FG targets commercialisation of moribund corporate assets to boost domestic revenue
…Laments non-payment of dividends
…Urges Nigerians in Diaspora to make domestic investments to boost FX liquidity
…As Tinubu moves to secure multi-billion dollar infrastructure finance facility from Islamic Development Bank
The Federal Government has disclosed its intention to revive and commercialise moribund corporate assets of the Government to boost the nation’s domestic revenue.
Chief Executive Officer, Ministry of Finance Incorporated, Dr. Armstrong Takang made this known at the launch of the Nigerian Banking Sector Report, which was unveiled in Lagos yesterday by Afrinvest.
Dr Takang who represented the Coordinating Minister of the Economy and Finance, Mr Wale Edun noted that the government took the right step by instituting forex reforms and freeing forex previously used to defend the naira.
He said the Federal Government had in the past, lost so much forex trying to defend the naira, adding that the implementation of the ‘willing buyer, willing seller’ model has preserved forex for the economy.
He said that in its effort to unlock forex liquidity, the Federal Government is encouraging people with genuine forex to bring them back home for investment in the domestic economy.
He said many of the corporate assets are not paying dividend to the government, and that has led to revenue loss.
He said, “The International Monetary Fund advised us that domestic resource mobilisation is key in our plan to boost revenue. Also, many of our corporate assets have not been paying dividends. We have oil and gas assets that are not performing optimally and that has to stop. We need to optimise assets lying dormant to boost capital position.”
The report said there was need for new Central Bank of Nigeria (CBN) leadership to be geared towards reversing the unorthodox policy measures of the last administration, restoring market confidence in the CBN’s autonomy, and prioritising the core goals of price and exchange rate stability.
“Nonetheless, we believe that achieving all of these in a short-term would be a herculean task, given that complementary fiscal policy actions are required for the CBN to record gains,” it said.
“In the meantime, we canvass that the authorities double down on efforts to check insecurity, curb oil theft, tame inflation, anchor market yield on Monetary Policy Rate, and improve the business environment. Also, we believe that the sustained high demand for FX in the parallel market due to lingering weak supply in the official market coupled with inefficient processing time, would continue to undermine the objective of these measures.
“As regards the impact of the measures on the banking industry, we expect the re-introduction of the willing buyer, willing seller model to support a modest positive upside for the FX transaction income of banks going forward,” the report read.
The panelists at the event include Amal Hassan, Founder/CEO, Outsource Global; Robert Dickerman, Chief Executive Officer, Pinnacle Oil & Gas; Odunayo Eweniyi, Cofounder/Chief Operations Officer, Piggyvest; Anthony Okungbowa Esq., Head of Service, Edo State Government and Sadiq Kassim, Director, Corporate Affairs, TGI Group, all called on the government to take steps that will boost government revenue earning capacity and boost food security through support for the agricultural sector.
A part of the Banking Sector Report recommended that: “As the new CBN leadership takes over, Nigerians and the banking industry are on the lookout for a positive and timely turnaround of stifling banking regulations and major monetary indices – exchange rate, inflation rate, and Foreign Portfolio Investment & Foreign Direct Investment flows,” the report said.
The report also provided highlights of the 2022 Nigerian Banking Sector report themed “Brace for Impact” which coincided with the onset of fresh global risks as the receding COVID-19 pandemic left deep footprints.
“This evolution of risks shifted focus from economy-stimulating policies to the introduction of guard rails for overheating economies. Specifically, the emergency adoption of the Modern Monetary Theory playbook in response to the pandemic dovetailed into a glut of financial liquidity. Although the broad stimulus deterred prolonged global recession, the absence of a commensurate productivity boost drove real and financial sector prices higher and threatened real output recovery,” it said.
Meanwhile, President Bola Ahmed Tinubu, Monday evening, in Mecca, Saudi Arabia has advanced negotiations concerning a multi-billion dollar infrastructure finance facility from the Islamic Development Bank to fund a multi-sectoral portfolio of infrastructure projects at the federal and sub-national levels in Nigeria.
President Tinubu in a statement issued by his Special Adviser on Media and Publicity, Chief Ajuri Ngelale was quoted as saying, “Nigeria is the candle of hope that will light the way for Africa. And once Africa is illuminated, the world will be a brighter place for all of humanity. We are determined to create a future for our gifted youths. Investments in Nigeria will be among the world’s most high-yielding. Investor money will flow easily in and out of our country. Processes will be seamless. And your bank has always been a faithful partner in progress.
“We have serious deficits in port infrastructure, power infrastructure, and agro-allied facilities that will enable sustainable food security in our country. These deficits present unrivalled opportunity for savvy investors in a market that is by far the largest on the continent. Yes, we had the vision to enable Lekki Deep Seaport before others saw it. We must be bold again.
“We inherited serious liabilities, but also assets from our predecessors. We do not make any excuses. There are several sectors replete with investment opportunities for smart investors. Access to finance and guarantees can be a hindrance in some cases. You can come in there. We see you as a critical enabler. You have partnered with us before. We want to scale it up now and do much more with greater ambition and clear vision,” the President stated.
Responding, the Vice-President of the Islamic Development Bank said the financial world has been monitoring events in Nigeria and has concluded that Africa’s largest economy means business this time.
“Mr. President, we know you inherited a very tough set of circumstances. It is to your credit that you have taken very bold steps without delay. We are ready to work with you. We are ready to support big investments in Nigeria. We agree that if Nigeria succeeds, Africa succeeds. And the world needs Africa to succeed.
“The Islamic Development Bank President announced the provision of $50 billion U.S. Dollars of new investment for the African continent from the Arab Coordination Group (ACG). This was announced at the Saudi-Arab-African Economic Summit. As the largest market and the largest economy in Africa, Nigeria will certainly receive a significant share. We look forward to supporting Nigeria’s economic transformation,” the Islamic Development Bank Vice-President said.
Members of the Nigerian delegation present at the meeting in Mecca were: Governor Bala Mohammed of Bauchi State; Governor Dikko Radda of Katsina State; Governor Umar Bago of Niger State; Minister of Budget & Economic Planning, Senator Atiku Bagudu, and others.
