The sale of government assets to finance budget

Udoma Udo Udoma

By LakinbofaGoodluck

The government revealed during the budget presentation that it was planning to sell some assets to fund the 2018 budget. The Minister of Budget and National Planning, Udo Udoma, during a public presentation of the 2018 budget proposals stated that the sum of N306 billion would be realised from privatisation and N5b would be realised from sale of government assets. A report by another newspaper indicated that the government will be selling three power plants to generate funds to finance the proposed 2018 budget. The debate to sell or not sell government assets has been on since the start of this administration. There were ripe insinuations of the government’s proposition for the privatisation of the Nigeria Liquefied Natural Gas, NLNG. In actual fact, asset sale was part of the proposal to finance the 2017 budget, but sale did not materialise due to the late constitution of the National Council on Privatisation (NCP).

On the one hand, privatising government assets to ensure efficiency and accrued benefits to the government will always remain a welcomed development. On the other hand, sale of government assets to fund a budget that lack the assurance of full implementation and benefits to the citizenry is not a wanted move. The President indicated during the Nigerian Economic Summit Group that the power privatisation will be reviewed to ensure maximum efficiency. The Minister of State for Budget and National Planning, Zainab Ahmed, who represented the President, said that the move is aimed at opening up the sector for willing investors to bring in renewed capital to make the plants more functional. To that extent, if there will be any sale of power assets, it should be done with a complete review of the whole privatisation process and in a way that is clearly understood by every stakeholder. If there would be assurances that the proceeds from the sale of power assets will be reinvested in other viable capital projects, then it is acceptable to sell. But if the government will sell off assets to fund a budget, and possibly the recurrent aspect of the budget, it will be a shame on the nation. This can be likened to having a young man sell off his father’s property, only to buy assorted food because it is difficult for him to adjust his lifestyle. The food can only serve as a short term survival means for the child, but he would have ended up buying a hopeless future for himself. Wisdom would suggest to the child to reduce his exposure to stupendous lifestyle and focus on the things that will buy him a better future.

More than 50% of our nation’s budget is dedicated to recurrent expenditure and this is largely characterised by frivolous expenses that can be channelled to other things that will benefit the nation. Selling off our assets to finance a budget is not a good way to manage the country. What we need to do is to cut our expenditure on the things that do not matter; we can begin to save money from there. Our power assets are not enough which is why we are still faced with power shortage. A report facilitated by the Mac Arthur Foundation reveals that the country has spent N11trillion into the electricity sector since 1999 yet nothing to show for it, largely due to corruption by public officials and their associates. At the presentation of the report, Mr. Femi Falana also insinuated that privatisation of public assets has resulted in a fraudulent transfer to private individuals because the assets are sold to cronies of government officials.

Judging by previous experiences, the assets might be sold at a rate that is ridiculously below their actual worth, or they are sold to entities that do not possess the capacity to turn them around. In any instance, the country will still bear the consequences. The inefficiency will reflect in power supply in the country and affect the industrial growth of the economy. The reality before us is that we need more private investment in the power sector; the government needs companies that will manage the existing assets while they also make fresh investments. Rather than sell the assets, the government should focus more on public-private partnership that has been successfully applied in the oil and gas sector and other sectors of the economy. Ultimately, selling off assets to finance a budget that has all trappings of failure is not a good way to manage the country’s assets. This budget is proposed for a year with increased electioneering activities; our politicians will be more focused on winning elections and delivering their constituencies than ensuring the implementation of a budget. Let us cut down our expenses rather sell assets to finance our ostentatious lifestyle as a nation. 

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