The Ministry of Finance Incorporated (MoFI) on Monday explained that its take-over of the 40 per cent Federal Government shares in the Electricity Distribution Companies, DISCOS, was in line with its mandate and to ensure efficiency in running those companies, as well as raise revenue for the government.
In a statement, the organisation expressed gratitude to the Bureau of Public Enterprises (BPE), which held the shares on behalf of the federal government in the last 10 years.
It stated: “MOFI’s resumption of its rights of management of the FG’s 40 per cent shareholding in the eleven electricity distribution companies and the various equity stakes in related energy sector companies is an essential element of this consolidation.
“It will drive operating efficiency, best corporate governance practices and ultimately maximise the value derived from these electricity assets, in alignment with President Bola Ahmed Tinubu’s economic growth agenda.
“MOFI extends its gratitude to the BPE for its stewardship of these shares. As a reformed and active entity, MOFI is taking significant steps to ensure that these assets deliver full value to the country.
“We look forward to collaborating with our key stakeholders and, through our concerted efforts, making a tangible impact in contributing to a thriving, resilient and growing Nigeria.
“The Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, had last week, issued an order to the Board of Directors of MOFI to terminate the Power of Attorney (POA) granted by MOFI to the Bureau of Public Enterprises (BPE), in 2012, to hold the shares on behalf of the federal government.
MOFI was, also by the same order, to assume ownership, control and management of all outstanding Federal Government of Nigeria (FGN) equity in all existing electricity successor companies.
According to MOFI, “the legislative intendment of the MOFI Act was and remains that the corporation is constituted as the holder and manager of all assets acquired by way of debt or equity capital from the funds of the FGN”.
The organisation further clarified the roles of the BPE in holding the shares since 2013.
“At the time, Nigerian company law did not provide for a single shareholder company hence it was legally impossible for MOFI to be the sole holder of the shareholding of the FGN.
“This made it necessary that a second entity hold the shares in addition to MOFI. In addition, BPE, as the secretariat of the NCP, was the statutory entity tasked to provide support to MOFI in giving effect to the NCP’s decision.
”Thus, in 2012, MOFI issued a Power of Attorney to the Bureau of Public Enterprises, whereby BPE was empowered to carry out the actions necessary to fulfil the NCP’s directives and complete the various electricity privatisation (share sale) transactions.
“BPE had since then held shares in the Discos on behalf of MOFI. This continued for over 10 years after the sales were completed in 2013, until the recent Order by the Honourable Minister of Finance.
The organisation said further that in the past 24 months, and “particularly since the amendment of the MOFI Act by the Finance Act, 2023, MOFI has been reformed and restructured from a unit in the Office of the Accountant-General to a full-fledged public sector (FGN) 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, among other relevant decisions, that MOFI would adopt a new, value-driven strategic direction in aggregating and managing FGN assets”.
