Dr. Ayo Teriba, the CEO of Economic Associates, advocates for non-debt financing strategies using asset-based methods to address Nigeria’s budget deficit anticipated for 2025. He emphasizes unlocking state-owned asset value and adopting equity financing as vital steps to meet infrastructure needs without increasing debt. Teriba recommends initiatives like IPOs to raise capital while enhancing the financial viability of government enterprises.
Dr. Ayo Teriba, CEO of Economic Associates, advocates moving towards non-debt financing strategies to manage Nigeria’s anticipated budget deficit in 2025. In a recent interview with Arise News, he emphasized the need to unlock the value of state-owned assets, using equity-based financing as a means to meet the nation’s infrastructure demands without accruing additional debt. He stated the Nigerian National Petroleum Company (NNPC) has no intrinsic market value; its profitability hinges solely on its ability to sell oil or gas.
Teriba highlighted that taking initial steps, such as conducting an Initial Public Offering (IPO), could effectively leverage these assets for capital generation. He underscored that asset financing does not entail asset liquidation, but rather the opportunity for external investors to help realize the government assets’ full potential. He reiterated that the focus should remain on non-debt financing solutions, showcasing asset financing as a viable pathway for budgetary needs.
He also pointed out the underperformance of state-owned enterprises like the NNPC and emphasized the necessity of adopting asset-based funding strategies by the government to enhance these entities’ performance. Notably, he remarked, “It’s time to encourage the government to travel down this lane. NNPC has no market value; it’s only if you sell oil or gas that you can make money from NNPC.”
Teriba proposed that a limited IPO would enable the government to showcase and monetize the market value of these corporations, thereby facilitating capital-raising through asset finance. He noted the contradiction in Nigeria’s economic framework, mentioning that important national companies are underutilized despite the government’s attempts to boost a dynamic equity market.
In discussing infrastructure financing options, Teriba argued that many infrastructure projects could be self-sustaining if the government adopted equity-based funding mechanisms. He concluded by emphasizing the need for the government to consider investment-grade avenues for financing infrastructure, highlighting that many projects possess the potential for financial viability if funded appropriately.
The proposal for non-debt financing in Nigeria comes amidst growing concerns over the nation’s budget deficit, projected for 2025. As economic pressures mount, experts like Dr. Ayo Teriba suggest innovative solutions to bridge funding gaps while minimizing the burden of debt. By focusing on state-owned assets and equity financing, Nigeria could potentially enhance its financial landscape, promote sustainability in infrastructure development, and stimulate economic growth without increasing reliance on borrowing. This approach aligns with the global trend of utilizing public assets to attract private investment, particularly in an era marked by fiscal constraints and a need for innovative funding strategies.
Dr. Ayo Teriba’s advocacy for non-debt financing through asset-based strategies presents a pragmatic solution for managing Nigeria’s budget deficit in 2025. By leveraging the potential of state-owned corporations and infrastructure through equity financing, the government could unlock substantial economic value without incurring more debt. Encouraging an IPO and fostering private investment in government assets could lead to sustainable development, a reinvigorated equity market, and improved infrastructure financing options. Teriba’s insights underline the critical need for innovative funding mechanisms in Nigeria’s fiscal strategy.
Original Source: www.arise.tv
