In the quest to reduce the burden on the nation’s budget, the Federal Government has planned to generate up to $16.4 billion through sales of national assets in the next four years.
This was written in a document obtained from the Ministry of National Planning which listed Nigeria’s strategy for economic reform from 2017 to 2020. The document disclosed that selling the unnamed asset will help tackle inefficiencies and stifle corruption in public enterprises.
It is recalled that the senate rejected the proposal to sell national assets due to its incredibility in boosting the economy. But they also hinted that it could only be adopted based re-purchase clause.
President Muhammadu Buhari is expected to present the proposal later this month. According to the report, Nigeria estimates its economy contracted 1.5 percent in 2016, partly because of a decline in the price and output of oil, the country’s biggest export and revenue generator.
The proposal bothers on a 20 percent increase in 2017 budget stimulate the economy and help gross domestic product expand by an average of 4.7 percent annually over four years and reach 7 percent in 2020. Head of Research at Vetiva Capital Management Ltd., Pabina Yinkere, suggested that Nigeria could look at reducing government stakes in oil joint ventures from around 55 percent to 40 percent or 45 percent.
Yinkere believes this alone can generate over $10 billion. He pointed that non-oil national assets like the concession of airports are a more difficult to sell because they would involve a lot of transactions.
More so, the government has targets oil production of 2.5 million barrels a day by 2020 to boost export earnings. As a result of the incessant bombing of oil pipelines by militants in the Niger Delta to demand more benefits from the resource, output has declined to an almost three-decade low of 1.4 million barrels per day in August 2016.
FG is said to have developed 59 strategies for implementation to achieve the strategic objectives of the Economic Recovery Growth Plan that will be launched in the next few weeks. Written in the document are twelve strategies that have been prioritized based on their importance to the success of the government recovery plan and it currently awaits Federal Executive Council’s endorsement.
Sources working on the documented sale of nation’s asset said the plan would accelerate non-oil revenue generation through expanding the tax base, blocking leakages in tax avoidance and non-payment. The plan is expected to drastically cut cost and align monetary and fiscal policies. Huge finance will be spent to expanded “critical infrastructure” including power, roads and railway, during the planned period.
Another strategy in the recovery plan is government’s intention to revamp the four existing refineries to ensure local supply of petroleum products in order to conserve foreign exchange. It is also stated in the document that government intend to expand its social investment and deliver on agricultural transformation.