Bloomberg: Nigeria Weighing Sale of NNPC, Others to Raise Funds

Nigeria is considering selling stakes in about 20 state-run companies in a bid to raise funds and improve governance at the entities, Bloomberg reported on Tuesday.

The Nigerian National Petroleum Company Limited (NNPC) is among firms the government may sell a stake in, according to the chief executive officer at the Ministry of Finance Incorporated (MOFI), Armstrong Takang. 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 the 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).

Some of the entities “need 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 per cent of a high performing entity than 90 per cent of an entity that is under-performing,” he added.

The proposed sales are the latest move by President Bola Tinubu’s administration to overhaul Nigeria’s moribund 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 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.

Nigeria has successfully disposed of some public assets in the past, including the sale of Nigerian Aviation Handling Company Plc, an airport services provider.

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.

Emmanuel Addeh in Abuja

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