The Lagos Chamber of Commerce and Industry (LCCI) and the Pharmaceutical Society of Nigeria (PSN) have drummed support for the Federal Government’s plan to sell some national assets to fund the 2021 budget.
The two bodies said there was nothing wrong with the decision as privatisation brings value to idle assets.
They argued that what was important was what assets are to be sold, saying if the assets are idle, it will make sense to sell and convert the proceeds to other forms of assets.
Director General of LCCI, Muda Yusuf, said the expected proceeds from privatisation which is N205 billion, and which contribution to the financing of the budget is 1.5 percent was actually not material.
“The budget size is N7.99 trillion; deficit is N5.60 trillion. The contribution of privatisation proceeds to budget financing is 1.5 per cent. This is actually not material.”
The DG explained that privatisation is not new and had always contributed to the revenue of government, but has not been a significant contributor.
“Privatisation in itself is not a bad idea because it brings value to idle government assets.”
He posited that it also allows for the injection of private capital and expertise to revitalise moribund public assets or enterprises.
Yusuf emphasised that if the choice of asset is guided by good judgement and the process is transparent, there was nothing wrong with privatisation.
“There are government enterprises and assets that constitute a burden to government and to citizens, such enterprises or assets deserve to be privatised.”
For his part, President of the PSN, Sam Ohuabunwa, said it depends on what asset the Federal Government wants to sell and for what purpose.
According to him, the normal economic agents have two forms of assets, which comes either as liquid or solids assets.
“When you are short of liquid asset, you can convert your solid asset to liquid and when you have an excess liquid asset you can convert it to solid asset. That is the way it operates, so the issue is what asset are you going to sell and why.”