. . . As Fiscal Revenue Was 44.6 % Below Official Budget Predictions
The Bureau of Public Enterprises (BPE), Nigeria’s privatisation agency, has disclosed its intention to sell 36 state-owned assets in 2021, as revealed by the Economist Intelligence Unit report for July 2021.
According to the report, the assets to be sold include power-generation plants and free-trade zones, as there are significant shortages in oil and non-oil earnings, resulting in such a massive wave of privatizations.
The report further disclosed that the fiscal revenue was 44.6 % below official budget predictions in the first five months of 2021 and infrastructure investment was considerably below plan.
Part of the reasons for the assets sale is to generate revenue for the government while also reducing operational inefficiencies and increasing competence through private investments.
However, the report further revealed that, on the impact of the privatisation on the Nigerian economy; “privatisation receipts will not compensate for an abysmally low tax take or an over-dependence on oil revenue.
This is just as the report also disclosed that the upcoming budgets to include new taxes or increases to existing taxes, in particular value-added tax (VAT).
“We continue to expect a VAT hike to 15%, a revenue measure that appears unavoidable considering persistent budget deficits. However, we continue to expect fiscal deficits in 2021-25, averaging 2.9% of GDP a year.”