Nigeria is considering selling stakes in 20 state-run companies to raise funds and improve entity governance.
According to Armstrong Takang, chief executive officer at the Ministry of Finance Incorporated or MOFI, a state-owned asset management company, Nigerian National Petroleum Co. is among the firms in which the government may sell a stake.
According to Bloomberg, the agency is considering options, including strategic sales and initial public offerings, and aims to implement the plan within 18 months.
Some entities “need the private sector to take controlling shares,” Takang told Bloomberg on the telephone, adding that the primary consideration for the government 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 underperforming entity.”
The proposed sales are the latest move by President Bola Tinubu’s administration to overhaul Nigeria’s moribund economy. Since taking over in May, Tinubu has ended costly gasoline subsidies and is revamping the nation’s multiple exchange-rate system. Nigeria’s dollar bonds due in 2047 have rallied since his inauguration.
According to its website, founded in 1959, the MOFI manages Nigerian government investments in about 130 assets across sectors such as infrastructure, financial services, energy and industries.
Former President Muhammadu Buhari in January appointed new management led by Wale Edun, an adviser to Tinubu.
The agency is appointing consultants, including valuers, financial advisers, lawyers, bankers and others, to handle different aspects of the transactions, Takang said.
Nigeria has successfully disposed of some public assets, including the sale of Nigerian Aviation Handling Co. Plc, an airport services provider.
However, some sales haven’t met expectations, particularly in the power sector. Nigerian regulators and banks have taken over companies that account for more than half the West African nation’s electricity grid after they failed to pay their debts.