Nigeria steps up bid to unlock N180trn dead assets

Nigeria is upping its game in a bid to unlock the N180 trillion trapped in dead or idle government assets as a renewed hunt for cash heats up.

Over 70 entities have been captured in a national asset register that aims to identify the country’s vast and mostly idle assets, according to the Ministry of Finance Incorporated (MOFI), whose work it is to build the critical database that will help unlock badly needed cash for the government.

“A list of corporate assets (just over 70 entities) have been identified and preliminary data captured for them,” Armstrong Takang, managing director of MOFI, which has set a target of raising N100 trillion from the country’s idle assets, said in an emailed response to BusinessDay.

“With the help of experts and consultants in the relevant fields, we are in the process of carrying out the due diligence on these entities,” Takang said.

Nigeria has as much as N180 trillion trapped in dead assets mostly in real estate, according to PwC’s estimates. Unlocking that capital could be a game changer for a cash-strapped government whose debt service cost is forecast by KPMG, a consulting firm, to gulp 100 percent of its revenues this year, up from 96 percent in 2022.

CBN’s illegal financing of FG ushers in worst fiscal crisis in Nigeria

Analysts say Nigeria’s high debt service cost is more a reflection of the government’s low revenues than the size of its outstanding debt.

One of the measures being taken to grow revenues is reviving dead assets through the National Asset Register, which will contain all the assets owned by the federal government. The work entails identifying the assets, undertaking due diligence to verify and authenticate the federal government’s shareholdings and ascertaining the status and condition of the assets.

The register is being developed to serve as “that single source of truth on assets owned by the government,” Takang said.

The critical work has been broken into phases, based on asset classes, according to Takang.

The current asset classifications are six and include Corporate Assets (including FGN’s shareholding across various entities), Concession Assets (including assets for which economic rights have been concessioned, but ownership remains with the FGN) and Energy and Extractives (including oil and gas, and solid mineral assets).

The other asset classes are Fixed Assets (including real estate and other fixed assets), Financial Assets (including FGN receivables) and Intangible Assets (including rights of way, easements, patents, and trademarks).

“MOFI has made significant progress in the first phase, which has focused on the corporate assets and is in the early stages of phase two which includes the concession assets, and energy and extractive assets,” Takang said.

Several countries from India to Singapore are now able to get the most from their assets thanks to the creation of an entity charged with the sole responsibility of managing state assets and constantly updating a national register that has opened the countries up to private capital.

Temasek, for instance, is a state-owned company that was set up by the Singaporean government to hold and manage the assets previously held directly by the Singapore government. The goal was for Temasek to own and manage these investments on a commercial basis, allowing the Ministry of Finance to focus on policy making.

Since its creation in 1974, Temasek has quickly become a global investment company with a net portfolio value of $287 billion as of March 2023, according to data from the company’s website.

Nigeria is so broke yet so rich and could do with a Temasek of its own, a gap MOFI is now looking to plug.

Nigeria earns far less than its peers despite boasting superior resources. As at the end of 2022, the country’s total revenues was 4.49 percent of GDP, more than five times less than South Africa’s 27.3 percent.

MOFI’s success not only holds significant implications for Nigeria’s revenue profile but also its poor people who equate to the populations of Spain and Canada combined.

If Nigeria leveraged the $900 billion lying fallow in dead capital, it could lift 93 million of its people out of extreme poverty, create jobs and rely less on expensive borrowing, according to Andrew Nevin, a former chief economist at PwC.

“We are currently reviewing the portfolio of assets, and looking at opportunities where we can extract, leverage value, and raise capital,” Takang said.

“The goal is to sweat these assets and generate cash flows that contribute profits and resources to support the FGN’s revenue and help achieve economic and social development,” he said.