Nigeria moves to sell gov’t properties to fund 2021 budget

Apart from its plan to engage in domestic and foreign borrowings to fund the 2021 budget, the federal government has confirmed that it will also sell some government-owned properties for the same purpose.

The government also said it will sell some non-oil assets to serve as additional source of finance for the year’s budget.

This is contained in a Tuesday presentation made in Abuja by the finance minister, Zainab Ahmed, to stakeholders about the signed 2021 budget. Peoples Mail obtained a copy of the presentation.

The presentation, titled, ‘Public Presentation of 2021 FGN Approved Budget – Breakdown and Highlights’ was dated January 12.

President Muhammadu Buhari had on December 31, 2020, signed the N13.58 trillion budget for the 2021 fiscal year – about N505 billion higher than the budget proposed in October, 2020.

The recurrent expenditure was put at N5.6 trillion with capital expenditure at N4.1 trillion and fiscal deficit at N5.2 trillion (5,196,007,992,292).

Already, many have condemned the federal government’s consistent resolve to borrow to fund budgets annually. For this year, the government is to borrow N5.6 trillion from domestic and foreign resources. The amount being the total deficit for the 2021 budget.

This represents 3.93 per cent of the GDP.

This paper had reported how the deficit will be financed, according to the ministry of finance.

Both the president and Ms Zainab had said Nigeria will borrow money from the World Bank, the Islamic Development Bank and countries like Brazil to fund the budget.

Besides borrowings…

According to the document, another means by which the government intends to fund the budget is by selling and concessioning government-owned properties and non-oil assets.

“Sales of government property” and “non-oil asset sales” were listed under the “additional financing” section of the document. This section shows an overview of how the deficit will be financed.

Although the document did not state the companies that have been put up for sale, neither did it state the expected revenue from the sales, this confirms earlier speculations of the government’s plan to sell off some properties.

In November 2020, the Senate committee on privatisation said it was not aware of the government’s plan to sell or concession some national properties through the Bureau of Public Enterprise (BPE). This was during the agency’s 2021 budget defence session.

Documents presented to the committee showed plans by the federal government to sell the Integrated Power Plants in Geregu, Omotosho, and Calabar at N434 billion in 2021.

Also in the document were plans to concession the National Arts Theatre, Tafawa Balewa Square, and all the River Basin Development Authorities at N836 million while the National Stadium in Lagos, the Moshood Abiola Stadium, Abuja, and two others were pegged for concessioning at N100 million.

The chairman of the committee, Theodore Orji, had said the panel was not aware of the planned transactions. He also complained that the Director General of BPE, Alex Okoh, “refused to carry members of the panel along”.

Additional financing

Besides selling off national assets, the federal government also intends to finance the year’s budget through “Borrowing from Special Accounts.”

Although no amount was stated for this purpose, many believe it is the government’s plan to borrow money from dormant accounts, as announced earlier.

Ms Ahmed had disclosed that the government is targeting about N850 billion from unclaimed dividends and dormant bank deposits.

The government will also finance the budget through proceeds from privatisation of some public assets which has been put at N205.1 billion.

Other means are Multilateral/Bi-lateral Project-tied Loans pegged at N709.68 billion and ‘New Borrowings’ of N4.7 trillion (N4,686,775,885,696) which includes borrowing from domestic sources of N2.34 trillion and from foreign sources of N2.34 trillion)

The government also hopes to finance the budget from its share of oil revenue- N2.01 trillion, NLNG Dividend – N208.5 billion, Minerals and Mining N2.65 billion and non-oil at N1.48 trillion.

Others are Company Income Tax (CIT) – N681.7 billion, Valued Added Tax (VAT)-N238.4 billion, Customs – N508.2 billion and Federation Account levies at N60.5 billion.

The minister said about N7.97 trillion is available to fund the 2021 budget.