By Jeph Ajobaju, Chief Copy Editor
Abuja plans to sell or concession at least 36 government properties to raise funds mainly to finance the N13.58 trillion budget for 2021, casting it sights across energy, industries, communication, and infrastructure.
The massive sell off, expected to have begun in January 2021, is mooted to run through November 2022, according to reporting by PREMIUM TIMES.
Assets on the list include refineries in Kaduna, Port Harcourt, and Warri which are making losses but have cost a total $26.5 billion in turn around maintenance (TAM) in recent years.
TheNiche reported on March 31 that based on the cost of refineries across the world, $26.5 billion is enough to build three new refineries of the size of the existing ones whose total capacity is 445,000 barrels per day (bpd), per The Guardian (Nigeria).
PREMIUM TIMES cited a document submitted to the National Assembly (NASS) by Aso Rock titled “NCP Approved 2021 Work Plan” which shows the names of the “projects”, sale strategy, duration of the process, and cost of the properties.
The properties include Abuja Environmental Protection Board (AEPB), Abuja International Conference Centre (ICC), unnamed refineries, Transmission Company of Nigeria (TCN), Abuja Water Board, and Nigerian Film Corporation.
The process has begun for the concessioning of Tafawa Balewa Square, Lagos; Lagos International Trade Fair Complex; and Calabar Special Economic Zone; and Kano Special Economic Zone.
There are different sale strategies for the properties. Some are ‘core investor sales’, others for ‘share sales’. Some are for ‘concessioning’, others for ‘full or partial commercialisation’. Some are to be sold to a ‘willing buyer’.
A core investor sale is the transfer of at least 51 per cent ownership, accompanied by management control, in a company from government to new private owners.
The Bureau of Public Enterprise (BPE) classifies ‘core investor’ as Nigerian or foreign individuals or firms with the money to buy and operate a company, and the technical and managerial capacity to ensure its profitability.
A concession is a form of Public-Private Partnership (PPP) where a government-owned asset is operated and maintained by a private investor for a certain period on terms contained in a concession agreement.
Properties and prices on offer
The document categories the 36 projects into five departments – energy (nine projects), industries and communications department (eight) and development institutions and natural resources (six).
Other are infrastructure and public private partnership (four) and post transaction management department (nine).
Per reporting by PREMIUM TIMES, below is a summary of some projects:
| SUMMARY OF PROPERTIES & PRICES | |||
| PROPERTY | SALE STRATEGY | DURATION | COST (N) |
| Yola Electricity Distribution Company | Core Investor Sale | 11 months | 245 million |
| Conclusion of Afam Power & Afam Three Fast Power Limited | Core Investor Sale | 12 months | NA |
| Mineral House Lagos | Asset Sale | 3 months | 5.5 million |
| Geregu Power (20% Shareholding Sale) | Willing Buyer – Willing Seller | 7 months | 20 million |
| Zungeru HydroPower | Concession | 19 months | 423 million |
| Transmission Company of Nigeria | Concession | NA | NA |
| NIPP | Core Investor Sale | NA | 1.26 billion |
| Refineries | Core Investor Sale | NA | NA |
| NIPOST Restructuring/Modernisation | Reform/Restructuring | 7 months | 40 million |
| Nigerian Film Corporation | Commercialisation | 13 months | 25 million |
| AEPB | Concession | 16 months | 124.4 million |
| Nigerian Hotels (in-liquidation) | Resolution of Residual Issues | 5 months | 2.4 million |
| NITEL/MTEL Residual Issues | Resolution of Residual Issues | 12 months | 10 million |
| Abuja Water Board | Commercialisation | 17 months | 25 million |
| FG’s Shares in Sales Sugar Company | Share Sale | 6 months | 40 million |
| ICC | Concession | 12 months | 30 million |
| River Basin Development Authorities | Commercialisation/Concession | 14 months | 44.3 million |
| Tafawa Balewa Square | Concession | 7 months | 40 million |
| Lagos Intl Trade Fair Complex | Concession | 13 months | 43 million |
| Restructuring of FMBN/FHA | Restructuring | 11 months | 150 million |
| Bank of Agriculture | Restructuring/Recapitalisation | 38 months | 11.5 million |
| Nigeria Commodity Exchange | Restructuring/Recapitalisation | 39 months | 10 million |
| Evaluation of DISCOs & GENCOs | NA | 12 months | 10 million |
| Evaluation of Ports | NA | 12 months | 15 million |
| Resolution of Labour Issues | NA | 12 months | 25 million |
Initial ‘conflict’
According to PREMIUM TIMES, the first hint of sale or concessioning came up at the BPE’s budget defence in November 2020.
Documents the BPE presented to the Senate Privatisation Committee showed plans to sell Integrated Power Plants in Geregu, Omotosho, and Calabar at N434 billion in 2021, among others, but the committee insisted it was not aware of the plan.
Committee Chairman Theodore Orji said the panel was not aware of it and complained that BPE Director General Alex Okoh “refused to carry members of the panel along.”
However, weeks later, the committee confirmed that some properties will be sold or concessioned. This was after the panel and the BPE “resolved” the matter.
The government also confirmed this later when Finance Minister Zainab Ahmed presented a breakdown and highlights of the 2021 budget to stakeholders.
She said in addition to selling or concessioning some properties, Abuja will also engage in foreign and domestic borrowings as additional sources of finance for the budget.
Civil society opposition
Many, both individuals and civic groups, kick against the plan to sell off the national assets, and also oppose borrowing.
The Socio-Economic Rights and Accountability Project (SERAP) written to the NASS asking it to stop sale, arguing it breaches constitutional and fiduciary duties.
Rather than sell off assets or borrow, SERAP proposed a cut in the cost of governance in areas such as lawmakers’ salaries, constituency allowance, wardrobe allowance, recess allowance, and entertainment allowance.
It described such a sale as counter-productive, saying it will be vulnerable to corruption and mismanagement, undermine the social contract with Nigerians, leave the government worse off, it is neither necessary nor in the public interest, and will hurt the country in the long run.