Nigerian Govt Could Make Over $17 Billion From Sale of Oil Assets - JP Morgan

JP Morgan Chase, one of the biggest banks worldwide, has revealed that the Nigerian Government could make over $17 billion from the sale of oil assets.

The money lender stated that Nigeria which is Africa's biggest economy is making a good move in the process of unlocking the $17 billion for asset sales—this move is taken to cushion the pressure on the Nation's economy which has suffered due to its FX liquidity.

It stated, 

• The authorities are in the initial stages of identifying assets for sale, which may provide some medium-term relief

• 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.

The FG plans to sell idle government assets which in total will cost about N180 trillion if converted to naira.

From the findings, over 70 entities have been identified in the national asset register and have been government idle projects according to the Ministry of Finance Incorporated (MOFI), whose job is to build a database that will enable the FG to source out for urgent funding.

Also, JP Morgan Chase said that the $3bn loan given to the Nigerian National Petroleum Company Ltd will help strengthen the FX liquidity.

It added,

• 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.

• That being said, the large external financing needs of the private sector will sustain FX pressure.

Back Story

Recall that Investingport reported that the CBN in collaboration with the Federal Government of Nigeria is looking for ways to stop the devaluation of the naira. Also, last week after the meeting with Mr. President, Mr. Folashodun Shonubi said in a meeting with State House journalists that measures are coming shortly to cushion the fall of the naira. 

He also said that speculators of the naira will lose if the policy is put out. After that day, two directives were given which are;

• The compulsory filing of the 'Form M' by anyone intending to import physical goods into the country. Through the process, one will see how much they traded the local currency to that of any foreign currency. This measure will give transparency in forex transactions which the CBN believes will stop the devaluation of the naira.

• The CBN released a circular that gave forex transaction limits to Bureau de Change operators to -2.5% to +2.5% of the Nigerian Foreign Exchange Market window.