The last may
not have been heard of the controversial asset sales as Bloomberg quoted a
Federal Ministry of budget document it saw this week to have indicated that
government hopes to generate as much as $16.4 billion through asset sales in the
next four years to reduce the burden on the public budget.
The sales it
was disclosed will help to tackle inefficiencies and stem “corruption in public
enterprises,” which outlines the country’s plans for economic recovery from
2017 to 2020. President Muhammadu Buhari will introduce the proposal on an
unspecified date this month. It didn’t name the assets it may sell.
Government
estimates that the economy contracted 1.5 per cent in 2016, partly because of a
decline in the price and output of oil, the country’s biggest export and
revenue generator. President Buhari proposed a 20 per cent increase in this
year’s budget to stimulate the economy and help gross domestic product expand
by an average of 4.7 per cent annually over four years and reach 7 per cent in
2020.
“They could
look at reducing government stakes in oil joint ventures from around 55 per
cent to 40 per cent or 45 per cent — that alone can generate over $10 billion,”
Pabina Yinkere, the Lagos-based head of research at Vetiva Capital Management
Ltd., said by phone.
“Non-oil
assets like concession airports are a more difficult sale because they would
involve a lot of transactions.” The government targets oil production of 2.5
million barrels a day by 2020 to boost export earnings, it said in the
document. Output declined to an almost three-decade low of 1.4 million barrels
a day in August after militants in the Niger River delta region bombed
pipelines to demand more benefits from the resource.
Source:
Financial Watch
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