By Bassey Udo
The Federal Government on Wednesday unveiled the restructured Ministry of Finance Incorporated (MOFI) into an active investor capable of deriving about N100 trillion its asset value portfolio by 2033.
The 64 year old agency, which was established in 1959 as the custodian of the federal government’s investments in various government owned enterprises (GOEs) and government linked companies (GLCs) has been languishing as a passive unit in the Office of the Accountant General of the Federation
The Minister of Finance, Budget and National Planning, Zainab Ahmed, said at the inauguration of the Governing Board and Executive Management of MOFI in Abuja by President Muhammadu Buhari that the restructuring became necessary the review of its operations as part of the ongoing reforms by the present administration.
The Minister said the decision followed recommendations by a special committee set up by the government to restructure and reposition MOFI for better service delivery, in terms of asset custody, asset management and promotion of overall investment needs.
Although at its inception MOFI was meant to make and manage government investments, the Minister said the agency failed to realise these objectives.
She said many of the earlier investments under the custody of MOFI, like as Nigerian Telexommunica Limited (NITEL), National Electric Power Authoeity (NEPA), Nigeria Airways, Nigerian Shipping Lines, African Petroleum, Union Bank, etc.(all defunct), either failed or delivered sub-optimal returns to the government, while the value of many others were eroded.
With the introduction of the Strategic Revenue Growth Initiative (SRGI) by the government, the Minister said MOFI was one of institutions selected for reform,restructuring and Repositioning for effective service delivery to support government’s economic development.
The reform of MOFI, she said, was to ensure that through it government would maximize the returns on existing investments, while matured investments were matched or outperformed their peers in terms of risk-adjusted returns on investments through dividend distributions.
Also the reform of MOFI would ensure that idle government assets were turned into cash flow-generating assets to unlock liquidity for the system and create investment opportunities for the private sector, while MOFI would partner with the government to leverage current investments and idle assets to support the delivery of its mandate to the citizenry.
The Committee, which submitted its report in July 2021, recommended the restructuring and repositioning of MOFI from a passive custodian of federal government investments into a world-class company responsible for making and managing Federal Government’s investments in accordance with global best practices within the industry.
As part of the restructuring process, President Muhammadu Buhari in August 2021 approved the compilation and creation of an automated and comprehensive national asset register by aggregating, profiling, and managing all national assets and investments.
The register, the Minister explained, would undertake the valuation of different classes of assets considered to be strategic to the Federal Government; create a pipeline of government-owned and government-linked investment opportunities by creating an “Investments Hatchery” and an Investments Deals Room”.
In addition, the register would develop and implement guidelines, policies, systems and government structures for auctioning and disposing non-strategic government assets or legally forfeited assets; develop and implement policies to create assets from all concessions related transactions and actively manage these assets by “matching assets to legacy concessions” and “matching assets to future.
So far, an interagency technical committee chaired by the Permanent Secretary, Ministry of Finance, Aliyu Ahmed, was set up, made up of representatives of the Ministry of Finance, Budget, and National Planning; the DG Budget Office of the Federation; MD Nigerian Sovereign Investment Authority (NSIA); Accountant General of the Federation (AGF); Bureau of Public Enterprises (BPE); Infrastructure Concessions Regulatory Commission (ICRC); Presidential Initiative on Continuous Audit (PICA); Ministry of Justice; and representatives from the organized private sector.
As part of its restructuring, MOFI was granted autonomy, in terms of financial independence from the civil service structure, allowing it to operate in accordance with global best practices as a world-class asset and investment management organization, while generating revenues to sustain itself by charging management fees for the assets under its management.
Besides, a MOFI Governing Council, chaired by the President (who may be represented by the Vice President), was constituted, including the Minister of Finance, Budget, and National Planning as member and Vice Chair.
Other members of the Council include the Ministers of Petroleum Resources, Industry, Trade, and Investments, Transportation and Aviation, as well as the Governor of the Central Bank of Nigeria, and three experts appointed by the President, namely Muhammad Sagagi, Ayo Teriba, and Ken Ife.
The Board of Directors has Shamsudeen Usman as Chairman, with the Permanent Secretary, Finance; Permanent Secretary, Petroleum Resources; Accountant General of the Federation; Olawale Edun; Hajiya Fatima Mede; Ike Chioke; Muhammad Nda; Alheri Bulus Nyako; and an Executive Official from the CBN as members.
Executive Management Team consists Armstrong Takang (MD/CEO); Eric Olo (ED, Chief Portfolio Officer); Sani Yakubu (Chief Investment Officer); Oluwakemi Owonubi (Chief Risk Officer).
At the inauguration of the Governing Council, Board of Directors and Executive Management Team on Wednesday, the Minister the exercise marked the official kick off of the 10-Year Strategic Plan for the new MOFI, MOFI National Asset Register System; MOFI Brand Identity and approved Inventory of Kick-off List of Assets for the new MOFI.
With its inauguration, the Minister said the new MOFI has been transformed into an active investor expected to drive value for the portfolio, adding that the government stands to reap an estimated financial value of up to N100 trillion from its current asset portfolio by 2033.
“It is also crucial that MOFI sweats our investments and assets to derive the maximum value possible from these assets, unlock liquidity from government assets to contribute significantly towards the government’s revenue drive, and cut down on spending on government investments that are not contributing to government revenues or even supporting the government’s social and economic agenda,” the Minister said.
“We must prioritize government investments and derive the highest return on investment from our assets, such as companies where the government owns a controlling stake, shares in private companies, built-up properties, undeveloped lands, machinery, and intangible assets such as mining rights, spectrum, names, copyrights, etc.” she added.
