Nigerian Government Plans to Sell 36 State-Owned Assets to Supplement Declining Oil Earnings
The privatization agency in Nigerian, Bureau of Public Enterprises, has a plan to either sell off 36 state-owned assets or bring in private investors to manage them. This is part of the last-minute efforts by the Buhari-led government to salvage a serious problem of declining public revenue facing the country due to declining oil earnings.
Alex Okoh who serves as Director General of the Bureau of Public Enterprises, listed two free economic zones in Kano and Calabar as well as some unnamed power generation plants, as among the assets that are up for either sale or concession. He described the power plants as having the capacity to add 3,300 megawatts of electricity to the national grid, even as the economic zones are capable of boosting the country’s export earnings by $2 billion within a 7-year period.
In the meantime, the privatisation agency will collaborate with the World Bank to develop certain projects in order to make them attractive enough to investors. The director of infrastructure and public private partnership at the agency, Amaechi Aloke, said the projects (which include oil and gas, transportation, agriculture, etc) will be readied for presentation during a virtual conference scheduled to hold in September.
Nigeria is in urgent need of funds to supplement its declining public revenue, after oil earnings declined by 49.5% in H1 2021. As you may well know, the country’s economic mainstay is oil. Despite the fact that efforts has been made in recent years to diversify the economy, non-oil revenue in the first half of the year also fell by 24.9% according to disclosures by the Federal Ministry of Finance.
Note that a November 2020 report by Moody’s Investor Services advised that Nigeria needs about $3 trillion worth of investments over the next three decades if it wants to close its infrastructure gap. This is a lot of money to come by. And since oil earnings are currently disappointing, part of the money might as well be gotten by either selling off or better utilising the various assets the country currently owns.
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