The Ministry of Finance Incorporated, MOFI is considering selling stakes in 20 state-run companies in a bid to raise funds and improve governance at the entities.
The Chief Executive Officer of the Ministry of Finance Incorporated, MOFI, Armstrong Takang, said that the Nigerian National Petroleum Company Limited, NNPC, is among the firms the government may dispose of some of its shares. MOFI is a state-owned asset management company.
The agency is considering options including strategic sales and initial public offerings and aims to implement the plan within 18 months, he told Bloomberg in a phone interview.
Before now, the Federal Government through the Bureau of Public Enterprises, BPE, had said that it had so far generated N1 trillion from the sale, commercialisation, and concession of 234 public assets in the past 32 years.
BPE’s Director General, Mr. Alex Okoh, disclosed that a breakdown of the 234 assets involved from the time of the defunct Technical Committee on Privatisation (TCPC) in 1989 to the creation of the BPE in 1999 showed that the agriculture sector accounted for 32 while in the banking and finance sector, they were 31.
The cement industry had 15, energy construction and services were 14, hotels and tourism had 13, industry and manufacturing produced nine sold assets and oil and gas 13. Others were ports (31), power (24), mines, and steel (38), automobile (eight), paper and packaging (four) as well as sugar (four).
home of the entities “need the private sector to take controlling shares,” Takang told the news medium, adding that the major consideration for the government was to create value rather than retain control.
“It is better for us to own 49 percent of a high-performing entity than 90 percent of an entity that is underperforming,” he added.
The proposed sales are the latest move by President Bola Tinubu’s administration to overhaul Nigeria’s economy. Since taking over in May, Tinubu has ended costly gasoline subsidies and is revamping the nation’s multiple exchange-rate system. Nigeria’s dollar bonds due in 2047 have rallied since his inauguration.
Founded in 1959, the MOFI manages Nigerian government investments in about 130 assets across sectors such as infrastructure, financial services, energy, and industries, according to its website. Former President Muhammadu Buhari in January appointed new management led by Wale Edun, who is an adviser to Tinubu.
The agency is in the process of appointing consultants including valuers, financial advisers, lawyers, bankers, and others to handle different aspects of the transactions, Takang said.
However, some of the sales haven’t met expectations, particularly in the power sector. Nigerian regulators and banks have taken over companies that account for more than half the West African nation’s electricity grid after they failed to pay their debts, the report said.