BY EDMOND ODOK – Amid alleged unsatisfactory handling of assigned responsibilities and mismanagement of proceeds thereof, the Ministry of Finance Incorporated (MOFI) says officially taking over the 40 percent Federal Government shares in the Electricity Distribution Companies (DISCOS) is in line with its mandate.
Also explaining that the action is meant to ensure efficiency in running those companies as the government seeks to raise its revenue profile, MOFI had kind words for the Bureau of Public Enterprises (BPE) that held fort on behalf of the federal government in the last 10 years.
A statement titled; “MINISTRY OF FINANCE INCORPORATED (MOFI) – RESTRUCTURING AND RESUMING STEWARDSHIP OF FGN ASSETS FOR ENHANCED MANAGEMENT AND VALUE CREATION”, stated thus; “MOFI’s resumption of its rights of management of the FG’s 40 percent shareholding in the eleven electricity distribution companies and the various equity stakes in related energy sector companies is an essential element of this consolidation.
“It will drive operating efficiency, best corporate governance practices and ultimately maximise the value derived from these electricity assets, in alignment with President Bola Ahmed Tinubu’s economic growth agenda.
“MOFI extends its gratitude to the BPE for its stewardship of these shares. As a reformed and active entity, MOFI is taking significant steps to ensure that these assets deliver full value to the country. We look forward to collaborating with our key stakeholders and, through our concerted efforts, making a tangible impact in contributing to a thriving, resilient, and growing Nigeria.”
Offering further insight on the development, the statement said; “The Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, had last week, issued an order to the Board of Directors of MOFI to terminate the Power of Attorney, POA, granted by MOFI to the Bureau of Public Enterprises, BPE, in 2012, to hold the shares on behalf of the federal government.”
According to the statement; “It should be appreciated that MOFI is a statutory corporation-sole established by the MOFI Act, 1959 (“the Act”). The legislative intendment of the MOFI Act was and remains that the corporation is constituted as the holder and manager of all assets acquired by way of debt or equity capital from the funds of the FGN. Obviously, these assets include the investments in the defunct National Electric Power Authority; which, under the repealed Electric Power Sector Reform Act, 2005 (EPSRA), evolved into Power Holding Company of Nigeria Plc and subsequently unbundled into the various electricity “successor companies”, including the eleven distribution companies (Discos).
“Acting under the Public Enterprises (Privatisation and Commercialisation Act) (“the NCP Act”), 1999, the National Council on Privatisation (NCP), a body in which the Minister of Finance is a statutory member and Vice-Chairman, decided in 2011 that the privatisation of the electricity successor companies would be by the sale of shares. At the time, Nigerian company law did not provide for a single shareholder company hence it was legally impossible for MOFI to be the sole holder of the shareholding of the FGN. This made it necessary that a second entity hold the shares in addition to MOFI.”
The statement also explained the role of BPE saying; “In addition, BPE, as the secretariat of the NCP, was the statutory entity tasked to provide support to MOFI in giving effect to the NCP’s decision. Thus, in 2012, MOFI issued a Power of Attorney to the Bureau of Public Enterprises (“BPE”) whereby BPE was empowered to carry out the actions necessary to fulfill the NCP’s directives and complete the various electricity privatisation (share sale) transactions. MOFI was, also by the same order, to assume ownership, control, and management of all outstanding Federal Government of Nigeria equity in all existing electricity successor companies.
According to MOFI; “The legislative intendment of the MOFI Act was and remains that the corporation is constituted as the holder and manager of all assets acquired by way of debt or equity capital from the funds of the FGN.”
The statement added that in the past 24 months, and “particularly since the amendment of the MOFI Act by the Finance Act, 2023, MOFI has been reformed and restructured from a unit in the Office of the Accountant-General to a full-fledged public sector (FGN) asset management corporation.”
“This arose from the recognition that FGN assets across practically all economic sectors nominally valued at very significant sums were largely moribund or grossly underutilized and poorly managed. Consequently, it was determined in 2021 by the then Minister of Finance, among other relevant decisions, that MOFI would adopt a new, value-driven strategic direction in aggregating and managing FGN assets.”
It said particularly, MOFI: “Would be restructured and repositioned as an active asset management corporation; Would develop a strategy for creating a National Assets Register that aggregates and profiles all national assets and investments; Would develop and implement policies and regulations that ensure the creation and management of assets from debt-related transactions; Would develop and implement policies and regulations that ensure the creation and management of assets from concession-related transactions; and Create a robust pipeline of FG-owned and FG-linked investment opportunities.”
On the whole, the statement said in line with President Bola Ahmed Tinubu’s economic growth agenda, MOFI, as a reformed and active entity, is “taking significant steps to ensure that these assets deliver full value to the country”, adding; “We look forward to collaborating with our key stakeholders and, through our concerted efforts, making a tangible impact in contributing to a thriving, resilient, and growing Nigeria.”
