FG’s Plan To Raise N434bn From Asset Sale Too Low To Address Budget Deficit-Cowry Asset CEO

Federal Government’s plan to raise over N434bn by 2021 from the sale of state assets to support the country’s revenue shortfall will only be a drop in the ocean, as huge revenue deficits clamps on Africa’s largest economy, the Chief Executive Officer, Cowry Assets Management, Johnson Chukwu, has said.

Chukwu made this position on Tuesday on Arise Xchange, while discussing issues surrounding the planned privatisation of the state assets.

Nigeria recently concluded arrangements to sell Omotosho, Geregu and Calabar power plants for N434bn by next year, while the National Stadium, Lagos Moshood Abiola Stadium and the Jos International Stadium and Adokiye Amiesimaka Stadium Port Harcourt for N100mn by 2021.

Chukwu said, “To some extent, they will go to cushion the deficit that the government is facing in terms of budgetary position.

“But trying to raise about N434bn will be a drop in the ocean compared to the level of budget deficit the country is already facing today.”

Africa’s economic power house is facing a budget deficit projected to be N5.19trn, from an estimated spending of N13.08trn in 2021. But the expert said, selling the assets “won’t solve the problem.”

Amidst Nigeria’s revenue decline, Chukwu said the government needs to eliminate the overlapping functions in the different Ministries Departments and Agencies.

While lamenting the huge duplication in spending, the expert said the cost of those duplications are so burdensome on Nigeria’s declining revenue.

The Cowry Asset CEO noted that moribund institutions where the government pays salaries to employees needs to be eliminated to ease fiscal burdens on the country’s treasury.

“If an organisation has become moribund, why would you have a huge wage bill on those organisations and then that will continue to burden the national treasury,” said the Cowry Asset chief.

According to the expert, the steps would aid the government’s plan to raise funds from sale of state owned assets.

Chukwu said all state enterprises in the country are leakages to the national treasure except the Nigerian LNG Limited, a company where the government is only an equity holder.