Nigeria to Generate $16.4 Billion Through Asset Sales…

February 14, 2017 2:17 pm0 commentsViews: 11

Dollar-NairaNigeria plans to generate as much as $16.4 billion through asset sales in the next four years to reduce the burden on the public budget, a Budget Ministry document showed.

The sales will help to tackle inefficiencies and stem “corruption in public enterprises,” according to the document obtained by Bloomberg, which outlines the West African nation’s 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% 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% increase in this year’s budget to stimulate the economy and help gross domestic product expand by an average of 4.7% annually over four years and reach 7% in 2020.

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

The government targets oil production of 2.5 MMbpd by 2020 to boost export earnings, it said in the document. Output declined to an almost three-decade low of 1.4 MMbpd in August after militants in the Niger River delta region bombed pipelines to demand more benefits from the resource.

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