Listing state assets may be Nigeria’s smartest fiscal bet

Nigeria’s fiscal problem is no longer a distant concern but an urgent test of economic judgement. With a projected deficit of over N31 trillion against a spending plan of N68.3 trillion, the instinctive response of the government has been predictable – borrow more. A growing number of analysts argue that this approach is not just inadequate but fundamentally flawed. Their proposition is both simple and radical. Nigeria should look inward, not outward, to unlock capital by listing its vast state-owned assets on the stock market.

At first glance, the argument carries undeniable merit. The most compelling case lies in the performance of the Nigerian Exchange Limited in recent months. Since the budget was presented, market capitalisation has surged dramatically, creating value that rivals, if not exceeds, the deficit the government seeks to finance. This is not abstract wealth but a signal of investor appetite, liquidity, and confidence in Nigerian enterprises. Ignoring such a signal while accumulating more debt is, at best, a missed opportunity.

“There is also the question of timing. Markets are dynamic, and listing assets during periods of volatility or weak investor sentiment could undervalue them. Government must resist the temptation to treat asset sales as an emergency measure rather than a carefully planned strategy.”

More fundamentally, the proposal reframes how the government thinks about financing. Instead of relying on debt, which must be repaid with interest, listing state assets introduces equity, where investors share both risks and rewards. This shift from borrowing to ownership is not merely technical but strategic. It reduces fiscal pressure, broadens participation in national wealth, and aligns public finance with market performance.

Nigeria is not unfamiliar with this model. The transformation of the telecoms sector following liberalisation remains one of Nigeria’s most successful economic stories. Private capital, driven by ownership incentives, achieved what state control could not (efficiency, expansion and innovation). Similarly, the Nigeria LNG project demonstrated how structured equity participation can unlock long-term value. These precedents strengthen the credibility of the current argument.

Even globally, the blueprint exists, as the listing of Saudi Aramco by Saudi Arabia stands as a defining example of how state assets can be leveraged to transform fiscal capacity. By bringing a national oil giant to the market, Saudi Arabia not only raised capital but also deepened transparency and tied national wealth directly to market growth. Nigeria, with its own portfolio of oil, gas, and infrastructure assets, is not short of comparable opportunities.

The implications of adopting this model go far beyond plugging a budget deficit.

It would fundamentally alter Nigeria’s fiscal structure. With public debt already exceeding $100 billion and debt servicing consuming a significant portion of revenue, continued borrowing risks crowding out development spending. Shifting to equity financing would ease this burden, freeing up resources for infrastructure, education, and social investment.

Also, it would deepen Nigeria’s capital markets. Listing major state-owned enterprises, particularly in oil, power, and refining, would attract both domestic and foreign investors, increase market liquidity, and enhance Nigeria’s standing as a financial hub in Africa. In an economy where capital often sits idle or is trapped in low-productivity channels, this could be transformative.

Likewise, it would impose a culture of transparency and discipline. Publicly listed companies are subject to disclosure requirements, governance standards, and shareholder scrutiny. For many state-owned enterprises long criticised for inefficiency and opacity, this alone could drive significant reform.

However, the argument is not without risks, and pretending otherwise would be immature. Asset listing, if poorly executed, could become a synonym for asset stripping. In a nation with a troubled history of privatisation, there is a legitimate fear that valuable national assets could be sold below value to politically connected interests. Without strong institutions and transparent processes, the policy could deepen inequality rather than solve fiscal challenges.

There is also the question of timing. Markets are dynamic, and listing assets during periods of volatility or weak investor sentiment could undervalue them. Government must resist the temptation to treat asset sales as an emergency measure rather than a carefully planned strategy.

Therefore, Nigeria must adopt a phased and transparent approach to asset listing. Not all state assets should be sold outright; in many cases, partial listings that allow the government to retain strategic control while raising capital would be more prudent. This ensures both national interest and market efficiency are preserved.

Similarly, institutional reform is non-negotiable. Regulatory bodies, including the Securities and Exchange Commission, must be strengthened to guarantee fair valuation, competitive bidding, and investor protection. Without trust, the market cannot function effectively.

Equally, the government must clearly articulate how proceeds from asset listings will be used. If the funds simply finance recurrent expenditure, the exercise would amount to little more than selling the future to pay for the present. Instead, proceeds should be ring-fenced for infrastructure and growth-enhancing investments that generate long-term returns.

Moreover, there must be political will. Listing strategic assets, particularly in the oil sector, will inevitably face resistance from entrenched interests. But reform, by its nature, demands difficult choices. The alternative, an ever-expanding debt burden, is far more dangerous.