Home Business & Economy BPE favours privatisation to borrowing to fund budget

BPE favours privatisation to borrowing to fund budget

BPE expedites initial public offer

UGO AMADI

The Director General of Bureau of Public Enterprises, BPE, Alex Okoh, has said that the fiscal policy will do better from raising budgetary funding from privatization.

Affirming that the BPE is anticipating to generate N300 billion into the 2018 budget through the sale of some national assets amidst on-going controversy over Nigeria’s debt sustainability.

This also came as the Minister of Information and Culture, Alhaji Lai Mohammed, put annual cost of maintaining public enterprises in Nigeria at USD3 billion (about N1.1 trillion).

Speaking at a Stakeholders’ Media Interactive Forum on the privatization programme of the Federal Government, Okoh stressed that the activities of the bureau is primarily to diversify the economy and strengthen the private sector as Nigeria’s engine of growth and economic driver

According to him “”We are to ensure that government concentrates resources on core functions and responsibilities of government, thus improving efficiency and reduce waste in the public sector.

He confirmed that the anticipated assets that could generate the funds include the Afam Power Plant, National Independent Power Projects, re-privatization of the Yola Distribution Company, River Basin Development Authorities and the National Parks.

So far, he said 142 companies have been privatized since the inception of the privatization programme.

Okoh expressed the view that budgetary funding by debt instrument was bound to put financial burden on the economy, but indicating that if privatization was pursued with necessary supports from all stakeholders the revenue from the exercise would have adequately funded capital expenditure unencumbered by debt overhang.

Earlier, Lai Mohammed lamented that despite the massive investments and great expectations, public enterprises have failed to live up to expectations. He stated: “They consumed large proportion of resources without providing commensurate services.

He noted that the Federal Government is implementing critical reforms and privatization in key sectors of the economy to address the abysmal failure of public enterprises and halt the drain on the treasury.

More importantly, they failed to allocate their resources efficiently, even as they consumed USD3billion annually, by way of grants, subsidies, import duty waivers, tax exemptions, etc”. He stated

The minister who is also the chairman of the NCP stakeholders engagement committee, further justified the need for privatization saying, “the introduction of economic reforms and privatization by successive governments were deliberate and necessary responses to address the abysmal failure of public enterprises and to halt the unsustainable drain on the treasury, given the limited resources of the government”

He said there are ongoing reforms and privatization in various sectors of the economy, including Communications, Development Finance Institutions, the Nigerian Commodity Exchange, Federal Mortgage Bank of Nigeria, Federal Housing Authority, National Parks and the River Basin Development Authorities.

The Power and the Postal sectors, Federal roads, Railways, National Inland Water Ways and a host of other enterprises are also slated for reforms and privatization.

The Minister said the Bureau of Public Enterprises (BPE) had initiated and executed far-reaching reforms in the Communications, Pensions, Sea Ports, Debt Management, Solid Minerals as well as the Power sector reform that led to the unbundling and privatisation of the successor companies of the Power Holding Company of Nigeria (PHCN).

“Some of these reforms led to the establishment of regulatory and other agencies such as the Nigerian Communications Commission (NCC), Pension Commission (PenCom), the Nigerian Electricity Regulatory Commission (NERC), Debt Management Office (DMO), Nigeria Electricity Liabilities Management Company (NELMCO), and the Nigeria Electricity
Bulk Trader (NBET),” he said.

Alhaji Mohammed said the BPE has drafted eight reform bills that, when passed, will liberalise the relevant sectors and lead to the setting up of appropriate regulatory agencies to create the much-needed conducive and enabling environment for private sector investments.

He listed the bills as the Railway Bill; the Inland Waterways Bill; the Ports and Harbour Bill; the Federal Roads Authority Bill; the National Roads Fund Bill; the National Transport Commission; the Competition and Consumer Protection Bill and the Postal Bill.

The Minister sought the buy-in of the media for the reform and privatisation programme in order to assuage the mixed feelings the reform has generated as well as restore public confidence in the programme.

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