The Minister of Finance, Kemi Adeosun, has backed calls for the sale of some national assets to raise funds to reflate the economy out of recession, saying the move will reduce government borrowing.
There has been a raging debate over the proposal to sell off some national assets to revive the country’s ailing economy.
The proposal to sell some national assets was first mulled by the National Economic Council (NEC), the highest economic decision-making body, which is chaired by Vice President Yemi Osinbajo last week, and since then, some prominent Nigerians, among them, Africa’s richest man, Aliko Dangote; Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, and the Senate President, Bukola Saraki, have spoken out in support of the idea.
They argue that the funds to be raised from selling some of the country’s assets will be used to reflate the economy, reopen factories and put money in people’s pockets.
But the Nigerian Labour Congress (NLC), the Trade Union Congress (TUC) as well as many Nigerians opposed the proposal, describing it as a threat to the economic independence of the country.
Contributing to the debate, which has been on the front-burner since last week, Adeosun, during a meeting with business editors of some national dailies in Abuja over the weekend, said the federal government, after undertaking a medium term expenditure framework and debt strategy, discovered that the country can no longer rely on borrowing to finance infrastructure development as a result of its accumulated deficit.
“The infrastructure challenges we face are so serious and the kind of money that we need, we can’t borrow because when you have an accumulated deficit, you need to look for the money that will sustain what you are doing for the next three to four years. So, that is what we are looking at and having a more strategic approach so that, over time, we will borrow less, which, of course, is good in the long run”, said the minister.
While answering questions on the suitability of selling off some national assets when some that had been sold in the past had not been properly managed, she said: “I think there are lots of assets being considered. There are some unused assets that are just lying idle and people have come and said, ‘These things you are not using, can we lease it from you?’
“I think when you are looking for money, some things that government is sitting on, we don’t have money to do them and so it makes sense for me to unlock those things as it will bring money to the economy at these difficult times so that we can move forward.
“I don’t think we have got to the stage where we say it’s this or that asset. The conversation now should be: should we just keep borrowing, or now that things have got to this stage, we should start to dislodge some under-utilized assets. And it’s not exclusive to us: Saudi Arabia is selling some of its oil assets. So if you sell an asset and use it to finance another asset which is going to give you more, then I don’t have a problem with that”.
Adeosun also disclosed that there are some assets that can be leased out and there are some which may need to divest.
“The investor will need to look at the risk and pricing accordingly. We can sell to the Nigerian people or the pension fund and you can also list these assets on the stock exchange. So there are different types of sales”, she explained.