A budget ministry document has revealed that Nigeria plans to sell off some assets to generate as much as USD16.4 billion in the next four years to reduce the burden on the public budget.
The sales will help to tackle inefficiencies and stem “corruption in public enterprises,” according to the document obtained by Bloomberg, which outlines the West African nation’s plans for economic recovery from 2017 to 2020. President Muhammadu Buhari will introduce the proposal on an unspecified date this month. It didn’t name the assets it may sell.
Nigeria estimates its economy contracted 1.5 percent in 2016, partly because of a decline in the price and output of oil, the country’s biggest export and revenue generator. Buhari proposed a 20 percent increase in this year’s budget to stimulate the economy and help gross domestic product expand by an average of 4.7 percent annually over four years and reach 7 percent in 2020.
“They could look at reducing government stakes in oil joint ventures from around 55 percent to 40 percent or 45 percent — that alone can generate over USD10 billion,” Pabina Yinkere, the Lagos-based head of research at Vetiva Capital Management Ltd., said by phone. “Non-oil assets like concession airports are a more difficult sale because they would involve a lot of transactions.”
The government targets oil production of 2.5 million barrels a day by 2020 to boost export earnings, it said in the document. Output declined to an almost three-decade low of 1.4 million barrels a day in August after militants in the Niger River delta region bombed pipelines to demand more benefits from the resource.