The Nigerian government is planning to sell stakes in about 20 state-owned companies in a bid to raise funds and improve governance in those companies.
One of the companies up for sale is the Nigerian National Petroleum Corporation (NNPC).
The government is considering strategic sales of stakes as well as initial public offerings (IPOs). It hopes to implement the plan within 18 months, Bloomberg reported Tuesday.
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Bloomberg quoted Armstrong Takang, CEO of the Ministry of Finance Incorporated, a government-owned asset management company, as saying that the government’s main goal is to create value rather than retain control.
“It is better for us to own 49% of a high-performing entity than 90% of an entity that is underperforming,” he said.
The Ministry of Finance Incorporated was founded in 1959 and manages the federal government’s investments in about 130 assets across sectors such as infrastructure, financial services, energy, and industry.
Former President Muhammadu Buhari appointed new management in January led by Wale Edun. Mr Edun is now expected to be the finance minister under President Tinubu.
The agency is in the process of appointing consultants, including valuers, financial advisers, lawyers, bankers, and others to handle different aspects of the transactions, Bloomberg reported, quoting Mr Takang.
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It is not clear how much the government is hoping to raise from the privatization. The government has struggled for years with low revenue and has spent a large portion of its earnings on debt servicing.
The NNPC restated its plan to issue an IPO in July.
“As a company that is guided by the Companies and Allied Matters Act, the NNPC Limited will soon declare its shares to the public for acquisition,” CEO Mele Kyari said in Abuja.
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