Q: How does the inauguration of your Board make you feel about the assignment you have ahead of you?
TAKANG: I think we’re very excited. It is a very important assignment. The fact that the President and the Honorable Minister of Finance have deemed us worthy to be a part of this very great team is for us a unique, humbling experience. It’s a privilege to serve our nation.
We believe that the caliber of the Board members makes it easier for us to not only engage in this assignment, but to do so diligently, successfully, to ensure we meet the expectations of the President as well as Nigerians.
Of course, it’s a huge responsibility. But we also know that we have the support of the administration to go ahead to deliver on this mandate. We are committed to doing so for the benefit of Nigeria and Nigerians.
Q: What’s the size of the assets MOFI has to manage?
TAKANG: Remember that the assignment, in terms of establishing what the assets are, is a process that has just begun. For us, it would be premature to say what assets we have under management, because the whole idea of establishing MOFI is so that we can establish what Nigeria truly owns. At the moment, we can tell you what we owe as a nation, but we can’t tell you what we own. And it is precisely one of the reasons why MOFI was restructured to engage in the process of establishing what Nigeria or the federal government owns. So, this is an ongoing exercise that has just started.
We have quite some distance to cover. But, we’re very confident that this will be running into tens of trillions of Naira as we continue the process of establishing what we own.
Q: Talking about knowing what we owe and not what we own, can you give an insight into what exactly we owe?
TAKANG: Well, I believe, as you know, there is an agency that is has a statutory responsibility to not only track what we owe, but to manage what we owe. That is the Debt Management Office (DMO). I think that is their remit. They can give you all the details about what we owe, who we owe and all the conditions for repayment.
For us at MOFI, our mandate is around what government owns, especially investment assets. That’s our focus – to establish precisely what we own and how much it is worth; how we can optimize and monetize it, and ensure we’re using it to support government’s programmes to revitalize and reposition our economy.
Q: Can you speak to the immediate plans of your Board after the inauguration? What should Nigerians expect?
TAKANG: Well, you know, we have a MOFI three-point agenda. Number one is to work on our corporate assets to make sure they are delivering sustainable risk-adjusted returns. And how do we measure that?
For every share we own in any entity, we have to make sure that there is capital appreciation; that those shares are improving in value.
Secondly, we want to make sure that each of those entities is delivering dividends, to give us liquidity. So, that’s our first agenda in terms of our corporate assets.
The second agenda is to establish what the federal government owns, especially in terms of investment assets. And that involves, first of all, identifying, enumerating, valuing, cataloguing, managing, optimizing and monetizing our assets in different asset classes.
So, one of those clearly are the corporate assets. These shares we own in entities, whether we own them 100%, or partially. These include real estate assets that are either in Nigeria or offshore.
As you know, we have an incredibly large portfolio of real estate assets offshore. We will be enumerating those, valuing them and making a decision as to how to rationalize and optimize those, to ensure that we’re getting the most value from them.
Third category is around the oil and gas assets. As you know, this is a country that is heavily endowed with oil and gas assets. And for the last six, seven decades, we’ve made a lot of foreign earnings from our oil and gas assets. But there is a huge headroom for improvements, in terms of how we use the oil and gas assets.
So, that clearly is the third category of assets that we’ll be tracking and ensuring that we find ways to do better.
There is a lot of solid mineral asset as well. As you know, we have a lot of solid mineral assets. That’s the fourth category. The fifth category is around our infrastructure assets, especially the ones that have concessions on them.
We’re interested in knowing where they are? To what extent are they being used? How can we improve them? How can we optimize them? And how do we make sure that we’re maximizing the revenues that accrue from those?
There are also intangible assets. If you look at our spectrum, whether they are telecommunications spectrum, the right of way. Even the name Nigeria has value. The name Abuja has value. Copyrights from the works we’ve done over decades. Those are all assets.
The next category is classified as our green economy assets, carbon credits. Given what is going on around the world today, there is a huge opportunity for us to monetize our carbon credits from our forestry, and even from our blue economy, in terms of our aquatic resources in the sea.
Those are all resources that we can really leverage on. But we need to have a structured way of identifying where they are; enumerating them, valuing them, and having a policy, and even legislation in terms of how these are managed, so that they’re not mismanaged or stolen, because this is really the Commonwealth of the people. And MOFI has a responsibility to make sure that we safeguard the Commonwealth of the Nigerian people. So, that’s the second pillar in terms of our national assets register.
The third is around mobilizing investments in priority sectors of the economy. And even mobilizing investments for our portfolio companies. A lot of them need to be recapitalized. Many of them need working capital. And the DFIs, which is development financial institutions, need capital for on lending.
We need to be able to mobilize data from different sources, both domestic as well as overseas to give to them. Then, even for the assets that we’re going to be cataloguing. We need investments in those assets, so that we can derive the most value from them.
We see the national assets register as a way to create a database of bankable projects, projects that can attract investments not only from local investors, but also from foreign investors. And that will be a major part of MOFI’s efforts, in terms of mobilizing investment capital, to bring into Nigeria, to help unlock liquidity, to provide investments to the key and priority areas of our economy, and to ensure that we’re creating jobs, making a difference and supporting government in what government is doing. So, those are the key areas of our focus within the next few years.
Q: Looking at MOFI’s mandate and that of the BPE. How are you going to ensure that you work in harmony to ensure there’ll be no conflict in roles, because your mandates appear to be overlapping?
TAKANG: I think it is important that we go back to the legislative powers for each of these entities. MOFI has been around since 1959. MOFI was established precisely to hold shares in public assets on behalf of the federal government of Nigeria. It was on the basis of that that all the shares for commercial entities that the federal government had an interest in were held by MOFI. That has not changed. That legislation is still relevant today, as it was in 1959.
It is on the basis of that that even when BPE needed to carry out transactions against each of those assets that they privatized, it required a power of attorney to act as MOFI’s attorney on those transactions. So, that clearly recognizes the fact that MOFI is the owner of those assets on behalf of the federal government of Nigeria. And that has not changed.
As early as 2021 when the PIA (Petroleum Industry Act) was passed, the shares for federal government of Nigeria in the petroleum industry assets in the PIA were in the name of MOFI. The federal government shares in NSIA (Nigerian Sovereign Investment Authority) in MOFI; federal government shares in Bank of Industry (BOI), and indeed, all the commercial entities where federal government has shares, were in MOFI’s name. So, there is no doubt as to who ought to hold those shares on behalf of the federal government of Nigeria.
BPE’s mandate is very clear. BPE is a transaction agency in terms of privatization and commercialization of public assets. So, let me break it down.
When you do privatization, you would take an entity, if it’s a partial privatization, which means that there will be residual shares left, the shares that belong to the private sector will be transferred to them, and the residual shares that belong to the federal government ought to be transferred back to MOFI, or to whoever owned it. The fact that that did not happen before is an anomaly or an aberration that needs to be corrected, given that MOFI is now a fully operational entity.
So, in our view, there is really no basis to think about anyone encroaching into anybody’s territory. Our roles and responsibilities are very clearly defined.
MOFI is the custodian of the federal government of Nigeria assets, or the shareholder on behalf of federal government. We have a responsibility to ensure that while we hold the shares of the federal government, we take steps to manage those assets well, optimize and safeguard them; to look for ways to create value for those assets. But par adventure we make a decision that those assets need to be privatized or commercialized, then we will get BPE involved. Once they’ve completed the privatization or commercialization exercise, the shares that go to private sector will be transferred to the private sector and the residual shares that belong to federal government ought to be transferred back to MOFI for safekeeping, management, optimization, monetization, and to ensure that government’s interest is safeguarded going forward. So, for MOFI, that distinction is very clear. The current legislation is also very clear for both entities.
Q: In recent times, you have been visiting agencies and institutions, building bridges of relationship with agencies in the capital market, like FMDQ. What’s the response so far from those interactions?
TAKANG: That was an outing that we felt was quite remarkable. I think it moved the needle. Remember, MOFI has been around since 1959. But for a long time, many people didn’t know who MOFI was. Many people didn’t understand what MOFI stood for; what its mandate is, and what it plans to do. So, for us, the purpose of that visit was to, one, inform our key stakeholders, which capital market operators are, to educate them about MOFI’s mandate, and also to begin to discuss with them and see how we can work together.
We strongly believe that our success is partly based on the extent to which we can engage the private sector; to mobilize private capital; to leverage their expertise; to see how we can manage our investments better.
So, those visits were useful in informing them. Today, we have a lot of interest from that same community, in terms of how we can partner together. Many of them are expressing interest in some of the assets we own as well as some of the investments. Many of them have reached out to see how they can work with us to raise capital to invest in different sectors of the economy.
So, there is a whole lot of interest that has come out of that. Our view is that the level of engagements we’re having with them now is at a higher and better quality than it was before as a result of those engagements.
In the next coming months, we will see some transactions that will be coming through the partnerships that we have with them all, which we believe came from some of the discussions we had with them.
Q: You just said that some of the stakeholders are seeking how they can work with MOFI to raise capital. In what area are these discussions?
TAKANG: Let’s go back to the fundamentals. What is MOFI’s mandate? We are the managers of federal government investment assets. This means investments they already have. Now, to continue to optimize those assets, you need to provide additional investments to them. And those investments can come from multiple sources. They can either come from the government, which means those funds will be appropriated and then invested in those entities. Or they can come from the private sector.
We believe that we need to begin to engage the private sector and crowd in private sector investments in either in recapitalizing existing entities or providing additional investments for projects that are for governments or projects to be carried out by portfolio companies. And we believe that there is sufficient liquidity in the private sector. We believe that there are sufficient opportunities for the private sector to get decent returns from these opportunities that the government is opening up in there. That is why we think we will be engaging the private sector in doing that. We also have government capital projects that require massive amounts of capital, whether you’re talking about road projects, building new hospitals, new educational institutions, or even exploration in the oil and gas sector, or solid minerals. A lot of these projects that are on the platform of the government require massive capital that the government alone cannot provide. So, we need to engage the private sector, both domestic as well as foreign, to crowd in private sector capital, to get into that. That’s the basis upon which we are engaging the private sector to do that. And it is only when we can convince the private sector that these opportunities are bankable and that they will make decent returns, that can we crowd in a larger amount of capital than even the government can ever provide.
That way we can begin to get these projects going. We can create more jobs, grow the economy, increase liquidity, and also even increase our export proceeds. These are all things that the private sector is better positioned to do. But we need to create an enabling environment. We need to catalyze that. We need to make sure we take away the bottlenecks that prevent the private sector from engaging with the government and bringing in capital.
Q: MOFI has an ambitious target to raise N100 trillion revenue in 10 years. How confident are you that MOFI will be able to meet this target within the period?
TAKANG: Without sounding immodest, I believe in 10 years that figure will be much more than that. Let me give you an example. When we talk about assets under MOFI’s management, today, just to give you a sense of what we have, NNPC alone, based on current valuation, in terms of the value of its assets, is worth $60 billion, and MOFI owns 50% of it. So, do the Maths.
The federal government shares in Nigeria LNG are not included in that calculation. Do the numbers. The value of our infrastructure assets, including airports, seaports, highways, bridges, etc. are not included in that figure.
By the time we incorporate those assets, and monetize them, you can begin to imagine what value we’re talking about. And even for those infrastructure assets, we have not talked about the concessions that are on each of those assets and the monetary value that come from those concession rights. Those are not included in the figures we’re talking about.
So, you can begin to get an idea of what we are talking about. The President recently created the Ministry of Blue Economy, which talks about our marine infrastructure, as well as our resources and endowments. Those are not included in the valuation of the country’s assets. By the time we start looking at the monetary value of those assets, in the blue economy, you begin to get an idea of what we’re talking about. We’ve talked about the creative economy.
The valuation we had initially when we started do not include any of the assets in the creative economy. You can begin to talk about that.
Our solid minerals assets were not included in the original estimates we talked about. So, by the time we begin to quantify our solid minerals assets alone nationwide, and federal government’s interest in those, you can begin to get a sense of the quantum that we’re talking about.
The real estate assets located in the east to west, north to south of this country, whether they are residential, commercial, or industrial, we’re not included in the original estimates. By the time we do the evaluation of those, you can begin to get a sense of what we’re talking about.
Our real estate assets offshore. Almost every major city around the world that the federal government owned assets were not included in original estimates. And in most cities around the world that we own assets, they are in prime locations. These assets are high value assets.
So, by the time you identify those, enumerate them, value them, you can begin to get a sense of what we’re talking about. So, our view is that this country is too endowed to be poor.
But we need to change our mindset and strategy on how we manage, rationalize and monetize our assets as well as the value we create from those assets. That, for us, is a clarion call, not only to move, but to all Ministries, Departments and Agencies (MDAs) who are currently sitting on those assets or superintending over those assets.
And let me make one thing very clear, MOFI’s mandate or goal is not to take away those assets from anyone. No. It is to make sure we have a single view; a single source of truth as to what the federal government owns. Because it is through that that we can begin to take steps to optimize those assets. It is through that that we can begin to know what is the best way to monetize those assets and get the most value from those assets to the benefit of Nigeria and Nigerians.
Q: The N100 trillion asset base target, is it liquid and solid assets, in terms of good liquid assets?
TAKANG: Yes, it is. We have financial assets and non-financial assets.
Q: The world is moving away from fossil fuel (crude oil) and going to renewable energy. With your quest to optimize revenue, do you think about the fact that interest could shift from crude oil to green energy?
TAKANG: It’s already happening. NNPC is in the vanguard of that transition. But the transition into non-fossil fuel does not happen overnight. That’s why MOFI will focus a lot on issues that have to do with gas – compressed natural gas (CNG) to be precise. We are leveraging our natural gas endowments for clean energy. That’s why steps are being taken to ensure that we have that transition, but also to maximize returns from our oil and gas assets so that we can invest in other sectors of the economy and in those clean energy projects that are already on the table.
