The Lagos Chamber of Commerce and Industry (LCCI) has advised the Federal and State Governments to liberalise the infrastructure sector by breaking monopolies and securitising corporate assets through public offerings to attract investors.
In a statement released on Sunday titled “Practical steps for boosting revenue and foreign exchange inflows” signed by Dr. Chinyere Almona, the Director-General of the LCCI. The chamber listed multiple recommendations to address the country’s fiscal and financial challenges, including the rise in debt service to revenue ratio, and the moribund assets that do not generate income.
It stated, “The country’s debt situation has become worrisome with debt servicing consuming a significant portion of revenue.
“According to the budget implementation report, the debt service to revenue ratio for January to May 2021 stood at about 98 per cent, an increase from 83 per cent in 2020.
“Nigeria owns hundreds of large state-owned companies, valuable parcels of land, and built structures in prime commercial locations that contribute little to the country’s fiscal and financial situation – because it is not known what their market value is.”
When the chamber was presented with a national asset register, it urged federal and state governments to identify and document their assets.
“Corporate assets like refineries and state-owned enterprises should be securitized through public share issuance, as Saudi Aramco did in its IPO.
“Physical assets could be repurposed and redeveloped for sale to generate revenue, such as idle or underutilised properties.
“Intangible assets like railways, pipelines, and power transmission should be liberalised so that investors can commit equity funds into these sectors.”
“The development of the country’s human capital will require massive investment in skills and talent. The financialisation of Nigeria’s human assets will boost foreign exchange earnings and remittances into the economy.”
The chamber members clarified that their recommendations were not a call to sell national assets securitised but rather advised for implementation of mechanisms to generate more revenue from the assets without a direct sale. The LCCI asserted that this was a more sustainable way to generate revenue and boost foreign exchange inflows.
