FG moves to offload stakes in NNPC, 19 other state-run firms to raise funds

The Nigerian government is set to sell off its stakes in major state-run entities in its resolve to raise funds to ease governance.

According to Bloomberg, this update was disclosed by Armstrong Takang, the chief executive officer at the Ministry of Finance Incorporated (MOFI), a state-owned asset management company established to take charge of all investments made by the Federal Government.

The report noted that MOFI aims to use options like strategic sales and initial public offerings to implement the plan which will reduce the government's stake in entities such as the Nigerian National Petroleum Company Limited, (NNPCL) within an 18-month period.

Speaking further, Takang said it was preferable for the government to create value rather than retain control of the existing entities.

“Some of the entities need private sector to take controlling shares, It is better for us to own 49% of a high performing entity than 90% of an entity that is under-performing.” He added.

The Punch reports that since October 2022, there have been plans by the FG to sell off or concession about 27 national assets which include the NNPCL, Tafawa Balewa Square in Lagos, the National Integrated Power Projects in Olorunsogo, Calabar II, Benin (located at Ihorbor), Omotosho II, Geregu II plants, all the hydropower plants across the country, including Oyan, Lower Usuma, Katsina-Ala, and Giri plants among others.

The recent development may be a direct result of the report submitted by the Policy Advisory Council inaugurated by President Tinubu shortly after he assumed office In May 2023 in a move to overhaul the country’s moribund economy.

The report which was put together by the Energy and Natural Resources subcommittees of the council recommended that the federal government becomes a minority shareholder in the NNPCL before May 2027.

The report forecasted that the FG will make a profit of about $17 billion from the sale of NNPCL’s majority stakes in oil and gas assets.

The committee also advised the Tinubu-led government to divest its interests in the country’s refineries as well as build an operating model for the Nigeria Liquefied Natural Gas Limited (NLNG).