FG Reassigns 40% Shareholding in 11 Electricity Discos From BPE to MOFI
Through the Ministry of Finance, the Federal Government of Nigeria has reassigned 40% of its shareholding in the 11 electricity distribution companies from the Bureau of Public Enterprises, BPE, to the Ministry of Finance Incorporated, MOFI.
In a letter dated January 10, 2024, the Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun directed that the Ministry of Finance Incorporated, MOFI should assume ownership, control and management of all equity holding of the Federal Government in the 11 electricity distribution companies.
This means that the Power of Attorney (POA) for the Federal Government’s 40% shareholding in the electricity distribution companies has been transferred from the Bureau of Public Enterprises, BPE, to MOFI.
The MD/CEO of MOFI , Dr. Takang, acting on the directive of the Minister of Finance, stated, “The BPE nominee director on the board of directors of this Company is withdrawn with immediate effect, and share certificates of the Company issued in the name of the BPE are to be immediately withdrawn and cancelled. A new share certificate for all outstanding shares of the FGN in the Company is to be issued in the name of the Ministry Of Finance Incorporated.”
It signals a shift and the provision of clarity on the roles of MOFI and BPE by the Federal Government. Analysts believe the former should manage the Government assets/ Public-Private Partnership arrangements, while the latter should focus on privatisation.
The BPE is the Secretariat of the National Council of Privatization, NCP, facilitating the privatization process, while MOFI is the dedicated entity, consolidating and managing all FGN assets wherever they may be in the world.
Nigeria urgently needs liquidity to build buffers, a strong external reserve, improve foreign exchange inflows, increase revenue for the government and invest more in key areas like infrastructure, education, healthcare, and social investment programmes.
It currently has over 300 assets and enterprises managed by the Ministry of Finance Incorporated, MOFI, with a mandate of managing and optimising them for market value in the economy.
The reconstituted Ministry of Finance Incorporated Board, with Dr Shamsudeen Usman as Chairman and Dr Armstrong Takang as Managing Director by President Bola Tinubu, GCFR, can unlock liquidity to the tune of about N100trn ($100bn), and this can be massive for Nigeria’s investment drive.
MOFI managing the 40% shareholding of the Federal Government in the electricity distribution companies, presents a huge opportunity to leverage the capital market for a guided listing to establish market value. According to economists like Dr Ayo Teriba, CEO of Economic Associates, listing the Discos would improve corporate governance, establish value, boost liquidity and scale operations.
Speaking recently on the WebTV “Economy and Politics” show, Dr Teriba believed it was time for the Ministry of Finance Incorporated, MOFI, to prioritise securing transactions through the “Deal Room.”
“At a time when the country is in dire need of liquidity, MOFI needs to focus on the Deal Room to consummate deals through its assets and enterprises like the Nigeria National Petroleum Company Limited. This would help improve government revenue and boost FX inflows into the country.”
