Business and Economy

Federal Government to Sell 36 Assets to Boost Revenue as Earnings Fall

The privatization agency in Africa’s largest economy plans to sell or allow private investors to manage 36 state-owned assets to boost government revenues that have come under pressure from lower oil earnings.

Two free economic zones in the northern city of Kano and Calabar in the oil region as well as power generation plants are among assets marked for sale or concession, Alex Okoh, director-general of the Bureau of Public Enterprises said on Tuesday.

The power plants have the capacity to add 3,300 megawatts to the nation’s electricity generation, while the economic zones will boost export earnings by about $2 billion over the next five to seven years, Okoh said.

Oil earnings in Africa’s top crude producer fell short of target by 49.5% in the first five months through May, the Ministry of Finance, Budget and National Planning said in a report Tuesday. Non-oil revenue also fell below expectation by 24.9%, it said. The privatization will help attract capital to revamp the assets and raise cash to support the government amid declining budget income.

Moody’s Investors Service said in November that Africa’s most populous country requires at least $3 trillion investment over 30 years to close an existing infrastructure gap.

The agency is collaborating with the World Bank to develop about 100 projects to make them attractive to private investors, Amaechi Aloke, director of infrastructure and public private partnership at the BPE said. The projects, which are in the oil and gas, communication, agriculture, water resources, housing and transport sectors, will be presented to potential investors at a virtual conference in September, Aloke said.

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