By Babajide Komolafe
THE federal government should use the stock market to privatise commercially viable national assets as well as consider the option of issuing non-interest bonds, or project-tied bonds as measures to raise low cost funds to finance the Economic Recovery and Growth Plan (ERGP).
Professor of Economics and Executive Chairman, African Centre for Shared Capacity Development Building, Professor Olu Ajakaiye, made these recommendations, yesterday, while speaking at the second annual The Bullion Lecture organised by the Centre for Financial Journalism.
Ajakaiye, who was the guest lecturer, spoke on “Low cost Options for Financing Nigeria’s economic Recovery and Growth.” He stressed that Nigeria is experiencing stagflation, which is marked by high inflation, low employment and negative growth, and this makes it necessary for the federal government to pursue low cost measures to financing the N73 trillion investments envisaged in the ERGP.
He added that this is also important to avoid future foreign debt over-hang, as well as undermining the ability of the private sector to mobilise funds to finance part of the investment in the plan. He said that among other things, the FG should consider using the stock market to privatise commercially viable national assets. “Government should list all of its commercial enterprises on the stock exchange (SE). This way, government portfolio can be divested to the general public, including foreign investors and avoid the controversial and sometimes questionable privatization arrangements. In that case, government divestment can be instrumental in mobilizing financial resources to support worthy development activities, including infrastructure projects.