According to a Punch News report, the Nigerian government has commenced the compilation of the list of assets to be either sold or monetized via a concession to part finance the budgeted N10.78trn deficit for the 2023 fiscal year. According to the report, sources at the Ministry of Finance, Budget and National Planning said the government is considering the sale or concessioning of the Tafawa Balewa Square in Lagos as well as all the National Integrated Power Projects in Olorunsogo, Calabar II, Benin (located at Ihorbor), Omotosho II and Geregu II. Also, included in the target are the hydro power plants across the country, including Oyan, Lower Usuma, Katsina-Ala and Giri plants. The report noted that more than 25 of such projects will be turned into active assets that will be generating money in some ways for the Federal Government. Some of them will be offered to investors for equity while others will be totally sold to reduce waste. The government is also considering revenue from Calabar and Kano free trade zones as well as Abuja Water Board, Aluminium Smelter Company of Nigeria, National Film Corporation, National Theatre and Lagos International Trade Fair while also planning to relinquish the ownership of some of the basin authorities to the private sector. 

The Federal Government plans to raise N206.18bn from privatization proceeds to partly finance the 2023 budget deficit. The proposed sale of these assets will be the latest major privatization exercise following the privatization of the assets of the Power Holding Company of Nigeria in 2013 which has left little to be desired. Past privatization exercises have yielded mixed results especially when the viability of the assets and the post privatization efficiency are considered. According to the Nigerian Electricity Regulatory Commission (NERC), the generation sub-sector presently includes 25 grid-connected generating plants in operation with a total installed capacity of 12,543MW (available capacity of 5,465.72MW as at Q4 2021). Meanwhile, based on data obtained in 2021, NERC reported that power distribution in the year, averaged 4,094.09MW despite available generation capacity of about 8,000MW. The constant grid collapse and power failure till date coupled with the continuous heavy reliance on the Federal Government’s power assurance facility and other FGN bailout funds is a testament to the post privatization failure of the power sector. 

There have been previous attempts to privatise a few of the assets listed above, including the National Integrated Power Projects (NIPP) assets, which elicited significant investor interest but was eventually unsuccessful due to a few technical. issues and bankability concerns arising from the documentation provided by the Federal Government to bidders for the assets. In our view, beyond the immediate sale of assets to raise funds, it is critical to ensure post privatization efficiency in the respective sectors. It is also essential for potential investors to engage skilled and experienced advisers and partners.