FG earns N130 billion from privatisation in four years, says BPE

•Proceeds to exceed N260bn projected in 2023 budget
The Bureau of Public Enterprises (BPE) said the various privatisation, commercialisation and asset optimatimisation activities in the last four years earned the Federal Government N130 billion.

Director-General of BPE, Alex Okoh, disclosed this yesterday in an interview with journalists in Abuja.
He said the mandate of BPE goes beyond privatisation proceeds to include cost savings through sector reforms.
He said: “The sector reforms that we have carried out, apart from making life a lot easier for the citizens, also conserved funds for the Federal Government. This is because ordinarily there would have been subventions paid out to those assets and enterprises that have been reformed to be more commercial in their operations.”

Giving example with the Nigerian Postal Service (NIPOST), which he said has been unbundled, Okoh said NIPOST property is now a separate entity from the postal service just as NIPOST transport and logistics is a distinct entity. He said the two entities would become operational from January 1, 2023.

“We just concluded the recruitment of the management staff of the two entities. They will become operational from the 1st of January next year. The implication of that is that subvention from the fiscal purse that would have been going to the service will no longer go there, and that is saved on the part of government.”

He said that he is optimistic that the BPE will exceed the N260 billion projected in the 2023 budget with the completion of the sale of five National Independent Power Plants (NIPPs).

“We are reaching some understanding with the state governments for the sale of five power plants. That is what has dragged this transaction for the past two years,” he said, adding: “Thankfully as at last week, we were able to resolve with the governors. So, we are likely to start the financial opening of the bids before this year runs out. The proceeds themselves will come in the first quarter of next year.
“We project that in the first quarter of next year, that is by March, we would be able to exceed the expectations of the budget, which is N260 billion. Let me also add that from the projected sum from the sale of the assets, the portion that will become available for the funding of the Federal Government is 47 per cent while 53 per cent will go to states because the assets are not federal assets but federation assets,” he said.

On the electricity distribution companies (DisCos), Okoh said it is wrong for people to say the federal government took over the DisCos.
“It is not a government takeover of the core investors because that will negate the process of privatisation itself. It is purely a commercial transaction between a lender and a borrower. A borrower in this case is the core investor in the 60 per cent shares of the DisCos.
“According to the loan agreement, the banks are to repossess the DisCos should the core investors fail to pay back their loans. That is what has happened. In some quarters, people say government has taken over DisCos. Nothing of such happened. The banks were allowed to step in to exercise their rights.”