In a bid to address the inefficient operation and ownership crisis in many of the eleven Distribution Companies (DisCos), the government plans to sell off its 40% shares in these firms. The Director-General of the Bureau of Public Enterprises (BPE), Alex Okoh, announced that the divestment would be conducted through Public Offerings (IPO) at the Nigerian Stock Exchange. The move aims to generate funds for the Federal Government to partially finance the N27.5 trillion 2024 Appropriation Bill. The 40% shares are co-owned by the Federal Government, states, and local governments.
Okoh also mentioned plans to sell government shares in Eleme Petrochemicals Company Limited, Nigeria Re-Insurance, NICON Insurance, and Nigeria Machine Tools in the coming year. He dismissed rumors about plans to swap equity in the DisCos with the Niger Delta Power Holding Company (NDPHC) as untrue. The labor unions are also seeking to own shares in the 40% stake.
Furthermore, Okoh highlighted the government’s commitment to listing the 40% ownership of DisCos on the capital market, aiming to democratize the ownership of these assets and allow interested citizens to hold stakes. He praised President Bola Ahmed Tinubu for his efforts in attracting Foreign Direct Investments (FDI).
In addition to the DisCos, the government plans to unbundle the Transmission Company of Nigeria (TCN) into two entities: the Independent System Operator (ISO) and the Transmission Service Provider (TSP). This restructuring aligns with the Electricity Act 2023 and aims to address the weaknesses in the transmission sub-sector of the Nigerian Electricity Supply Industry (NESI). The minister emphasized the need to synchronize with the evolving landscape of state electricity markets and explore options for nationwide electricity provision.
The BPE has been allocated N2.4 billion in the 2024 fiscal budget to undertake reforms of public enterprises, conduct sales, and assess post-privatization outcomes.