Minister of Finance, Zainab Ahmed
Minister of Finance, Zainab Ahmed

Despite borrowings, Nigeria plans to sell govt properties to finance 2021 budget

NEWS DIGEST – Having suffered its second recession in four years towards the end of 2020, the Federal government has resorted to selling some government properties to finance its N13.58 trillion budget for 2021.

Finance Minister Zainab Ahmed outlined the government’s plan to finance the 2021 budget at ‘Public Presentation of 2021 FGN Approved Budget—Breakdown and Highlights’ on Tuesday in Abuja.

A struggling oil market and the outbreak of Covid-19 in 2020 had already forced the government to advocate more borrowing to fund 2021’s budget.

When presenting the 2021 budget to lawmakers last October, President Buhari said, “The deficit will be financed mainly by new borrowings totalling N4.28 trillion.” This figure, when passed by the National Assembly, had been increased to N4.69 trillion.

Nigeria’s budget deficit in the presented budget stands at N5.60 trillion. The intended sales are expected to help augment the borrowed sum and offset the budget deficit. In borrowing N4.28 trillion, the FG would also increase the country’s debt profile to about N35 trillion.

In the document presented by Mrs Ahmed—obtained on the Ministry’s website—the country also intends to finance 2021’s budget through the sales of non-oil asset.

There was little mention of the government-owned properties the FG intends to sell. The document also did not the reveal the predicted revenue to be collected from any such sales.

But in November 2020, the FG outlined plans to sell some properties to the Senate in a defence of the 2021 budget. In its revenue projection for 2021, the FG expects to sell the power plants in Geregu, Omotosho and Calabar for a combined N434 billion.

There were also plans to concession the National Art Theatre for N200 million, Tafawa Balewa Square for N436 million, all the River Basin Development Authorities for N200 million and several football stadiums in the country.

Also seen under “additional financing” in the document is multi-lateral/Bi-lateral project-tied loans which amount to N709.69 billion and privatization proceeds at N205.15 billion.

Beyond those, the government will also finance the budget through “borrowings from special accounts.” It is suspected that this is consequent of the 2020 Finance Act which allows the FG to borrow from dormant accounts and unclaimed dividends.