WHAT NNPC MUST ACHIEVE BEFORE GOING PUBLIC — EDUN
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The Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, has charged the Nigerian National Petroleum Company Limited (NNPCL) to achieve a high standard of corporate governance before going public.
He spoke at the Ministry of Finance Incorporated (MOFI) Corporate Governance Forum for Government Owned Enterprises (GOEs) in Abuja, this afternoon.
He said, “I think you will all agree that this is a critical issue at a critical time. You have the likes of NNPC, which is a portfolio company. We have good indication that they are looking to IPO (Initial Public Offerings). NNPC is the crown jewel of the Nigerian corporate sector and the economy. It is a limited liability company, and if you want to go public, corporate governance is at the heart of what you must achieve.”
The Minister also launched the GOEs’ Scorecard which seeks to rate the organisations in line with the criteria set out by MOFI, which they must meet.
Crowding in private capital
The minister said that the strategy of the present administration was to crowd in private capital, in recognition of the inadequacy of public funding for the infrastructural sector.
His words, “But more important than that, rather than relying on budgetary funding, the whole aim of Mr. President’s strategy of stabilizing the economy and the investment environment was to crowd in the private sector.
“Government accounts for 10% of GDP. The private sector, 90%. That’s where the money is. And that’s why the focus has been on, for example, rather than the Ministry of Works looking for funds, using the Highway Development and Management Initiative to hand over major roads which the private sector is interested in constructing, reconstructing and concession basis. There are eight other roads that are ready to go.”
Tariffs: We ‘re going back to drawing board
The Minister said that his Economic Management Team would return to the drawing board if the current tariffs situation became a long-drawn battle.
According to him, “For the economic management team of Mr. President and for indeed his whole government, we are going back to the drawing board to look at the scenarios that may play out if the current tariff situation is prolonged.
“For Nigeria, in terms of exports, it’s not too bad because oil minerals are excluded by America from being in any way sanctioned with tariffs. But based on our non-oil exports and based on the formula that the Americans are using, we do have a 14% tariff on our exports. But it’s a lot better than Vietnam, which has 46%.
“So we need to look at these situations and see what the opportunities are. The Nigeria of today, with a relatively stable economy and an attractive investment environment, including attractive exchange rate, is a place where if they can’t produce in Vietnam, they can come and produce in Nigeria. We are here, we are ready, we are waiting, and we have what will be attractive to them in terms of policies, in terms of market, and in terms of export capacity.
In his presentation, the MOFI MD Dr. Armstrong Takang said that globally, GOEs dominated sectors like infrastructure (e.g., power, rail, water), finance, natural resources, and manufacturing, delivering essential services that drive economic growth and poverty reduction.
He added that among OECD countries, utility SOEs 9State Owned Enterprises) accounted for 50% of total SOE value.
The MD described MOFI as custodian of Public Wealth, managing a diverse SOE portfolio spanning energy, infrastructure, financial services, manufacturing, agriculture, and digital services.
“It holds majority stakes in over half of its over 50 portfolio companies, making it a critical driver of Nigeria’s economic landscape and currently actively engaging with SOE boards to enforce policies that maximize value, contrasting with its prior passive stance that led to value erosion.
Its strategic roles, he said, “extends to leading reform within Nigeria’s SOE ecosystem, influencing stakeholders and setting standards and positioning Nigeria’s SOEs as drivers of innovation and global competitiveness within the SOE ecosystem, while acting as a catalyst to attract private sector collaboration and investment into Nigeria’s SOE ecosystem”
The outgoing Country Director of the World Bank in Nigeria Dr. Ndiame Diop, urged greater transparency in the management of GOEs in the country.
He noted that only about 50 percent of them had their Annual Accounts published and posted on the MOFI website and that although an improvement over the previous year, more needed to be done.
Dr. Diop who has just been appointed Vice President, African Region of the World Bank, noted that the deployment of technology to take out federal government revenue from the GOEs, even before the annual accounts were prepared had enhanced government revenue.
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