The Ministry of Finance Incorporated (MOFI) has restructured and fully taken control of the federal government’s 40 percent equity holding in the 11 privatised successor electricity distribution companies (DISCos) of the defunct Power Holding Company of Nigeria (PHCN).
MOFI’s managing director, Armstrong Takang announced the full take-over of the ownership, control and management of government equity and assets in all the DISCOs on Monday, stating further that, as a reformed and active entity, MOFI was also taking significant steps to ensure these assets delivered full value to the country, while looking forward to collaborating with key stakeholders towards making a tangible impact in contributing to a thriving, resilient and growing Nigeria.
It would be recalled that MOFI recently terminated the power of attorney issued to the Bureau of Public Enterprises (BPE) in 2012 to enable it to carry out on its behalf, actions necessary to fulfill the National Council on Privatisation (NCP)’s directives and complete the various electricity privatisation (share sale) transactions.
The termination of the power of attorney to BPE was a sequel to formal authorisation by the Minister of Finance and Coordinating Minister of the Economy, Wale Edun which gave the Board of MOFI power to immediately assume ownership, control, and management of all outstanding Federal Government of Nigeria (FGN) equity in all existing electricity successor companies in the Nigerian Electricity Supply Industry (NESI).
Takang, while clarifying the development, said MOFI as a statutory corporate entity solely established by the MOFI Act, 1959 has the mandate as the holder and manager of all assets acquired by way of debt or equity capital from the funds of the FGN.
These assets included investments in the defunct National Electric Power Authority (NEPA), which transformed into the Power Holding Company of Nigeria (PHCN).
Following the repeal of the Electric Power Sector Reform Act, 2005 (EPSRA), he said PHCN was subsequently unbundled into the 11 electricity successor electricity distribution companies (DISCos), namely Abuja Electricity Distribution Company PLC; Benin Electricity Distribution Company PLC; Eko Electricity Distribution Company PLC; Enugu Electricity Distribution Company PLC; Ibadan Electricity Distribution Company PLC; Ikeja Electricity Distribution Company PLC; Jos Electricity Distribution Company PLC; Kaduna Electricity Distribution Company PLC; Kano Electricity Distribution Company PLC; Port Harcourt Electricity Distribution Company PLC and Yola Electricity Distribution Company PLC.
With the decision of the NCP in 2011 to sell the shares of the 11 successor DISCOs under the Public Enterprises (Privatisation and Commercialisation Act) 1999, Takang explained that the Nigerian company law at the time did not provide for a single shareholder company, therefore legally impossible for MOFI to be the sole holder of the FGN shares in the DISCOs.
Apart from the need for a second entity to hold the Federal Government shares, in addition to MOFI, Takang said as the secretariat of the NCP, BPE was the statutory entity tasked to provide support to MOFI in giving effect to the NCP’s decision.
Consequently, he said in 2012 MOFI issued a Power of Attorney to BPE to empower it to hold the Federal Government shares in the DISCOs on its behalf and carry out the actions necessary to fulfil the NCP’s directives and complete the various electricity privatisation (share sale) transactions.
Takang said after playing that holder role on behalf of MOFI for over 10 years after the completion of the share sales in the DISCOs in 2013, and following the amendment of the MOFI Act by the Finance Act of 2023, it became necessary for MOFI to resume its responsibility, having been reformed and restructured from a Unit in the Office of the Accountant-General of the Federation to a full-fledged public sector asset management corporation.
“This arose from the recognition that FGN assets across practically all economic sectors nominally valued at very significant sums were largely moribund or grossly underutilized and poorly managed.
Consequently, it was determined in 2021 by the then Minister of Finance, amongst other relevant decisions, that MOFI would adopt a new, value-driven strategic direction in aggregating and managing FGN assets,” Takang explained.
To enable the agency to exercise its mandate effectively, Takang said MOFI has been restructured and repositioned as an active asset management corporation, with a strategy developed for creating a National Assets Register that aggregates and profiles all national assets and investments.
Also, he said MOFI was committed to developing and implementing policies and regulations that would ensure the creation and management of assets from debt-related transactions; developing and implementing policies and regulations that would ensure the creation and management of assets from concession-related transactions as well as creating a robust pipeline of FG-owned and FG-linked investment opportunities.
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