President Muhammadu Buhari to sell refineries
The Nigerian government is proposing that no less than 36 of its assets be sold or concessioned in order to collect funds, primarily to finance the 2021 budget.
These properties are spread across sectors of electricity, manufacturing, connectivity and infrastructure.
It is anticipated that they will be sold or approved between January 2021 and November 2022.
This is found in a paper which was accessed exclusively through PREMIUM TIMES.
The document was submitted by the Executive to the National Assembly and titled “NCP Approved 2021 Work Plan.” It shows the names of the “projects” (as defined in the document), the sales strategy, the phase length and the cost of the assets.
The Abuja Environmental Protection Board (AEPB), the Abuja International Conference Centre (ICC), some unidentified refineries, the Nigerian Transmission Company (TCN), the Abuja Water Board, and the Nigerian Film Corporation, among others, are among the top properties.
The decision of the federal government to sell or concession these assets is to help finance President Muhammadu Buhari’s signed on December 31, 2020 N13.58 trillion 2021 budget.
However, numerous sales techniques for the properties are available. While some are ‘main sales of investors,’ some others are for ‘share sales.’ Others are for ‘concessioning’ and some are for ‘full or partial promotion.’
Some properties have been enlisted to a ‘willing bidder’ to be sold.
A main selling by an investor is the transition from the government to new private owners of at least 51% equity in a company, followed by management control. According to the Bureau of Public Enterprise (BPE), the core investor may be individuals or businesses, Nigerian or international, with the resources required to buy and run the business and the technological and managerial ability necessary to ensure that the business is profitable.
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Similarly, a concession is a form of Public-Private Partnership (PPP) where a government-owned asset is being operated and maintained by a private investor for a period of time on terms contained in a concession agreement.
Breakdown of properties and prices
The 36 projects have been categorised into five departments, according to the document; energy with nine projects, industries and communications department with eight projects and development institutions and natural resources with six projects.
Others are infrastructure and public private partnership with four projects and post transaction management department with nine projects.
Below is a summary of some projects:
|SUMMARY OF PROPERTIES & PRICES|
SUMMARY OF PROPERTIES & PRICES
|PROPERTY||SALE STRATEGY||DURATION||COST (N)|
|Yola Electricity Distribution Company||Core Investor Sale||11 months||245 million|
|Conclusion of Afam Power & Afam Three Fast Power Limited||Core Investor Sale||12 months||NA|
|Mineral House Lagos||Asset Sale||3 months||5.5 million|
|Geregu Power (20% Shareholding Sale)||Willing Buyer – Willing Seller||7 months||20 million|
|Zungeru HydroPower||Concession||19 months||423 million|
|Transmission Company of Nigeria||Concession||NA||NA|
|NIPP||Core Investor Sale||NA||1.26 billion|
|Refineries||Core Investor Sale||NA||NA|
|NIPOST Restructuring/Modernisation||Reform/Restructuring||7 months||40 million|
|Nigerian Film Corporation||Commercialisation||13 months||25 million|
|AEPB||Concession||16 months||124.4 million|
|Nigerian Hotels (in-liquidation)||Resolution of Residual Issues||5 months||2.4 million|
|NITEL/MTEL Residual Issues||Resolution of Residual Issues||12 months||10 million|
|Abuja Water Board||Commercialisation||17 months||25 million|
|FG’s Shares in Sales Sugar Company||Share Sale||6 months||40 million|
|ICC||Concession||12 months||30 million|
|River Basin Development Authorities||Commercialisation/Concession||14 months||44.3 million|
|Tafawa Balewa Square||Concession||7 months||40 million|
|Lagos Intl Trade Fair Complex||Concession||13 months||43 million|
|Restructuring of FMBN/FHA||Restructuring||11 months||150 million|
|Bank of Agriculture||Restructuring/Recapitalisation||38 months||11.5 million|
|Nigeria Commodity Exchange||Restructuring/Recapitalisation||39 months||10 million|
|Evaluation of DISCOs & GENCOs||NA||12 months||10 million|
|Evaluation of Ports||NA||12 months||15 million|
|Resolution of Labour Issues||NA||12 months||25 million|
The first hint of sale or concessioning of some properties came to the fore during the BPE’s budget defence session in November 2020.
Although documents presented to the Senate committee on privatisation by the BPE showed plans by the federal government to sell the Integrated Power Plants in Geregu, Omotosho, and Calabar at N434 billion in 2021, among others, the panel said it was not aware of the plan to sell or concession the properties.
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The chairman of the committee, Theodore Orji, had said the panel was not aware of the planned transactions and complained that the Director General of BPE, Alex Okoh, “refused to carry members of the panel along.”
However, weeks later, the same panel confirmed that some properties will be sold or concessioned. This was after the panel and the BPE “resolved” the matter.
The federal government also made this confirmation when the finance minister, Zainab Ahmed, presented a breakdown and highlights of the budget to stakeholders weeks after.
She had said in addition to selling or concessioning some national properties, the government will also engage in foreign and domestic borrowings as additional source of finance for the year’s budget.
Already, the process has begun for the concessioning of four properties; the Tafawa Balewa Square, Lagos International Trade Fair Complex, and the Calabar and Kano Special Economic Zones.
Many, both individuals and civic groups, have kicked against the government’s plan to sell off some national properties. This is even as they kicked against the idea of borrowing as well.
One of the latest opposition is the Socio-Economic Rights and Accountability Project (SERAP).
The group has written to the National Assembly asking it to stop the president from selling off national properties – an act which it said would amount to a fundamental breach of constitutional and fiduciary duties.
Rather than sell national properties or borrow, SERAP proposed a cut in the cost of governance in areas like lawmakers’ salaries, constituency allowance, wardrobe allowance, recess allowance and entertainment allowance – to help generate revenue.
Describing the sale plan as counter-productive, the organisation said the process would be vulnerable to corruption and mismanagement, undermine the social contract with Nigerians, leave the government worse off and hurt the country in the long run. It is neither necessary nor in the public interest.
Credit : Premium Times
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