Lagos Chamber of Commerce and Industry has proposed practical steps that Nigeria could tap to boost revenue generation and foreign exchange inflow. In a statement signed by the Director General Lagos Chamber of Commerce and Industry Dr. Chinyere Almona, FCA said “the Chamber wishes to propose to the Government at both federal and state levels the following recommendations “Nigeria needs to do an official identification of its assets in terms of location, purpose, and usage contained in a national asset register. There are four types of assets namely: corporate assets, such as refineries, state-owned enterprises; physical assets, such as government land and built structures; intangible assets – such as the GSM licensing and pension funds; human capital – a national pool of high-return skills.
“An asset register that provides detailed information about Nigeria’s assets at national, state, and local government levels must be created. According to the Chamber “Corporate assets should be securitised via public share issuance to raise equities. A typical example is Saudi Aramco’s IPO of 2019 where $25.6 billion was raised after the oil firm sold a 1.5 per cent stake to private investors, thereby establishing the value of Aramco to be over $2 trillion. Continuing it said that physical assets such as idle or under-utilised properties could be repurposed and redeveloped for commercialisation to generate revenue. Typical examples are what the United Kingdom has done with its inner-city prisons as well as the United States’ conversion of military bases into great commercial places through the Base Realignment and Closure Commission (BRAC) and has created a separate agency to manage its thousands of real estate portfolios. It said that intangible assets such as breaking government monopoly in the infrastructure sector (railway, pipelines, power transmission) should be liberalised for investors to commit equity funds into these sectors. A typical example was the liberalisation of the telecoms sector that incentivised investors to purchase GSM licenses.
It also said that the government should undertake massive investment in skill and talent development to increase the pool of the country’s human capital. The financialisation of Nigeria’s human assets will boost net foreign income and remittance inflows into the economy. A typical example is how the Philippines is training its doctors, nurses, technicians, to enable them to export their services to foreign countries. From a valuation standpoint, assets can be broadly classified into (a) financial and (b) non-financial assets. Financial assets have established market values while non-financial assets refer to those assets with unknown market values. However, most of Nigeria’s assets fall in the non-financial category because the market values of its assets are unknown. As such, they cannot be securitised to raise debt/equities or commercialised to generate revenue.
It said that funds could be raised through the Creation of a dynamic online digital platform where the financialised and commercialised assets can be offered for investment. This platform will avail private investors of relevant investment opportunities in those assets. Typical examples include Brazilian Partnership for Private Investment (PPI) and the Invest India websites.The Chamber hereby wishes to clarify that the recommendations above do not connote the sale of national assets but a mechanism to generate more revenue from the assets without their outright sales. This is a more sustainable way of revenue generation and boosting foreign exchange inflows. In the coming weeks, the Chamber will be engaging with all relevant stakeholders to discuss implementation mechanisms.
She said “Nigeria is an asset-rich nation owning hundreds of large state-owned companies, valuable parcels of land, and built structures in prime commercial locations. These assets are grossly underutilised and contribute too little to the country’s fiscal and financial situation because their market values are currently not known. There is, therefore, a need for government to take urgent steps to establish the market values of the assets, securitise the corporate assets and commercialise the real estate assets to raise revenue for the government and foreign exchange inflows for the country. There is a need to replace existing debt stocks with asset-linked debt to ease the debt servicing burden; attract greenfield FDI into publicly-listed state-owned companies; generate new revenue streams from commercialised real estate portfolios.
