The intention of the Federal Government to sell the nation’s assets to fund the 2021 budget has been received differently by several stakeholders and analysts.
Some have queried the rationale behind selling off assets today to cater to immediate needs, saying ‘it is like mortgaging the future to cater for now’. While other analysts say selling off dead capital is what the government needs to raise the funding Nigeria desperately needs.
The former Governor of Anambra State, Peter Obi, who is antithetical to the idea of selling government assets, expressed his dissatisfaction at the move, which he described as ‘suicidal’ while addressing development and other national issues in an interview on Monday. He further emphasized that government should focus on reducing other government costs rather than selling public assets.
In an entirely opposite view, PwC Partner and Chief Economist, Andrew Nevin took to Twitter to share his opinion on FG’s move. Highlighting that an asset is not an asset if it does not produce a return, which they do not under the current ownership of the government.
While the President, Nigerian Estate Surveyors and Valuers (NIESV), Emma Wike, agrees with FG on its asset’s sale move, he called for transparency in the process in order to avoid a situation where the assets are sold without the problem being addressed.
He said, “Let us have transparency and openness if the government is to go ahead. They should have included it right from the preparation stage of the budget, to determine how much would be realised.
“There would have been proper valuation according to the Procurement Act so that people could know how much revenue is expected from the sale before the President assented to the budget bill. Anything done after the appropriation bill could become illegal.
“We had the concession of assets during Obasanjo’s regime. If the government has properties that are lying low without being used, the government should be able to sell and use the money realised to fund the budget, it means that it was not in the budget bill and so it is not proper.”
Chairman, Lagos branch, National Institute of Estate Surveyors, NIESV, Dotun Bamigbola explained that if there is no value for the assets, it is important that estate surveyors and valuers are commissioned to carry out the valuation.
However, former Chairman, Estate Surveyors and Valuers Registration Board of Nigeria (ESVARBON), William Oruka Odudu said:
“They have borrowed enough money in the past, which is unnecessary and now they want to sell to political cronies and so it is not wise.
“Buyers could make so much money at the expense of the government. If the National Arts Theatre is sold at a well-valued price, the government could make a lot of money from it. However, it may not be valued before the government sells, and to replace a monument like that will run into trillions of naira.”
What you should know
- The crash in crude oil prices in 2020 and subsequent OPEC cuts have drastically reduced government’s ability to generate revenue. This has left fiscal policy stakeholders no other option but to find more innovative ways to fund the budget and raise capital.
- The Federal Government had stated plans to sell off certain non-oil assets, notably, Integrated Power Plants in Geregu, Omotosho, and Calabar at N434 billion.
- PricewaterhouseCoopers (PwC) recently estimated that Nigeria holds at least $300 billion or as much as $900 billion worth of dead capital in residential real estate and agricultural land alone.
- Finance minister, Zainab Ahmed, had in a recent televised interview argued that the sale of public assets would benefit Nigerians and boost the economy.
- She described certain assets as dead and said that they could be sold to the private sector to be reactivated and put to use for the benefit of Nigerians. She stated: “So, we are looking at different – and I am a member of the National Council on Privatisation – we are looking at different categories of assets that government has not been able to manage, that is lying down and, in some cases, even completely rundown, to cede them off to the private sector.”