MOFI identifies N25tn in public assets, pushes for better oversight

Nigeria must end the costly habit of abandoning public assets after commissioning them, according to the Managing Director and Chief Executive Officer of the Ministry of Finance Incorporated (MOFI), Dr Armstrong Ume Takang, who warned that billions of naira invested in infrastructure could be wasted if facilities are not properly managed and maintained.

Takang spoke in Abuja on Wednesday at the official launch of the Renewable Asset Management Company (RAMCO), a platform set up by the Rural Electrification Agency (REA), MOFI and the Infrastructure Corporation of Nigeria (InfraCorp) to create a professional framework for the management and long-term sustainability of renewable energy assets.

He said Nigeria has built up a large stock of public assets through government programmes and infrastructure spending, but too little attention has been paid to whether those assets continue to deliver value.

The country, he added, cannot keep spending heavily on infrastructure only to abandon or rebuild the same facilities because of weak maintenance.

“We have a plethora of assets scattered around the country, many of them deployed through government programmes and large infrastructure investments. The question is: are those assets delivering the value for which they were established?” Takang said.

He said the problem is especially visible in renewable energy installations at educational institutions and teaching hospitals.

Takang disclosed that the government had received complaints about renewable energy assets becoming unusable because of relatively minor faults, such as damaged solar panels or batteries, despite the huge sums spent on the projects.

That, he said, had forced agencies to return to government for more funding to maintain, and in some cases rebuild, assets that had already been financed and deployed.

“This is not something that is being exaggerated. It is a reality,” he said.

He said the challenge helped drive the partnership between MOFI and REA to build a more sustainable model for renewable energy infrastructure.

Takang said MOFI’s approach to public assets rests on three priorities: identifying what government owns and what those assets are worth; professionalising their management; and mobilising capital to scale productive investments.

The first step, he said, is vital because while Nigerians can readily discuss the country’s debt, there has historically been far less clarity about the value and performance of government-owned assets.

“Until we are able to establish what we own, we will not be in a position to optimise those assets and make the best use of them,” he said.

Takang said MOFI’s asset identification and verification exercise has so far identified assets worth about N25 trillion. The aim, he said, is to ensure those assets are better managed, generate proper revenues and continue to deliver the economic and social benefits for which they were created.

He said revenue from public assets should, where appropriate, help with debt servicing while also funding maintenance and sustainability.

On corporate assets, Takang said government-owned and government-linked entities must also be professionally managed, with proper governance structures, performance targets, boards and management teams.

The third part of MOFI’s strategy, he said, is to mobilise capital and channel it into productive sectors of the economy.

Takang said RAMCO fits into all three priorities by offering a structure through which renewable energy assets can be identified, professionally managed and potentially used to attract more capital.

He said the initiative should also ease pressure on public finances by ensuring existing assets are fully utilised before fresh government funds are requested for expansion.

“We must ensure that before we go back to government to ask for money to expand them or build new ones, we must make the most use of what we already have,” he said.

Takang also said renewable energy assets could attract private-sector investment if they are properly structured and professionally managed.

He said the model could allow participating companies to leverage their assets and balance sheets to draw in private capital and expand renewable energy infrastructure.

He argued that Nigeria must also rethink its power-supply model, noting that national electricity demand is far above what the grid currently provides.

That gap, he said, makes decentralised and distributed energy solutions essential, especially renewable systems that can deliver electricity directly to communities and institutions.

For him, RAMCO is more than another agency or institution.

“It is about understanding that we are evolving a new model for delivering power to our communities,” he said.

Takang said the goal is to ensure renewable energy assets keep delivering their intended impact, generate returns and create a platform for further investment.

He expressed confidence that with the right governance, professional management and accountability, RAMCO could improve the use of Nigeria’s renewable energy investments.

The launch comes as the Federal Government seeks to strengthen the sustainability of renewable energy infrastructure. REA described RAMCO as a specialised platform for the professional management, optimisation and long-term sustainability of renewable energy assets, with the wider aim of linking such infrastructure to long-term private capital.