Not a few Nigerians have been questioning the move by the federal government to sell some of its property to fund the 2021 budget. In this piece, BENJAMIN UMUTEME examines the rationale behind the move.
When the Minister of Finance, Budget and National Planning, Zainab Shamsuna Ahmed, first made public the plans by the federal government to sell some of its property to fund the 2021 budget, it got many wondering but when she reiterated it, many knew the government had already concluded on that line of action.
The approved budget on the website of the Budget Office of the Federation, indicate that N13.58 trillion would be spent by the federal government in the 2021 fiscal year. This is 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). In addition to borrowing, the government wants to sell some of its assets to fund the budget.
Explaining the reason for the move, the minister said the government took the current position because the assets were moribund and provided little or no value in their current state.
This is as she also said that the plan by the government to sell public assets would be of benefit to Nigerians and help boost the economy.
Nigerians kick
However, many Nigerians consider the government’s decision to sell its assets as economic harikiri. They have said it does not make economic sense to sell assets just to fund a 12-month budget circle.
The Socio-Economic Rights and Accountability Project (SERAP) had called on the National Assembly (NASS) to stop the federal government from selling the country’s properties to fund the budget.
SERAP, Deputy Director, Mr Kolawole Oluwadare, in a press statement, said the NASS should prevail on the executive to halt the process.
The group gave a sound warning that selling valuable public property to fund the 2021 budget would be counter-productive as this would hurt the country on the long run.
“Allowing the government to sell public property and to enjoy almost absolute discretion to borrow to fund the 2021 budget would amount to a fundamental breach of constitutional and fiduciary duties.
“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.”
It’s unwise, difficult to replace
In the same vein, former Chairman, Estate Surveyors and Valuers Registration Board of Nigeria, (ESVARBON), William Oruka Odudu, has said selling national property was unwise because it would be difficult to replicate such edifice in the future.
According to him, the government had in the past sold a lot of property cheaply and now they cannot replicate them, nor rebuild them.
“They have borrowed enough money in the past, which is unnecessary and now they want to sell the nation’s assets to finance the budget, it is not a welcome thing at all. I won’t encourage it because to replace them would almost become impossible.
“The National Theatre in Lagos, for example, if sold, how would you replace such a monument? It is something that posterity would love to admire.
“If it’s sold, it may be given out cheaply to private individuals or political cronies and so it is not wise. Buyers could make so much money at the expense of the government,” he stated.
Unethical, desperate measure – Global rights
The Executive Secretary, Global Rights Nigeria, Abiodun Baiyewu, has described the government’s move as troubling.
She said, “The Minister’s statement is troubling, and it is one in a recent trend of desperate moves including, borrowing from pensions, and then taking over dormant accounts and shares.
“We should be concerned and ask salient questions: first, is the nation so broke that it has to resort to the selling off assets to augment its current budget?
“Second, will the funding of this budget through these unethical and desperate measures proposed by the government, generate sufficient revenues to fund subsequent years?
“The assets referred to are vague. The vagueness of this process may be a pointer to state capture which will benefit ‘friends of the regime’ but not Nigerians. In addition, what happens after 2021? Will they sell the nation and its citizens?
“I think its implications are visible on the surface of it: that it is not a smart move and will only further impoverish the nation. When you sell your assets to meet needs, it’s often indicative of deeper challenges and is a pointer that you are unable to think of more ingenious ways of deriving revenues.
“How fast will these assets sell, and in its desperation will the government get a good bargain? If in 2021, these assets sold do not produce a tangible and sustainable income stream for 2022 and beyond, you can be sure that the delivery of public services will fail, our weak institutions will be further incapacitated, insecurity will be heightened, the cost of goods and services will escalate. Yes, hunger will drive people to the streets,” she said.
It’s absolutely condemnable – CISLAC
The Executive Director, Civil Society Legislative Advocacy Centre (CISLAC), Awual Rafsanjani, stressed that, “It is not a good move by the federal government because we have been advising the government to plug leakages and waste, and a lot of diversion of public funds has been going on but the government seems not to take drastic measures to at least minimize diversion of public funds and assets.
“Therefore, we need to ensure that the country does not entirely collapse. The government needs to do everything possible to block leakages and there are many other measures the government should have taken.
“If these assets are sold now what guarantee do you have to fund next year’s budget? It is a very wrong idea by the officials of the Buhari-led administration to embark on selling the remaining assets of Nigerians. This is absolutely condemnable.
“If they claim that they have recovered loots from looters why can’t they use the recovered loots to finance the budget? Why can they use the increased revenue they have generated to finance the budget?
NIESV advocates proper valuation, due process
For the Nigerian Estate Surveyors and Valuers (NIESV), there was nothing wrong with selling due property if the government would ensure proper valuation of the assets and follow due process.
NIESV President, Sir Emma Wike, said: “Let us have transparency and openness. If the government is to go ahead they should have included it right from the preparation stage of the budget, determine how much would be realised.
“Of there would have been proper valuation according to the Procurement Act so that people could know how much revenue is expected from the sale before the President assented to the budget bill. Anything done after the Appropriation Bill could become illegal.”
‘It’s against fiscal responsibility rules, principles’
Towing the same line, Lead Director, Centre for Social Justice (CSJ), Eze Onyekpere, called for strict observance of the privatisation process as advanced by the National Council on Privatisation, and the Bureau of Public Procurement, which should make sure the process is competitive, and that everyone interested comes in, and then, government should pick the best value for the items that are for sale.
“Ideally, government shouldn’t sell capital assets to use the money for recurrent purposes because it’s against the rules and principles of fiscal responsibility. “Government should rather cut down the cost of running government, instead of borrowing and selling assets to meet the over- bloated expenditures, which do not add much value to the economy,” Onyekpere said.
Whether it is a right step at this crucial time only time will tell.
