BIG STORY

Budget Deficit: Government May Sell TBS, NIPPs, 25 Key Assets

Published

2 years ago

October 21, 2022

Amid Nigeria’s fiscal crisis, the Federal Government is compiling the list of assets that will be either sold or ‘concessioned’ to fund the 2023 budget deficit of N10.7tn.

According to The Punch, sources at the Ministry of Finance, Budget and National Planning said that the government was considering selling or concessioning the Tafawa Balewa Square in Lagos as well as all the National Integrated Power Projects in Olorunsogo, Calabar II, Benin (located at Ihorbor), Omotosho II and Geregu II plants.

The government is also planning to sell or concession all the hydro power plants across the country, including Oyan, Lower Usuma, Katsina-Ala and Giri plants.

More than 25 of such projects will be turned into active assets that will be generating money in some ways to the Federal Government.

Some of them will be offered to investors for equity while others will be totally sold to reduce waste.

The government is also eyeing revenue from Calabar and Kano free zones as well as Abuja Water Board, Aluminium Smelter Company of Nigeria, National Film Corporation, National Theatre and Lagos International Trade Fair.

The government is also planning to relinquish the ownership of some of the basin authorities and hand them over to the private sector to manage.

However, sources said they could either be sold or concessioned, depending on the preference of the core investors.

Some of the government ministries such as the postal service will be concessioned or entirely sold to the private sector to enable them to compete effectively with other privately- managed logistics firms.

It was also gathered that the Federal Government was seeking ways of enhancing the value of the Nigerian National Petroleum Corporation by listing it in the stock market to raise capital as was done the case with Saudi Aramco.

Saudi’s state-owned oil company went out to raise $25.6bn from an IPO in 2019, surpassing Alibaba’s $25bn valuation five years earlier.

The now commercial enterprise is valued between N30tn and N50tn, and the government is planning to make it a veritable source of revenue and returns for the government and the shareholders next year.

“This government may not benefit from the sale of these assets. It is a little bit late but the plan is to ensure we make all those dead assets alive. Let us cut wastes at least,” one of our sources said.

Sources further said that the Federal Government will extend its tentacles to hotels and landed properties, especially those that could be described as dead capital, to raise money.

A reliable source said the government was also keen to stop payment of salaries in those government-owned assets to cut wastes and support the economy.

Plans alive
The Federal Government has mulled the sale of assets since 2016 but several issues such as vested interests, legal issues, political interference, protests and an inability to ascertain its proper value have halted the ambition.

Former Finance Minister, Kemi Adeosun, had confirmed that the Muhammadu Buhari’s regime readiness to sell the national assets to raise funds.

The former minister had said in 2016, “I think there are a number of assets that are being considered and I don’t think we’ve said this one or that one.

“There are some unused assets that are just lying idle which people have come and suggested that ‘this thing you are not using, can we lease it from you for money?’

“Hence, when they lease it from us, the taxes are still going to come to us. So, there are some things the government is sitting on, we don’t have money to do it, it makes sense for me to unlock those things. So, it brings money into the economy at these difficult times, so that we can move forward.”

However, this was not followed up until recently.

At a ministerial briefing on Wednesday in Abuja, Finance Minister, Zainab Ahmed, had said that the Federal Government would offer some of its assets for sale through equity investments. She said the government would toll some of the federal roads to raise revenue.

She noted that even the Ministry of Finance would be generating for the government in the future.

“We have started the process of re- engineering the Ministry of Finance Incorporated, which is an arm of government that has the responsibility of managing government investments.

“It has been in existence since many years ago, with the same laws and has gradually become quite inefficient to be honest.

“So, we have gotten the approval of Mr. President to rejuvenate MOFI. We have done a lot of studies. We’re now at the stage where, in the next month, or six weeks we’ll be able to launch the new MOFI.

“We are going to open these assets for investments. So, we are issuing different kinds of equity instruments for investment in these assets.”

BPE ready
The Bureau of Public Enterprises said that it was compiling the list of assets that would be concessioned.

The BPE’s Head of Public Communications, Mr Uzoma Chidi Ibeh, said that there was no bidder yet for the assets.

“The list is being compiled. There is no bidder yet, but we have a register of all the assets,” he said.

He confirmed that all the NIPP projects would be concessioned, stressing that the government was desirous of stopping wastage incurred by those assets.

“The Federal Government is putting a lot of money into financing those projects. The government pays staff liability and salaries but it is tired of paying them. Our interest is to stop those expenses,” he said.

He said the interest of the government was to have real investors and not firms that would be stripping the nation’s assets.

“The capacity is more important. We don’t want to get someone who will be stripping the national assets,” he said, noting that the essence of the effort was to fund the 2023 budget.

Professor of Economics at Nnamdi Azikiwe University, Uche Nwogwugwu, wondered how much the government would make from such assets, noting that the current regime might handicap the incoming government in 2023 by selling the assets.

He argued that this should be left for the next government since the current government would not fully implement the 2023 budget.

Chief Executive Officer of the Centre for the Promotion of Private Enterprise, Dr Muda Yusuf, noted that it is a valid argument for the government to consider selling or concessioning redundant assets.

“There is logic behind that. An institute says the government has 50,000 properties that are abandoned and their estimate is around N9.5tn. So, I think it is a good idea to turn dead assets into assets that can yield value,” he said.

Dr Ayo Teriba has also argued in that line, saying that ‘’Nigeria is rich in assets. So, I think it is a good idea,” he added.

A former President of the National Accountants of Nigeria, Dr Sam Nzekwe, said these assets would likely be sold at cheap prices, with the government generating less than it should.

He said, “The problem there is that they sometimes sell these assets to their friends and families at giveaway prices. That is a major concern. When looking at some of the assets, why were these assets not working in the first place? They ran these assets down and the next thing is to sell them.”

Nzekwe added that it was not reasonable to use proceeds from asset sales to finance recurrent expenditure but capital expenditure.

“It is not a good thing, especially when the proceeds are used to finance recurrent expenditure but if they use it to finance capital expenditure, it is a different thing. So, we have to ask if they are using it to finance recurrent or capital expenditures,” Nzekwe said.

The Managing Director/Chief Executive Officer, Cowry Asset Management Limited, Mr Johnson Chukwu, stressed the need for proper valuation of these assets in order to assess the feasibility of sales within an election period.

He said, “First, what are those assets that they want to sell? If we know the assets, we can now determine if these assets can be sold within an election period. For an outgoing government to budget asset sales just before an election, it is likely preposterous. It is a tough call to make.”

Credit: The Punch

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BIG STORY

President Tinubu Commends NNPCL Over Reopening Of Warri Refinery

Published

57 mins ago

December 30, 2024

PorscheClassy News

President Bola Tinubu has expressed his profound joy at the re-opening of the Warri Refining and Petrochemical Company by the Nigerian National Petroleum Company Limited, describing it as another remarkable achievement in 2024 that has strengthened Nigerians’ hope in his administration.

Today, the Warri Refinery resumed operations weeks after NNPC Limited restarted the 60,000 Barrels per day at the Port Harcourt Refinery in November.

With Warri Refining and Petrochemical Company (WRPC) now operational after several years of inactivity, President Tinubu has reiterated his administration’s commitment to boosting local refining capacity and making Nigeria a hub for downstream industrial activities in Africa.

The All Progressives Congress-led administration of President Muhammadu Buhari awarded the contract for the complete rehabilitation and overhaul of the four state-owned refineries.

President Tinubu confidently stated that with the 125,000 (bpd) Warri Refinery now operating at 60% capacity, his administration’s comprehensive plan to ensure energy efficiency and security is fully on track.

He commended the Mele Kyari-led management of NNPCL for their efforts in restoring Nigeria’s status as a major oil-producing country.

“The restart of Warri Refinery today brings joy and gladness to me and Nigerians. This will further strengthen the hope and confidence of Nigerians for a greater and better future that we promised. This development is a remarkable way to end the year following the feat recorded earlier with the old Port Harcourt Refinery. I am equally happy that NNPC Limited is implementing my directive to restore all four refineries to good working condition.

“I congratulate Mele Kyari and his team at NNPCL for working hard to restore our national pride and make Nigeria a hub for crude oil refining in Africa,” President Tinubu said.

President Tinubu urged NNPCL to expedite repair work on the Kaduna Refinery and the 150,000 (bpd) second refinery in Port Harcourt to solidify Nigeria’s position as a global energy provider.

WRPC will focus on producing and storing critical products, including Straight Run Kerosene (SRK), Automotive Gas Oil (AGO), and heavy and light Naphtha.

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BIG STORY

JUST IN: Warri Refinery Has Resumed Operations — NNPCL

Published

5 hours ago

December 30, 2024

PorscheClassy News

Barely a month after the commencement of operations at the 60,000-barrel-per-day-old Port Harcourt Refinery, the Nigerian National Petroleum Company Limited has announced that the 125,000-barrel-per-day Warri Refining & Petrochemicals Company in Warri, Delta State, is now operational.

This was disclosed by the NNPCL Group Chief Executive Officer, Mele Kyari, during a tour of the facility on Monday.

A video posted by Channels TV on Monday showed Kyari addressing a tour team, which included the Chief Executive Officer of the Nigerian Midstream and Downstream Petroleum Regulatory Authority, Farouk Ahmed.

Before the tour commenced, Kyari explained that the inspection aimed to show Nigerians the level of work completed so far.

According to him, although the repairs on the facility are not yet 100 per cent complete, operations have commenced.

He said, “We are taking you through our plant. This plant is running. Although it is not 100 per cent complete, we are still in the process. Many people think these things are not real. They think real things are not possible in this country. We want you to see that this is real.”

Located in Ekpan, Uwvie, and Ubeji, Warri, the petrochemical plant produces 13,000 metric tonnes per annum (MTA) of polypropylene and 18,000 MTA of carbon black.

Commissioned in 1978 and managed by NNPCL, the WRPC was built to supply markets in the southern and southwestern regions of Nigeria.

The mechanical completion of the facility was initially scheduled for the first quarter of 2024, according to the NNPCL spokesperson, Olufemi Soneye.

“Warri should be done by Q1 (first quarter) 2024,” Soneye stated.

The WRPC is one of Nigeria’s four refineries, alongside the old and new Port Harcourt Refining Company in Rivers State and the Kaduna Refining and Petrochemical Company in Kaduna State.

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BIG STORY

Wike Slams Peter Odili, Says I Brought You Back To Life Politically

Published

7 hours ago

December 30, 2024

PorscheClassy News

The Minister of the Federal Capital Territory, Nyesom Wike, on Sunday, strongly criticized ex-Rivers State Governor, Peter Odili, calling him a rent seeker and an ingrate for supporting the current Governor, Siminalayi Fubara.

Wike was responding to Odili’s recent statement that Fubara stopped him (Wike) from turning Rivers into his personal estate.

According to a statement on Sunday from his media aide, Leke Olayinka, Wike made his remarks at a Special Thanksgiving Service organized by the factional Speaker of the Rivers State House of Assembly, Martin Amaewhule, at the Church of Nigeria (Anglican Communion), Oro-Igwe/Eliogbolo Archdeaconry Church of the Holy Spirit, Eliozu Parish, Port Harcourt.

Wike, who labeled Odili an ingrate, recounted how he built a house for the former governor and mentioned that Odili also had some of his family members in government positions, turning Rivers into his private estate.

“Must you be a trader all the time? As governor for eight years, what else are you looking for? You know, I didn’t want to say anything. But somebody called me last night, and told me what someone said in the social media. I said until I read it myself. This morning, I read in the newspapers, what our former Governor, Sir Dr Peter Odili said.”

“What did he say? He said that the present governor has been able to stop one man who wanted to convert Rivers State to his personal estate. Between him and myself, who has turned Rivers State to his personal estate? His wife is a Chairman of Governing Council, his daughter is a commissioner, his other daughter is a judge and he is the general overseer. Who has now turned Rivers State to his private estate? I am sure if care is not taken, if there is a chance, he can even arrange a marriage for the governor.”

“In 2007 after he left office, he couldn’t come near power in the State because Amaechi was the governor then. He was gone! Like somebody said that God will use someone to lift up someone. When I came in as governor in 2015, I won’t use the word resurrected, but I brought him back to life,” Wike said.

The Minister also mentioned that Odili had previously praised him as being better than past governors in the state, asserting that the former Governor had reduced himself to a laughingstock.

“All of you here remember when I was governor, this same Odili praised me to high heaven. In fact, he said then that all past governors in Rivers State combined did not do better than me. Now, because you have organized a Christmas Carol for the governor, I didn’t say you should not do your Christmas Carol. But why reduce yourself to such a laughing stock? People will still see it on television how he was telling the whole world then how God used me to bring him back to life politically.”

“The governor that all of us made has not spent one year in office and the same Odili was already saying that the governor has beaten the records of all the past governors of Rivers State. When I was there, he said I had surpassed the records of all the past governors, including himself. What can he even show that he did in his eight years as governor? But a governor has not spent one year, you are saying he has done more than all the past governors.”

The Minister further emphasized that the former Governor had no significant accomplishments during his eight years in office. He added that Odili failed in his Presidential bid and opposed Fubara’s emergence as Governor of Rivers State.

“You spent eight years as governor and someone who hasn’t spent one year has surpassed your records, what manner of elder talks like that? Is that what an elder statesman should be known for?”

“When I was plotting who will be governor after me, was he (Odili) there? Then, he was complaining about this governor, saying that he couldn’t stand before the public to talk. But today, he is organizing Christmas Carol for the same governor he was against then.”

“He has forgotten all that he said in the past. I named this after you, I named that after your wife. What have I not done? This is a man who wanted to run for President then, he didn’t have the balls, he chickened out. Simply because Obasanjo said no, he will not contest, he ran away. Because of him, I never invited Obasanjo to Rivers State to inaugurate projects. I felt it would humiliate him,” Wike said.

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