The Bureau of Public Enterprises (BPE) has announced its intention to divest the remaining 40% of shares owned by the Federal Government in electricity distribution companies (discos) and four additional assets by the year 2024.
During a media discussion in Abuja on Tuesday, Mr. Alex Okoh, the Director-General of BPE, detailed the forthcoming sales, which are set to be carried out through Public Offerings (IPO) on the capital market.
The assets scheduled for divestment encompass Eleme Petrochemicals Company Limited (EPCL), Nigeria Reinsurance, Nicon Insurance, and Nigeria Machine Tools in Osogbo.
Mr. Okoh acknowledged the existing challenges associated with the ownership structure of the discos, underscoring the government’s commitment to promptly address these issues.
The principal aim of the divestment is to generate funds for the Federal Government, thereby contributing to the partial financing of the 2024 budget.
Highlighting their state of readiness, BPE has concluded plans to sell the government’s 40% stake in Nigeria Reinsurance, Nicon Insurance, and Nigeria Machine Tools in Osogbo through Initial Public Offerings (IPO) on the capital market.
This strategic initiative was formally introduced by Director-General Alex Okoh during a media chat held in Abuja on Tuesday, marking a significant stride toward the government’s financial objectives and the continuous consolidation of its holdings in various enterprises.
MATRIX reports that BPE had disposed off 60 percent of equity in the five enterprises to core investors, leaving the government with a 40 percent balance.
Okoh disclosed: “The reception of the ideology of privatization is making more sense and gaining more ground under the current administration than the previous one.
“In the past six months, you can count the number of trips and visits the president has made to seek Foreign Direct Investments, FDI, for the economy and create an enabling environment for these investments to locate the opportunities locally.
“IPO through the capital market is a very credible strategy for us. Once we can resolve a few changes we are having now, especially ownership challenges with some discos, we resolve to sell. So the capital market, yes, once we resolve the 40 percent ownership in the discos, once we are done with the discos, we also plan to take Eleme petrochemicals to the market; we had also planned to take Nigerian Reinsurance to the market, and Nicon Insurance to the capital market. Of course, we started but had problems with a core investor, Jimoh Ibrahim. So, many issues are involved in taking some of these entities to the market. Nigeria Machine Tools, Oshogbo, is also slated for the capital market.
”He continued: “On all fronts, we expect a more active year in 2024 for the BPE, and every step of the way, both in terms of educating the public and also helping us to navigate various stakeholder concerns.”Wumi Iledare, Professor Emeritus and Executive Director of the Emmanuel Egbogah Foundation reacted and lauded the idea but urged that the process not be driven solely based on political expediency.
Hear him: “Great idea, but the disposition of government assets must not be driven solely based on political expediency. Technical and financial competence in a transparent, competitive, and accountable manner must be evident,” he said.
