In a recent announcement, the Bureau of Public Enterprises (BPE) has revealed its strategic plan to divest the remaining 40% shares owned by the Federal Government in electricity distribution companies (discos) and other prominent assets by the year 2024. This announcement was made by the Director-General of the BPE, Mr. Alex Okoh, during a media chat held in Abuja on Tuesday.
The assets earmarked for divestment through Public Offerings (IPO) at the capital market in 2024 include Eleme Petrochemicals Company Limited (EPCL), Nigeria Re-Insurance, Nicon Insurance, and the Nigeria Machine Tools in Osogbo. This move is part of the government’s broader efforts to unlock value from its holdings and foster private sector participation in key industries.
During the media chat, Mr. Okoh acknowledged the existing challenges associated with the ownership structure of the discos, expressing the government’s commitment to resolving these challenges promptly. He outlined the BPE’s commitment to leveraging IPOs in the capital market as a credible strategy for the divestment process.
Okoh stated, “IPO through the capital market is a very credible strategy for us. Once we are able to resolve a few changes we are having now, especially ownership challenges with some Discos, we resolve to sell. So the capital market, yes once we resolve the 40 per cent ownership in the discos, once we are done with the discos, we also plan to take Eleme petrochemicals to the market, we had also planned to take Nigerian Reinsurance insurance to the market, Nicon insurance to the capital market.”
He further highlighted that Nigerian Machine Tools in Osogbo is also slated for the capital market. Despite encountering challenges in previous attempts to bring certain entities to the market, the BPE remains optimistic about the prospects for a more active year in 2024. Okoh emphasized the importance of educating the public and addressing stakeholder concerns at every step of the divestment process.
In a broader economic context, this move aligns with the Federal Government’s plan, as reported by Infostride News earlier, to generate N298.4 billion in revenue from the sale of select government assets in 2024. This financial strategy is seen as a means to alleviate public debts and reduce the fiscal burden on the federal government. Wale Edun, the Minister of Finance and Coordinating Minister of the Economy, underscored the belief that privatization efforts would drive macroeconomic growth and create opportunities for increased investor participation in the economy.
As the BPE gears up for a pivotal year in 2024, these strategic divestments not only mark a significant step in reshaping the ownership landscape of key industries but also reflect the government’s commitment to fostering economic growth through private sector involvement. The success of these plans will not only be measured in financial terms but will also serve as a litmus test for the government’s ability to address complex ownership challenges and navigate the intricacies of the capital market.
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