Nigeria wants to sell  or lease some non-oil assets to fund the 2021 budget. This should not be surprising as I noted that by 2025, Nigeria will sell some university campuses to fund its bloated budgets.

The federal government has confirmed it plans to sell off some non-oil assets of the Federation to fund the 2021 budget. Finance Minister, Zainab Ahmed, made this known to stakeholders in a budget presentation made in Abuja this week.

The document of the presentation, titled, ‘Public Presentation of 2021 FGN Approved Budget – Breakdown and Highlights’ dated Jan. 12 was obtained by Premium Times.

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Government’s recent move to borrow funds from unclaimed dividends and dormant bank accounts also underscores its search for sources to borrow from. Ms. Ahmed said that the government is targeting about N850 billion from unclaimed dividends and dormant bank deposits.

Government’s plan to sell and lease assets comes at a time when its habit of borrowing to fund the budget has been repeatedly condemned.

The document said the government intends to fund the budget by selling and concessioning government-owned properties and non-oil assets.

Although the document does not specify the assets the government is considering to sell, Premium Times report noted an earlier event indicating some of the assets.

The fact is this: Nigeria is a poorly run entity and I am not saying this because I have better ideas. I am simply reporting a statement of facts. When the cost of your capital is 60% of your revenue, your future as an entity is not certain.

Nigeria can sell everything, collect pension funds, borrow dividend funds, pick dormant bank balances, tax remittance, etc, but the outlook will not change until it reforms its economic architecture. We have no incentives for intra-competition across state lines and we do not reward hard work in the ways we compensate states. So, at the end, everyone is doing siddon-look with no inventiveness.

People, it is a big yard sale – and everything is discounted. Check here and see if some items will appeal to you.

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Nigerian 2021 Budget (N13.58 trn) – Deficit, Financing and Critical Ratios

President Muhammadu Buhari had on December 31, 2020, signed the N13.58 trillion budget for the 2021 fiscal year – about N505 billion higher than the budget proposed in October, 2020.

In the approved budget, about N496.5 billion was approved for statutory transfers and N3.3 trillion was approved for debt services. The recurrent expenditure was put at N5.6 trillion with capital expenditure at N4.1 trillion and fiscal deficit at N5.2 trillion (5,196,007,992,292).

The overall budget deficit is N5.60trn for 2021, which represents 3.93% of the country’s GDP, and it’s to be financed mainly by borrowings:
-Domestic sources – N2.34trn
-Foreign sources – N2.34trn
-Multi-lateral/bi-lateral loan drowdowns- N709.69bn
-Privatisation proceeds – N205.15bn

With about N7.97 trillion is available to fund the 2021 budget as stated by the finance minister

Nigerian Government Confirms Plan to Sell/Lease National Assets to Fund 2021 Budget

The federal government has confirmed it plans to sell off some non-oil assets of the Federation to fund the 2021 budget. Finance Minister, Zainab Ahmed, made this known to stakeholders in a budget presentation made in Abuja this week.

The document of the presentation, titled, ‘Public Presentation of 2021 FGN Approved Budget – Breakdown and Highlights’ dated Jan. 12 was obtained by Premium Times.

President Buhari presented the appropriation bill of N13.082 billion to the National Assembly in October, but it was increased by N505.61 billion to the total amount of N13.588 trillion which he signed into law in December.

A breakdown of the budget shows that recurrent expenditure will gulp N5.64 trillion, capital expenditure N4.125 trillion, debt servicing N3.324 trillion and statutory transfer N496.528 trillion.

Consequently, the approved budget was greeted with criticism as the federal government said it plans to engage in foreign and domestic borrowing to fund it. Ms. Ahmed said there is only about N7.97 trillion available to finance the budget.

The federal government said it would borrow N5.6 trillion from domestic and foreign sources to make up the total deficit of the 2021 budget. Ms. Zainab disclosed that Nigeria will borrow money from the World Bank, the Islamic Development Bank and countries like Brazil to finance the budget.

Government’s recent move to borrow funds from unclaimed dividends and dormant bank accounts also underscores its search for sources to borrow from. Ms. Ahmed said that the government is targeting about N850 billion from unclaimed dividends and dormant bank deposits.

Government’s plan to sell and lease assets comes at a time when its habit of borrowing to fund the budget has been repeatedly condemned.

The document said the government intends to fund the budget by selling and concessioning government-owned properties and non-oil assets.

Although the document does not specify the assets the government is considering to sell, Premium Times report noted an earlier event indicating some of the assets.

In November 2020, the Senate Committee on privatization headed by Senator Theodore Orji was presented with documents which show plans by the government to sell off some properties and assets of the federal government. Some of the assets include the Integrated Power Plants in Geregu, Omotosho, and Calabar, designated to be sold for N434 billion in 2021.

The documents also revealed plans to concession the National Arts Theatre, Tafawa Balewa Square, and all the River Basin Development Authorities at N836 million while National stadium in Lagos, the Moshood Abiola Stadium, Abuja, and two others were to be leased for N100 million.

The dispute between the Senate Committee on Privatization and the federal government has also been settled. The Committee said during the 2021 budget defense in November that it was not aware of the government’s plan to sell or concession some assets through the Bureau of Public Enterprise (BPE), and the chairman Orji said the BPE Director General Alex Okoh has refused to carry them along. The Clerk of the panel Sadia Abdullahi told Premium Times that the issue has been resolved.

She explained that Okoh reappeared before the panel to submit the necessary documents containing the list of national properties that are up for sale or concessioning as well as their prices. Ms. Abdullahi added that the committee, the BPE and the federal government are now all on the same page.

Apart from the plan to sell and lease assets, the government is also considering borrowing from special accounts. Last year, the federal government was seeking approval from the National Assembly to borrow from the pension fund, and it seems the plan is still alive as budget deficit remains a challenge in 2021.

Other means the government plans to use to finance the budget include the privatization of some public assets at N205.1 billion.

There are also Multilateral/Bilateral project-tied Loans put at N709.68 billion and New Borrowings of N4.7 trillion that involves N2.34 trillion domestic borrowing and N2.34 trillion foreign borrowing.

The government also plans to use N2.01 trillion share of oil revenue, N208.5 billion of NLNG Dividend, N2.65 billion from Mineral and Mining and N1.48 trillion non-oil revenue to fund the budget.

Apart from these, the government is counting on Company Income Tax (CIT) to generate N681.7 billion, Valued Added Tax (VAT), N238.4 billion, Customs N508.2 billion and Federation Account levies N60.5 billion to finance the budget.

Get ready for LaCasera, a famous drink for active and moving people across West Africa. Yes, the Group Marketing Director of Jotna (the LaCasera Company), Emmanuel Agu. FNIMN, FIMC, FIPMA, MSC, MBA, Ashridge Alumnus, a Tekedia Institute Faculty, will teach a course – Effective Consumer Marketing in the FMCGs industry.

But you may read in the Board – The Ten Commandments of FMCGs Marketing. Mr. Agu is a veteran of FMCGs world; he ran marketing and portfolio desks in Guinness, Heineken and others. They’ve called him the sage for knowing what moves markets and how to get users to open the bottles!

To all SMEs, startups and players in the FMCGs, you cannot miss this course. It is scheduled for Week 8 of Tekedia Mini-MBA which begins Feb 8.

I have a 76-page document here which in my opinion is the best work I have ever seen in this industry for Africa. You will have it as part of the course. BEGIN and register here.

Welcome Sage Grey Finance Limited to Tekedia Institute; we are excited to be co-learning with you over the next few months. Sage Grey Finance Limited is a finance services company incorporated in Nigeria. It is licensed and regulated by the Central Bank of Nigeria (CBN). It offers Corporate Finance, Project Finance, Advisory, Securitisation, Asset Finance and other services as authorised by the Central Bank of Nigeria.

Sage Grey Finance Limited is incorporated in Nigeria and we operate from Nigeria while maintaining an International Outlook, expertise and network. We are licenced and regulated by the Central Bank of Nigeria (CBN). Our Team has extensive multinational and multi cultural financial services experience which is being leveraged to ensure that we offer the best services which are not only consistent with Nigerian and African expectations, regulations and landscape; but are consistent with world best practices.

Welcome to the Institute. Together, we build a greater continent.

We onboarded  a special partner today.  The client, a midsize microfinance bank, has outsourced its business training school to Tekedia Institute. We are very thankful because now its workers will learn of things happening in Lagos, and not just esoteric cases in New York and London via training packages developed somewhere in New York with no relationship to the business climate in Nigeria. 

And the fun part: all the Executive Directors are now faculty along with the CEO in their School@Tekedia Institute. We worked with them to develop their courses and maintained that if they want the mission to work, they need to teach the team. The time of outsourcing to London and New York via mass training packages is over! 

I want to speak with you on how to bring a part of your company training program into Tekedia Institute. Outsource it to us; the courseware will be uniquely designed and developed for your needs. There will be a timetable with HR when the team members will be going for training. 

The way to learn has changed; adapt and thrive. Contact my team today.