A recent Bloomberg report suggests that the Nigerian Federal Government is contemplating the sale of ownership interests in roughly 20 state-run enterprises as a strategy to raise capital and enhance operational effectiveness within these entities.
Among the candidates for stake sales is the Nigerian National Petroleum Corporation, as indicated by Armstrong Takang, the Chief Executive Officer of the Ministry of Finance Incorporated.
The government is evaluating various options, including strategic sales and initial public offerings, with the intention of executing this plan within a span of 18 months.
Value creation
The emphasis lies on optimizing value creation rather than maintaining control, and Takang articulated that private sector involvement, particularly in controlling shares, is deemed beneficial for several entities.
He illustrated this point, saying, “It is better for us to own 49 per cent of a high-performing entity than 90% of an entity that is underperforming.”
This strategic move coincides with President Bola Tinubu’s overarching economic reform agenda. To facilitate these transactions, the agency is actively engaging consultants encompassing valuers, financial advisors, legal experts, bankers, and others.
Back in October 2022, sources from the Ministry of Finance, Budget, and National Planning hinted that the government was exploring the possibility of selling or leasing around 27 national assets.
This proposed divestment encompasses notable assets such as the Tafawa Balewa Square in Lagos and various hydropower plants across Nigeria, among others, with the intent of transforming them into revenue-generating assets for the government’s benefit.
The inclination toward selling national assets to bolster revenue has been contemplated since 2016.
