To secure access to alternative funding to reactivate and strengthen ailing government-owned investments and companies, the Ministry of Finance Incorporated (MOFI) has continued its series of private sector engagements across the country.
On Monday, the management of the agency, which is the sole custodian and manager of Federal Government investments and assets in the country, was at the Nigerian Exchange Limited (NGX) to hold meetings with strategic capital market operators and brokers, to explore ways of collaboration to boost the productivity of the government assets under its management.
Led by its Managing Director and chief executive, Amstrong Takang, the team was at the FMDQ Exchange Group also in Lagos to seek further collaboration to enhance transparency, efficiency and good governance of state-owned enterprises, most of which have become moribund or at best underperforming due to their continued dependence on the federal budget for funding of their activities.
During the visit, Takang restated MOFI’s objective to work with the private sector to enhance its sustainability capacity it become a truly global asset management agency and custodian of government investments and assets across key sectors of the economy.
He lamented that at the moment, many of these assets and investments have yielded zero or very poor returns on investments over the years despite huge expenditures by the government.
The new management team of the MOFI, Takang said, was committed to ensure that various state-owned enterprises would be transformed into profitable going concerns like their counterparts across the world as part of its 10-year development roadmap.
Within the target period, he said assets under the management of MOFI are expected to soar in value from the current N18.5 trillion to over N100 trillion, to significantly contribute to the combined balance sheet and overall value of the nation’s economy.
Part of the plan by MOFI, Takang said, would be to see most of the moribund state-owned companies transformed within the period into viable entities that are delivering on their mandates, with bankable projects capable of attracting private sector partnership and financing, rather than remain perpetual appendages that continue to draw from government’s annual budgets.
MOFI, the MD assured, was poised to actively play its role as a shareholder in all government owned companies, to ensure transparency and accountability through good governance practices, which have been missing over the year, resulting in the erosion of their value.
The partnership and collaboration being sought with the private sector, he explained, was necessary “to ensure we deliver on our mandates,” hinting of a planned deconstruction of its balance sheet to leverage on.
After concluding its ongoing national asset registry programme, Takang said MOFI would become a mini-exchange, housing government-owned companies and assets in multiple sectors of the economy, even as he spoke of the possibility of embracing diaspora financing as part of its capital raising strategy, an area, he said, would form part of its ongoing conversations with stakeholders.
Also contributing, an executive director at MOFI, Sanni Yakubu, said MOFI’s mandate was essentially to help the government improve and diversify its revenue base by engaging with the larger part of the economic ecosystem – the private sector.
“The larger number of people who need housing are in the private sector. We want to partner with FMDQ to bring the private sector to the table, such that it serves as a platform to deliver value,” Yakubu said.
Also speaking, MOFI executive director, Henry Olowo, said MOFI was a “pretty dense vehicle that is moving slowly,” hence the need for collaboration and partnership with strategic institutions and agencies to ensure the assets delivered as much as 10 times the value of what they were currently doing.
Welcoming the MOFI team, the acting CEO of FMDQ Exchange, Jumoke Olaniyan, described the group as a financial market infrastructure company that has since it was established 10 years ago transformed into a one-stop-shop for securities the exchange.
FMDQ, she explained, was a good place for private companies to access Commercial Papers for capital raising, in addition to private company securities, bonds, and sukuks.
She said while companies seeking fresh capital through the FMDQ platform must commit to disclosure requirements to ensure investor confidence, private company securities do not require elaborate disclosures, which is why such instruments were not expected to be registered with the Securities & Exchange Commission (SEC).
Private companies that must raise capital, Olaniyan explained, were expected to set up Special Purpose Vehicles (SPVs), which are then registered with the SEC.
She assured the visitors that the nation’s various infrastructure challenges, especially when it comes to financing, could be addressed within the domestic economy with effective collaboration with strategic financing institutions.
