The Minister of Finance and Coordinating Minister for the Economy, Mr. Wale Edun, unveiled plans in Lagos yesterday to harness the nation’s assets, aiming to generate approximately $13 billion in annual revenue.
Edun shared this during the launch of the Afrinvest 2023 Nigerian Banking sector report.
Represented by Mr. Armstrong Katang, the Managing Director/Chief Executive of the Ministry of Finance Incorporated (MoFI), Edun outlined the plan, which involves cataloging all national assets, implementing governance measures, and optimizing asset monetization.
Expanding on the strategy, Edun explained that this approach would be facilitated through the creation of a National Assets Register by MoFI. The register will be utilized to generate revenue equivalent to 3.0 percent of the nation’s Gross Domestic Product (GDP) or $13.3 billion.
Edun also indicated that the aforementioned strategies will be instrumental in elevating the value of the Ministry of Finance Incorporated’s (MoFI) National Assets Under Management (AuM) to N100 trillion, a significant increase from the current value of N18 trillion.
The Minister emphasized that these initiatives are part of a comprehensive plan to enhance Federal Government revenue, aiming to achieve a Revenue to GDP ratio of 25 percent by 2026, compared to the current 8.0 percent.
In underscoring the role of MOFI in reaching the Revenue to GDP target, Edun remarked,
“We have properties that are lying fallow around the world, not being used. In fact, they’re liabilities. That has to change. You cannot be renting a property in the same city for $20,000 a month, whereas you have another property in another city lying fallow and wasting away. You live in Lagos, go to the Central Business District, CBD, close to Tafawa Balewa Square, TBS, most ministries have their buildings there. How do you let such prime properties in the neck of the world dance? And we say we don’t have money. Nigeria is too blessed to be poor.”
“I did say that our target is to grow our AUM to $100 trillion. In fact, every day, the more I do this work, the more confident I am that it can be done and it will be done, because we do have the assets. At the moment, my chairman here mentioned that $18.3 trillion, and I just reminded him that that was based on the old exchange rate. That does not include our concessioned assets. It does not include any of our real estate assets.”
This does not encompass any of our infrastructure assets.
“So for us, our strategy is very simple. The first thing is to enumerate all the assets that we own across the different asset classes.”
“After we do that, second is we introduce governance, because we believe governance is fundamental in value creation. And then thirdly, monetization and optimization, which would also include rationalization. ”
“There is evidence that if we succeed in creating a national assets register, and we put the policies and the regulation in place, two things can happen. One is that the revenues that will come from just that effort are equivalent to 3%, or can be up to 3% of your GDP. Let us suppose for the purpose of this exercise that our GDP is $450 billion. So you’re talking about $13.3 billion extra revenues per year that can come from that exercise.”
“The second is that the AUM of those assets that are put together could be up to two times your GDP. ”