Buhari Govt Confirms Plans to Sell Govt Properties to Fund 2021 Budget

The finance minister confirmed the decision to sell some government properties in a document submitted to lawmakers.

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Buhari Govt Confirms Plans to Sell Govt Properties to Fund 2021 Budget
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Buhari Govt Confirms Plans to Sell Govt Properties to Fund 2021 Budget:

The federal government has stated, in addition to its intention to engage in domestic and foreign borrowing to finance the 2021 budget, that it will also sell some government-owned assets for the same reason.

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The government also said that it would sell some non-oil properties in order to act as an alternative source of funding for the budget for the year.

This is contained in a presentation to stakeholders on the signed 2021 budget by the finance minister, Zainab Ahmed, made in Abuja on Tuesday.

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The presentation, entitled ‘2021 FGN Approved Budget Public Presentation, Breakdown and Highlights,’ was dated January 12.

The N13.58 trillion budget for the 2021 fiscal year was signed by President Muhammadu Buhari on December 31, 2020, around N505 billion higher than the budget presented in October 2020.

Buhari Govt Confirms Plans to Sell Govt Properties to Fund 2021 Budget

Around N496.5 billion was approved for legislative transfers in the approved budget and N3.3 trillion was approved for debt services.

Recurring expenditure was set at N5.6 trillion, with N4.1 trillion in capital expenditure and N5.2 trillion in fiscal deficit (5,196,007,992,292).

Already, many have condemned the consistent determination of the federal government to borrow annually to finance budgets. The government will borrow N5.6 trillion from domestic and foreign capital for the current year. For the 2021 budget, the number is the overall deficit.

This accounts for 3.93 per cent of the GDP.

According to the Ministry of Finance, the paper outlined how the deficit will be financed.

Nigeria will borrow money from the World Bank, the Islamic Development Bank and countries such as Brazil to finance the budget, both the president and Ms. Zainab said.

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Besides the loans…

According to the text, the sale and concession of government-owned properties and non-oil assets is another way by which the government plans to finance the budget.

Under the “additional financing” section of the study, “Sales of government property” and “non-oil asset sales” were listed. An summary of how the deficit will be funded is seen in this section.

While the document did not state the companies that were put up for sale, nor did it state the estimated revenue from the sales, this confirms previous speculations about the government’s decision to sell those assets.

The Senate Privatization Committee said in November 2020 that it was not aware of the government’s intention to sell or grant such national properties through the Public Enterprise Bureau (BPE). This was during the 2021 budget defence session of the department.

Documents submitted to the committee revealed proposals by the federal government to sell the Integrated Power Plants in Geregu, Omotosho, and Calabar at N434 billion in 2021.

 

The National Arts Theatre, Tafawa Balewa Square, and all the River Basin Development Authorities were also planned to grant N836 million in the paper, while the National Stadium in Lagos, the Moshood Abiola Stadium, Abuja, and two others were pegged at N100 million for concession.

The committee chairman, Theodore Orji, said the panel was not aware of the scheduled transactions. He also complained that Alex Okoh, the Director General of BPE, “refused to bring along the members of the panel.”

“The panel’s clerk, Sadia Abdullahi, told newsmen Wedneaday when contacted, however, that the “matter had been resolved.

She reported that Mr. Okoh had again appeared before the panel with a view to submitting the required documents containing the list of national properties for sale or concession and their prices. She also claimed that both the committee, the BPE and the federal government are all on the same page now.

The federal government also plans to fund the year’s budget by “Borrowing from Special Accounts,” in addition to selling off national assets.

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Although no sum was specified for this reason, many assume that, as previously reported, it is the government’s intention to borrow money from dormant accounts.

Ms Ahmed revealed that around N850 billion of unclaimed dividends and dormant bank deposits are being targeted by the government.

The government will also fund the budget by proceeds from the privatisation of some public properties of N205.1 billion.

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Multilateral/Bi-lateral Project-tied loans pegged at N709.68 billion and N4.7 trillion’ New Borrowings’ (N4,686,775,885,696) involving borrowing from N2.34 trillion domestic and N2.34 trillion international sources are other ways.

The government also hopes to fund the budget from its oil revenue share-N2.01 trillion, NLNG dividend-N208.5 billion, N2.65 billion for minerals and mining, and N1.48 trillion for non-oil.

Others include Business Income Tax (CIT)-N681.7 billion, Value Added Tax (VAT)-N238.4 billion, N508.2 billion in customs and N60.5 billion in Federation Account levies.

The Minister claimed that N7.97 trillion is sufficient to finance the budget for 2021.

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