation.