Monday, November 22, 2021 / 10.00AM /
Ottoabasi Abasiekong for WebTV / Header Image Credit: WebTV
Nigeria's fiscal challenges can be solved by optimizing idle national assets spread across the country. The CEO of Economic Associates, Dr. Ayo Teriba, claimed while fielding questions on "Nigeria and the Pathway to Sustained Economic Growth."
He said this could be done through the securitization, commercialization or liberalization of state-owned enterprises (SOEs) and assets in the country. According to him, commercialization entails leveraging government-owned properties from real estate to buildings to earn income, where they have been idle and under-utilized.
In terms of securitization, the CEO of Economic Associates cited the example of Saudi Aramco that recently issued a Sukuk leveraging its assets as an area that can be explored.
"Once your assets are in sight, you unlock revenue, achieve debt sustainability and attract equity. Attracting equity is very critical for the economy, and a good example is the NLNG that Nigeria offered 50% stake to the private sector," Teriba added.
He believed that Nigeria needs to be creative in attracting more investments to unlock new revenue streams for the economy.
The economist commended the Federal Government through the National Council on Privatization, NCP, for establishing an Inter-ministerial committee to develop a computerized "National Asset Register."
He decried that Nigeria, 61 years after independence, does not know the assets it owns. Teriba said it was important that the country knows the value of its assets.
He added, "If the financial value of your assets exceeds the financial value of your debt, then your debt is sustainable. It does not matter if it is 500% of GDP; as long as you own more than you owe, you are solvent and liquid".
"Your GDP is the extent to which you can exploit your assets in one year; your sales revenue is the extent to what you can generate from your national and corporate assets."
Dr. Teriba said the economic conversations in Nigeria should move from revenue and debt to how the nation at the Federal, State and Local Government level can optimize its assets to achieve sustainable economic growth.