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Tag: assets sale

  • Assets sale: ICPC uncovers unremitted N9.8b in Aso Savings

    THE Independent Corrupt Practices and Other Related Offences Commission (ICPC) has uncovered about N9.8billion, realised from the sale of government houses in 2005 in Aso Savings and Loans Plc.

    The said cash was yet to be remitted about 13 years after it was raked in from the sold assets.

    Also, it has been discovered that some of those who bought the Federal Government houses only made part payments and they have refused to fulfil their pledges.

    These revelations are contained in a statement on investigation of the sale of government assets, which was released by ICPC.

    The statement said: “In 2005, the Federal Government set up a committee, the Ad-hoc Committee on the Sale of Federal Government Houses, to sell some of its properties in the Federal Capital Territory.

    “The ICPC received a petition on the work of the committee and commenced investigation, in the course of which it unearthed the fact that the sum of N9.8 billion realised by the Ad-hoc Committee between 2010 and 2014 from the sale of government properties, which was deposited in Aso Savings and Loans Plc, was not remitted to the Federal treasury by the financial institution rather, it was used.

    “Among the several officials invited for investigation, the current Managing Director of Aso Savings and Loans revealed that the bank is currently experiencing paucity of funds. Therefore, it is willing to swap some of its properties located in Abuja and Lagos in exchange for the unremitted funds.

    “The commission is committed to the recovery of the full value of the unremitted N9.8 billion by taking the properties offered in lieu for government, subject to satisfactory valuation by the Ministry of Power, Works and Housing.  Upon conclusion of investigation, anyone found in breach of the law will be brought to book accordingly.

    “In a related development, further investigation of the Ad-hoc committee’s work also uncovered that some persons who were allocated government properties made only part payments.

    “This fact led ICPC to recover the sum of N20, 662,250 from the affected persons in bank drafts, which it handed over to the Chairman of the Ad-hoc Committee between December 2017 and May 2018.”

  • Govt to raise N311b from assets sale

    Govt to raise N311b from assets sale

    •Alcohol, tobacco duties to go up

    HOW will the Federal Government fund next year’s N8.6tr budget?

    The government plans to generate N311 billion from privatisation and outright sale of assets to partly finance the budget.

    Budget and National Planning Minister Udoma Udo Udoma, at the budget breakdown in Abuja yesterday, said: “N306 billion is expected to be generated from privatisation proceeds while the balance of N5 billion would come from the sale of government assets. This will be part of the financing items of the N6.6 trillion that would be used to fund the 2018 budget of N8.6 trillion.”

    The Minister then hinted that alcohol and tobacco products will attract higher excise duty next fiscal year “in a bid to ramp up more earnings from non- oil sources”.

    The government, he said, had devised new methods of generating additional revenue from both oil and non-oil sources. He said “oil revenue would contribute 37 per cent of the total revenue for the budget, Companies Income Tax (CIT), Value Added Tax (VAT) and Customs would account for 12 per cent, 3.1 per cent and 4.9 per cent of the projected revenue for 2018 respectively.”

    Others sources of revenue will be recoveries of looted funds 7.8%; tax amnesty 1.3%; signature bonus 1.7%; joint venture equity restructuring 10.7%, grants and donors funding 3% and others 5.5%.

    Another revenue stream projection is the introduction of a new funding mechanism for Joint Venture operations that will “allow for cost recovery in lieu of previous cash call arrangement; there would be additional oil-related revenue, including royalty, new marginal field licences, early licensing renewals and a review of fiscal regime for oil production sharing contracts while government will restructure its equity in JV Oil assets the proceeds of which will be reinvested in other assets.”

    Udoma said: “Efforts are also ongoing to ensure all taxable Nigerians and companies comply with the legal requirements to declare income from all sources and remit taxes due to the appropriate authorities. In addition, we are working to improve government owned enterprises revenue performance by reviewing their operational efficiency and cost-to-income ratios and generally ensuring they operate in a more fiscally responsible manner.”

    In funding infrastructure, Udoma admitted that N295 billion is inadequate to fix roads across the country. This amount, he said, excludes contribution by the private sector that will be engaged on public private partnership basis to fund   projects.

    Udoma said: “Work is in progress on many of these roads as most of them are in 2017 budget; N300 billion is not sufficient , but we are using Public Private Partnerships (PPPs) and private investors will bring their contributions. To fix Nigeria’s road requires trillions of naira in the budget.“

    Some of the roads listed in the budget for construction and rehabilitation include, Lagos- Sagamu- Ibadan dual carriage way, Ilorin- Jebba- Mokwa- Bokani road, Abuja- Abaji road and Kano- Maiduguri road.

    Others are,  Enugu- Port- Harcourt dual carriageway, Odukpani- itu- ikot Ekpene road, Sokoto – Tambuwal- jega- Kontagora- makera road; dualization of Obajana junction to Benin, calabar- Ugep- Kastina Ala road, Onitsha- Enugu dual carriageway, Abuja- Kaduna- Zaria- Kano dual carriageway way.

    The focus of the 2018 budget, he said, would be to spend more on ongoing projects that have potentials for job creation and inclusive growth.

    In 2018, the minister said huge capital projects would be carried out in transportation, power, works, housing, health, water resources, agriculture and rural development, mines and steel development, industry, trade and investment, and education among others.

    In 2018, N35.4 billion is to be spent on the National Housing Programme, N10 billion for second Niger Bridge, N294 billion on major roads, N8.9 billion on vaccines as well as over N50 billion on water supply, rehabilitation of dams and irrigation projects nationwide.

    In agriculture, N25.1 billion has been budgeted for the promotion and development of value chains across 30 commodities, N4 billion for agri-business and market development, N46.3 billion for special economic zone projects across the geo-political zones to drive manufacturing and exports,and N19.28 billion in form of tax credits to support export through Export Expansion Grant among others.

    Also speaking at the event, Minister of Finance Mrs Kemi Adeosun said the government would continue to come up with reforms that would boost tax revenue, but she was emphatic that the administration does not believe in tax waivers or holidays to businesses.

    According to her what the government is doing “is getting the private sector to invest in road construction and recoup their investments over three years from the tax they are supposed to pay. Government is working on how to make the investment climate friendlier for businesses to thrive.”

    She lamented that out of the about 69 million working population in the country, only 14 million were actually paying taxes, a development she described as “unacceptable.”

    On why the government is carrying out oil exploration in the North when many countries are reducing their demand for crude oil, Minister of State for Petroleum Ibe Kachikwu said the government was under obligation to search for oil anywhere that it could be found within the country.

    He said: “We have an obligation as a nation to continue to ensure that any part where it is found that there is oil, we need to follow through with it. Massive exploration activities continue to proceed in oil producing areas. If you calculate the contributions of oil to 2018 budgetary revenue expectations, it’s almost 60%, and it means that you must continue to expand the frontiers of oil revenue.”

    On whether the government would ever raise education’s budgetary allocation to 26% as recommended by the United Nations, Minister of Education Adamu Adamu said there was never such a recommendation.

    He wondered where Nigerians got the recommendation that 26 per cent of a country’s national budget should be devoted to education.

     

  • Fed Govt eyes $16.4b from assets sale

    Fed Govt eyes $16.4b from assets sale

    The Federal Government plans to generate as much as $16.4 billion through assets sale in the next four years to reduce the burden on the public budget, a Budget Ministry document, has  shown.

    The sales will help to tackle inefficiencies and stem “corruption in public enterprises,” according to the document obtained by Bloomberg, which outlines the  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 per cent increase in this year’s budget to stimulate the economy and help gross domestic product expand by an average of 4.7 per cent annually over four years and reach seven per cent in 2020.

    “They could look at reducing government stakes in oil joint ventures from around 55 per cent to 40 percent or 45 per cent — that alone can generate over $10 billion,”  a Lagos-based head of research at Vetiva Capital Management Ltd., Pabina Yinkere said by phone. “Non-oil assets like concession airports are a more difficult sale because they would involve a lot of transactions,” he siad.

    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 Delta region bombed pipelines to demand more benefits from the resource.

  • Recession: Fed Govt lists conditions for assets sale

    Recession: Fed Govt lists conditions for assets sale

    Peterside, Soludo, NLC
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    MORE facts are coming up on the Federal Government’s plans to sell some assets in a bid to push back the recession that has hit the economy.

    Certain conditions must be met before the sale, which is expected to boost Nigeria’s foreign reserves – a critical factor for potential foreign investors.

    The conditions, include:

    • inserting a repurchasing clause in the assets sales agreements; and
    • no outright sale of the yet unnamed assets.

    A Presidency source, who pleaded not to be named, said: “The Federal Government has no plan to sell off its shares outright in the LNG, where it owns 49% shares. The balance 51% is owned by private foreign interests.

    “The Federal Government doesn’t own the entire gas company and will certainly not sell off its entire shares, but it’s open to the possibility of selling down its 49% ownership by 5% or thereabout.”

    On the repurchase clause, he said: “Just as in other potential asset sales, there would be a repurchase option that guarantees the Federal Government’s opportunity to buy back any such assets if circumstances change anytime in the future.”

    While there have been no list drawn up for the proposed assets sales, the source said that there is also a clear decision not to sell any critical asset. He did not mention such assets.

    He said: “Some of the intended sales could be in form of time-bound leases, advance renewal payments on leasing licences and concessioning which would attract buoyant signature fees.

    “If we even want to sell down certain assets, while our target is to get foreign currency, specifically dollars, the option would also be opened to Nigerians at some point to buy limited shares through the Nigeria Stock Exchange.”

    The source added that one of the concessioning deals almost completed is the East-West lines of the Nigeria Railways, with the General Electric-GE-being the concessionaire.

    The source said the global giant would invest $2 billion in the economy, including for the refurbishment of the single-gauge lane of the lines that have been largely left idle for years.

    GE under the deal, he said, is expected to hire back some of the laid off staff of Nigeria Railways and also open a Transport University in Nigeria while building/assembling train coaches in this country.

    Under the deal, the source said the Federal Government would also receive a signature fee in foreign currency as it would in other assets that might be concessioned.

    “The important thing to keep in mind is that the sales down of some of the assets is an option to raise the much-needed dollars at a critical time for the Nigerian economy,” the source noted, adding that if and when such a sale is done, “Nigerians can be sure that there would be no shady deal, considering the character of the Nigerian leadership at this time”.

    The proposed plan to sell some national assets has generated excited comments especially after businessman Aliko Dangote called for the sale of the LNG last week, fuelling speculations that the Federal Government wanted to sell its entire share in the firm.

    “Generally whatever we sell, we shall get real value for, and we shall include a repurchase clause into any such sales agreements,” the source said.

    Some other experts have argued that there is a need to take some drastic steps to save Nigeria’s shrinking foreign reserves.

    It is believed that an injection of about $15 billion into the reserves will have a positive impact on the economy.

    The Federal Government’s plan to raise between $10 billion to $15billion quickly from asset sales “is imperative” as the monthly foreign earnings have dropped drastically to as low as about $300 million.

    The government also has been losing about one million barrels of oil due to vandalisation of pipelines and installations by militants in the Niger Delta region.

     

  • Governors, ministers back assets sale to fight recession

    Governors, ministers back assets sale to fight recession

    There was an insight yesterday into the Federal Government’s battle against the recession that has hit the economy.

    The government’s plan to exit the recession which got the backing of the National Economic Council (NEC) includes

    • assets sales;
    • advance payment of licence renewals;
    • infrastructure concessioning; and
    • implementation of fiscal stimulus.

    The NEC is the highest economic decision body chaired by the vice president. Other members are governors and key ministers in charge of the economy and the Central Bank of Nigeria (CBN) governor.

    Some experts and leading politicians have suggested the sale of some assets, saying this will provide the cash to reflate the economy, reopen factories and put money in the people’s pockets.

    Pushing this view are business giant Aliko Dangote, former Central Bank of Nigeria (CBN) Governor Muhammad Sanusi II, the Emir of Kano and Senate President Bukola Saraki, among others.

    But Labour has condemned the idea, saying it will make a few to amass the wealth of all and deepen the seeming despair in the land.

    Yesterday’s meeting, which started about 11.10am, was presided over by Vice President Yemi Osinbajo.

    No fewer than 23 governors attended it. They include Governors Ayo Fayose (Ekiti),  Abubakar Atiku Bagudu (Kebbi), Ifeanyi Okowa (Delta),  Abubakar Mohammed (Bauchi),  Willy Obiano (Anambra),  Ifeanyi Ugwuanyi (Enugu),  Abdufatah Ahmed (Kwara),  Yahaya Bello (Kogi),  Nasir el-Rufai (Kaduna), Olusegun Mimiko (Ondo),  Aminu Tambuwal (Sokoto),  Abiola Ajimobi (Oyo) and Badaru Abubakar (Jigawa).

    Deputy governors of Rivers, Nasarawa, Katsina and Lagos represented their bosses.

    A statement from the media office of the Vice President on the meeting said: “Rising from its monthly meeting today at the Presidential Villa, members of the National Economic Council, NEC, presided over by Vice President Prof Yemi Osinbajo (SAN), expressed support for the plans and proposals of the Federal Government to steer the country out of recession.

    “While acknowledging the current economic challenges and difficulties, governors at the meeting also endorsed the work of the President’s Economic Management Team and specifically commended the Budget & Planning and Finance Ministers.”

    Among the measures for economic revitalisation, he said, are a plan to generate immediate larger injection of fund into the economy through assets sales, advance payment of licence renewals, infrastructure concessioning, and use of recovered funds etc to reduce funding gaps, implementation of Fiscal Stimulus/Budget Priorities.

    “Council members in response commended the Economic Management Team and generally welcomed the presentation and expressed support for the plan to steer the nation out of recession.

    “Under AOB, Council members expressed confidence in and unanimously commended the EMT and both the Budget & National Planning and Finance Ministers for the presentations to the Council, praising their efforts, competence and capabilities.”

    The NEC also expressed confidence in the capability of Minister of Budget and National Planning, Udoma Udo Udoma and Minister of Finance Mrs Kemi Adeosun.

    Deputy Senate President Ike Ekweremadu and a few other senators on Wednesday pushed for the removal of Udoma and Adeosun for their ‘poor’ handling of the economy and the recession.

    But, speaking with reporters at the State House yesterday at the end of the NEC meeting, Kebbi State Governor Atiku Bagudu said NEC praised the  handling of the economy.

    He was accompanied to the briefing by Ajimobi and Ogun State Deputy Governor Mrs. Yetunde Onanuga.

    Bagudu said: “The National Economic Council met today at its sixth meeting of the year, which is the 70th National Executive Council meeting and the Ministers of Budget and National Planning and the Central Bank (of Nigeria) Governor made presentations and the highlights of the presentations were the sad news that the economy was in recession largely due to the dependency on single commodity which is crude oil, which prices we do not control.

    “Oil price collapsed to less than $30 per barrel in first quarter of 2016 and market expectation is that it will remain low for a longer period.

    “However, this crisis holds a silver lining to restructure the economy towards other areas that we believe we have comparative advantage.

    “Fast track procedures through legislation and strategic implementation plan of the budget, meaningful diversification of the economy which will cut down importation.

    “The members of the council responded and acknowledged with commendation the presentation by the economic team and support the plan to steer the nation out of recession.

    “And, in particular, it was noted that our economic managers the National Economic Team are responding in competition with economic managers elsewhere. So it is not an easy task, it is a very difficult task and we crave the indulgence of our nation to give them a chance for the measures to take effect.”

    Ajimobi said the Presidential Technical Committee on Land Reform (PTCLR) presented the draft regulation on Land Use Act 2013 to NEC.

    According to him, the regulation seeks to make provisions to streamline mortgage transactions and clearly delineate the rights, duties and obligations of a mortgage.

    Ajimobi said the Minister of Finance made a presentation on Public Private Partnership (PPP) Initiatives on Affordable Housing.

    Highlights of the presentation, he said, included target of N1 billion fund to operate PPP (N500 billion initial) to create a blended pool of long term funds to intervene in housing development finance and mortgage provision

    He said the fund will deliver family housing for as low as N2.5 million up to N18 million delivered in a ready to occupy condition with essential services (water and power connected).

    Ajimobi said: “The delivery target is 400,000 to 500,000 housing units per annum. The ultimate aim of the programme is to channel funds from savers to borrowers, so that builders have the required capital to construct and prospective buyers can access credit to purchase.

    “The fund will attract low cost local and international capital, including from domestic pension and insurance funds, Federal Government funding, as well as contributions from state governments and other agencies.”

    The states are to designate a liaison with whom Family Homes Fund can interface, expedite building plan approval process and security of land title, invest in enabling infrastructure, such as Federal roads.

    Other benefits, Ajimobi said, include improved urban planning and development, employment generation and skills enhancement, and expansion of tax base.

    Mrs. Onanuga said the NEC was briefed that the balance on Excess Crude Account (ECA) as at 20th September, 2016 was $2.453 billion.

    She said Adeosun and CBN Governor Godwin Emefiele briefed NEC on best options for managing the floating forex policy introduced by Emefuele.

    Highlights of the presentation, Mrs Onanuga said, included CBN -introduced cautious Monetary Policy orientation as dictated by consumer price and exchange rate, adoption of policy tightening measures for flexible forex rate to address persistent pressures caused by scarcity and speculative demands, improving market dynamics by CBN, interventions to states in the area of salaries and in commercial agriculture.

    She said that the presentation also noted that controlling inflation is key to stabilising other macroeconomic indices and the current stance of monetary policy is expected to continue to help lock-in inflation expectations.

    On the update on Budget Support Loan facility, Mrs Onanuga said the minister of finance reported to Council that N50 billion had so far been disbursed to state governments while the facility was ongoing.