JP Morgan, a global investment bank, has revealed Africa’s biggest economy is upping its game in a bid to unlock $17 billion from asset sales, a move aimed at relieving pressure on the country’s struggling FX liquidity.
“The authorities are in the initial stages of identifying assets for sale, which may provide some medium-term relief,” JP Morgan said in its latest report about Nigeria.
It added, “For example, the President’s policy advisory council has recommended the government sell down its stake in the most joint-venture oil and gas assets, a proposal that is estimated to bring in up to US$17bn.”
BusinessDay had earlier reported Nigeria plans 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.
JP Morgan said the recently announced $3bn loan to Nigerian National Petroleum Company Ltd could help partly improve FX liquidity conditions in the market.
“We expect NNPC to sell the dollars to CBN and remit the naira proceeds to the government as upfront payments for oil revenues and taxes,” JP Morgan noted.
“That being said, the large external financing needs of the private sector will sustain FX pressure,” it concluded.
Source: Norvanreports