BEVERLY HILLS, January 24, (THEWILL) – As the debate on how best the federal government can finance the funding gap in the 2021 budget, without creating more economic problems than it plans to solve rages, some stakeholders in both public and private sectors have thrown their weight behind the plan to sell some national assets.
According to them, selling some national assets to fund the budget deficit is a way of giving out assets that are wasting away or assets that the government can no longer manage well to people in the private sector who can put them into more economic use.
President Muhammadu Buhari had late last year signed the 2021 budget of N13.5trn into law, with projected revenue of N7.89 trillion and a plan to fund the N5.39 trillion deficit through borrowing and privatisation proceeds.
“The deficit will be financed mainly by new borrowings totalling N4.28 trillion, N205.15 billion from Privatization Proceeds and N709.69 billion in drawdowns on multilateral and bilateral loans secured for specific projects and programmes,” Buhari had told a joint session of the National Assembly.
However, this has continued to elicit controversies among economic experts and Nigerians from all walks of life.
Making a case for privatisation, the Director-General, Lagos Chamber of Commerce and Industry, Dr Muda Yusuf, observed that the process is not new as the nation had done it in the past, though at different degrees of successes and failures.
Speaking on ‘Early Rush Show’, a live breakfast programme of STAR FM monitored by our correspondent, Yusuf described privatisation as a way of putting valuable public assets which are wasting away into better economic use by handing them over to the private sector either by concession or outright sale, pointing out that N205 billion out of a budget of N13 trillion is just about 1.5 percent.
Yusuf said: “Sale of assets is not new. It is something we have done in the past – some we got right; some we did not quite get right. When you privatize, there is some revenue that comes in. You can privatize either by outright sale or by concession.
“All of these are ways of giving out assets that are wasting away or assets that you can no longer manage well as government to somebody who can put them into more economic use.
“Take for instance, things like the former Federal Secretariat in Ikoyi, which has been rotting away now for about 5 years or more. Go there now you see miscreants and all of that. Go to the former National Assembly Complex, former Defence Building. These are valuable assets sitting on premium land. They are wasting away.
“Rather than allow them to be rotting away, there is nothing wrong if you either partner with the private sector to manage it and make better use of it, make better accommodation, employ people and all of that or you sell it outright.
“So, the component of privatization in the budget is N205 billion; N205 billion out of a budget of N13 trillion is just about 1.5 percent. When you talk as if the government is broke and the only thing to fund the budget with is selling of assets, that may give a wrong impression.”
Similarly, the member representing Oriade/Obokun federal constituency in Osun State, Honourable Wole Oke has defended the planned sale of some national assets to fund the budget deficit, arguing that it is not a new development.
Speaking on Channels Television’s ‘Politics Today’, the lawmaker said “The issue of the sale of assets is not new. Even in the previous budgets, there have always been other sources of revenue and the sale of assets is one of such.”
Arguing that some of the national assets that are being planned for sale to fund the budget are already liabilities, the lawmaker insisted that it is better for these assets to be run by private individuals instead of the government.
“But the critical issue we need to look at is: ‘What assets are we selling?’ Some assets are already liabilities, so what are we keeping them for? That is my humble opinion.”
While buttressing his point, he said a look at the various sectors of the Nigerian economy indicates that the government cannot run businesses effectively.
“Which business has the government ran and ran it very well?”, he asked, stating that national assets that are idle need to be deployed productively by the Federal Government.
He said that apart from the government being a bad business manager, Section 16 of the Nigerian Constitution backs the federal government to deploy national assets when they are not performing well.
Meanwhile, the Socio-Economic Rights and Accountability Project (SERAP) has asked the National Assembly to stop President Buhari from selling government properties to fund the 2021 budget.
SERAP, through a statement issued earlier by its deputy director, Kolawole Oluwadare, appealed to the Senate President, Ahmad Lawan, and the Speaker of House of Representatives, Femi Gbajabiamila to bar the President from carrying out such moves via a letter addressed on January 16.
“The National Assembly has a constitutional and oversight responsibility to protect valuable public properties and to ensure responsible budget spending. Allowing the government to sell public properties, and to enjoy almost absolute discretion to borrow to fund the 2021 budget would amount to a fundamental breach of constitutional and fiduciary duties,” SERAP stated.
While cautioning that selling valuable public properties to fund the 2021 budget would be counter-productive, the group said “this would be vulnerable to corruption and mismanagement. It would 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.”
But when contacted, a public affairs commentator, Barr Tunji Abdulaammed, does not think SERAP has a case. He says there is no law that prevents the government from selling assets that belong to it if it follows procedures laid down by the law.
“I am not aware of any law which prevents the federal government from selling its assets”, Abdullammed said.
“What I am aware of is the law which provides the guidelines, the procedure to be followed in doing that. As much as it is confirmed that the asset belongs to the government, just like an individual, the government has the right to sell its assets at will.
“However, it must be transparent; it must be in line with the procedures laid down by the law. Those are the only restrictions I know.”