FG to tackle deficit, debt with assets sales, other measures– Finance Minister

At the backdrop of the rising fiscal deficit and debt burden, the Federal Government is taking steps to offer some of its assets for sale through equity investments while raising revenue through road tolls.


The assets are valued at over N30 trillion held in over 60 enterprises and agencies.

Read Also: Reps divided over increased borrowings

The Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, disclosed this at the 2023 Budget breakdown in Abuja yesterday.

To effectively execute this agenda, she said the Ministry of Finance Incorporated (MOFI) has been reinvigorated with a board of it’s own to make it more responsive to its mandate.

The fiscal deficit for 2022 is estimated at N7.35 trillion, while the N5.33 trillion deficit as at August, was N430.82 billion above the prorated level.  The level of borrowing was N1.26 trillion above the July target.

Ahmed said that the administration was tackling the revenue challenge head-on with a view to reducing the deficit budget and significantly reducing its debt stock.

She said that the Nigerian National Petroleum Company Limited would go public next year and that the federal government would earn substantial income from the exercise.

The minister added that several federal roads across the country were being prepared for tolling in a Public-Private partnership, as part of the strategies to increase its revenue profile.

Similarly, she said that airport’s concessions would be executed to raise income for the federal.

Her words, “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.

“The government doesn’t have the capacity to recapitalise some of these assets. So, as I am talking about investments like the Bank of Industry; the Development Bank of Nigeria, several agencies of government or companies that government owns.

“We have set it (MOFI) up as a world-class investment company, with the new management and a new board to move from the civil service structure.

‘‘Currently, it has a unit under the Office of the Accountant-General of the Federation to get core professionals that are really focused and specialised in Portfolio Management.

Nigeria not seeking debt restructuring

The Minister said that Nigeria was not seeking debt restructuring because its debt “is sustainable”.

According to her, “Nigeria is not planning on restructuring its debt as it remains committed to meeting its domestic and external debt obligations.

“The FG will continue to utilize appropriate debt management tools to streamline the cost and risk profile in the debt portfolio, including through concessional loans, spreading out of debt maturities to avoid bunching, and re-profiling of the debt maturities by refinancing short-term debt using long-term debt instruments.”

ASUU provided for

On funding of the education sector, and the Academic Staff Union of Universities (ASUU) crises, Ahmed disclosed that funds had been earmarked to meet the demands.

She said that special provisions had been made to meet their funding, including the arrears.

She also disclosed that the National Youth Service Corps (NYSC) scheme was being reviewed to enable Diaspora Nigerians serve whenever they return home, against the three-year time frame provided by the NYSC Act.

Buhari raised salaries 250%

The Minister said that President Muhammadu Buhari’s administration has raised salaries of Federal Government workers by 250 percent since 2015.

Reacting to requests for fresh salary review for public sector workers, she said that such an exercise require huge resources and that despite such calls, the government would rather first consider the implementation of the recommendations of the Steve Oronsaye Committee on restructuring of the ministries and agencies.

Assets sales is questionable solution – Experts

Speaking on the development, Managing Director of Universal Insurance Plc, Mr. Ben Ujoatuonu stated that tackling deficit and debt with assets disposal is not the solution to the debt and deficit crisis plaguing the country.

Ujoatuonu said: “We are still suffering from the problem of even the privatisation and sale of assets that was done during Obasanjo regime and some other things.

“Of course you hear people still counting it as one of the pains of the PDP presidential candidate.

“And if you look at some of those infrastructures that were sold, the public is not getting the required divided. Even the fund realised from such sale, various agencies and government cannot account for it.

“Where is the justification that if these assets are sold and our common patrimony is given out to now use to fund deficit, it is going to impact the economy? What were the deficit used for?

“In the news today is that naira is overvalued and that naira should be revalued by 20 per cent. If it is done, it means that the official rate will be going at the range of about N550 to a dollar.

“So you should be expecting the parallel market to get to over N1000. So if you look at all of these, is it the solution to the economic problem? It is not.

‘‘Once these assets are sold, they are sold. These are short term measures approach to a long term problem. I don’t think it is the solution.

‘‘Government should think; We need to block loopholes; we need to be creative. A lot of pressure is on naira because we are import dependent nation.

“We need to think of how to create productive lines that will cushion the effect and pressure on naira, so that naira will begin to regain itself in the FX market.

‘‘Then our economy will begin to pick up, deficit will begin to go down. No matter what we do on this short measure on borrowing, we will continue to create hole that will be difficult to fill, I don’t think that is the solution.”

Also speaking, David Adonri, Vice Chairman, Highcap Securities, noted that forced sale of federal government’s assets cannot generate the targeted amount to service the debts and plug the projected deficit.


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