NNPC in Focus as Tinubu Plans to Sell Stakes in 20 State-Run Companies

Patrick OdeyAugust 16, 2023

2 minutes read

The Federal Government of Nigeria is looking to sell its stakes in about 20 state-owned companies to raise funds and address its financial challenges. The move is part of the government’s efforts to diversify its economy and reduce its dependence on oil revenue.

One of the companies that the government plans to sell is the Nigerian National Petroleum Corporation (NNPC), the state oil company that accounts for most of the country’s oil production and exports. The NNPC has been plagued by corruption, mismanagement, and inefficiency for decades, and has been a drain on the public finances.

The Ministry of Finance Incorporated, the agency that oversees the government’s stakes in state-owned enterprises, said that it will sell the stakes to strategic investors who can add value and improve the performance of the companies. The agency also said that it will consider different options, such as strategic sales and initial public offerings, and aims to implement the plan within 18 months.

The chief executive officer of the agency, Armstrong Takang, said that some of the companies need the private sector to take controlling shares, and that the government’s main goal is to create value rather than retain control.

He said: “It is better for us to own 49% of a high-performing entity than 90% of an entity that is underperforming.”

Besides NNPC, some of the other companies that the government intends to sell or concession include:

Tafawa Balewa Square, a historic landmark and event venue in Lagos
National Integrated Power Projects (NIPP), a series of power plants in various locations across the country
Hydropower plants in Oyan, Lower Usuma, Katsina-Ala, and Giri
Calabar and Kano free trade zones, which offer incentives and facilities for businesses
Abuja Water Board, which provides water supply services to the capital city
Aluminium Smelter Company of Nigeria, which produces aluminium ingots and billets
National Film Corporation and National Theatre, which promote and regulate the film industry
Lagos International Trade Fair, which hosts trade exhibitions and fairs
Federal Government-owned hotels and landed properties
Government ministries, such as the postal service

The government hopes that by selling its stakes in these companies, it will generate more revenue, reduce its debt burden, attract more investment, create more jobs, and improve service delivery. The government also hopes that by involving the private sector in these sectors, it will enhance competition, innovation, and efficiency.

The proposed sale of state-run companies has been met with mixed reactions. Some people believe that it is a good idea, as it will allow the private sector to take over and improve the performance of these companies. Others are concerned that the sale will lead to job losses and a decrease in government control over these important industries.

Only time will tell whether the government’s plan to sell stakes in 20 state-run companies will be successful. However, it is clear that the government is under pressure to raise funds and improve the economy. The sale of these assets is one of the ways that the government is hoping to achieve these goals.

Source: Bloomberg