The federal government has so far generated N1 trillion from the sale, commercialisation, and the concession of 234 public assets in the past 32 years, Director General, Bureau of Public Enterprises (BPE), Mr. Alex Okoh has said.
The BPE also cleared the air on the speculated moves to privatise the Transmission Company of Nigeria (TCN), saying that the federal government is not contemplating an outright sale, but considering how to attract private capital to the transmission component without ceding the ownership of the company.
A breakdown of the 234 assets involved from the time of the defunct Technical Committee on Privatisation (TCPC) in 1989 to the creation of the BPE in 1999 showed that the agriculture sector accounted for 32, banking and finance (31), cement (15), energy construction and services (14), hotels and tourism (13) industry and manufacturing (9), oil and gas (13). Others are ports (31), power (24), mines, and steel (38), automobile (8), paper and packaging (4), sugar (4) and telecom.
Okoh told journalists yesterday in Abuja that the BPE is expected to generate N493.40 billion revenue from various transactions as approved by the National Council on Privatisation (NCP). Over 30 assets are targeted for privatisation in 2021, including nine categorised as energy, eight in industries and communication, six in development institutions and natural resources. Okoh added that 22 of the assets to be privatised were carried over from 2020.
Responding to questions, Okoh denied the involvement of the BPE in the proposed moves by the Nigerian National Petroleum Corporation (NNPC) to acquire a 20 percent stake in the Dangote Refinery, which is currently under construction.
But he added that its initial plan to privatise the nation’s four refineries had been dropped when the federal government opted for a revitalisation approach to improve them. He stated that the refineries with a refining capacity of about 480,000 barrels were at various stages of non-performance.
He said, “Our plan initially was to privatise the refineries, especially with private investors going into refining,” adding that with the NNPC believing that they could be rehabilitated, the privatisation agency had to drop them from its 2021 work plan.
Okoh stated that the issues surrounding the Ajaokuta Steel Company were quite complex but expressed optimism that they would be resolved, especially the litigation aspect. According to him, once that is settled, a decision will be taken on how to forge ahead with the company.
He said the rationale for privatisation was to generate revenue for the government, reduce operational inefficiencies, revitalise and optimise public sector entities and increase investment level as a catalyst for growth.
Okoh stated that the nation’s fiscal space is getting increasingly constrained, adding that as a result, government cannot provide the resources required to meet all of its obligations and bridge the huge infrastructure gap. He stated that the most feasible option was to attract private sector investments, adding that BPE’s current initiative in its 2021 work plan and additional roles in the Public-Private Partnership (PPP) space is poised to impact the economy positively.
This, he added, is in the areas of infrastructure development, improved health care service delivery, power generation and supply, employment creation, food security, and human capital development.
On the speculations that the federal government is planning to privatise the TCN, BPE’s Director, Energy Department, Mr. Yunana Malo, said there was no such plan to privatise the company, adding that what is being considered is reform with a view to give it out to a concessionaire for optimum value.
He said the transmission was the weak link in the power chain, as the generation component, which was privatised had since attracted a lot of investments, making it more efficient. According to him, generation capacity has improved, while 60 percent of the distribution segment has also been partially privatised and is beginning to pick up through the federal government’s reforms.
Malo said, “The seemingly weak link in the transmission component; it is still 100 percent owned by the federal government.
“The idea is to think outside the box and bring in solutions that will make the transmission component service the value chain and make it more efficient.
“Government is not thinking of privatising; it is thinking of ways and means that the private capital can be brought into the transmission component without giving out the ownership of Transmission Company.”
The BPE, he said, would give out the transmission segment in concession, “so that we can have somebody building the high tension lines, covering areas that have not been reached or to maintain the existing ones to get maximum value, to move from the radial system we have today into a mesh.”
He added that the idea is not to privatise but to reform and make it efficient by bringing in private sector operational modalities within the transmission company. On the federal government’s 40 per cent stake in the Distribution Companies (DISCOS), Malo said the shares were still intact and protected by BPE.