Nigeria privatisation agency says 37% of privatised companies are non-performing

Nigeria’s Bureau of Public Enterprises (BPE) has said it has privatised 142 enterprises since inception out of which 37 percent are non-performing due to the harsh operating environment.

Alex A. Okoh, director general of the agency disclosed this while receiving members of the House of Representatives Committee on Privatisation who were on an oversight visit to the Bureau in Abuja recently.

The director general attributed the poor performances of the non-performing enterprises to the operating business environment in the country, which led to many private or privatised public enterprises either closing down or relocating to neighbouring countries.

He, however, said out of the privatised enterprises 63 percent of them are doing well. He equally noted that indicated 63 companies were privatised through core investor sale, nine through guided liquidation, one through sale to existing shareholders, five through a public offer and two through liquidation.

He added that eight were privatised through private placement, 41 through concession, two through debt/equity swap and 11 through a sale of assets.

Okoh said out of the number, 94 enterprises have been monitored while the rest have not been monitored because “some were either assets sale or in the first phase of privatization and as such did not fall within the BPE’s monitoring purview”.

A sectoral breakdown of the privatized enterprises indicates that five were in the agricultural machanisation, eight in automobiles, seven in banking and insurance, six in brick making and six in the cement sector.

Others include 10 in energy construction & services, 12 in hotels & tourism, eight in oil & gas, four in paper & packaging, 19 in solid minerals & mining, seven in steel & aluminum, four in the sugar sector, 26 in the marine transport sector, 19 in power and one in telecoms.

The BPE helmsman informed the lawmakers that the Bureau has commenced a thorough review of the non-performing enterprises to ascertain the issues affecting their non- performance.

Okoh also took time to list the new initiatives embarked by the Bureau to include privatization of the Afam Power & Yola Distribution Companies, concessioning of the Terminal B of the Warri old Port, restructuring and commercialization of the Bank of Agriculture (BOA), partial commercialisation of NIPOST, restructuring and commercilisation of the 12 River Basin Development Authorities (RBDAs), reform and commercialisation of three of the nation’s national parks and other initiatives in the power sector.

Earlier, Ahmed Yerima, chairman of the House Committee said that the committee was at the Bureau to have first-hand information on its activities; and to ascertain its compliance with the provisions of the 2017 Appropriation Act in line with the resolution of the House that all ministries, departments, and agencies (MDAs) complied with the Act.

The Chairman assured that the Committee would use its legislative powers to ensure that BPE’s mandate is not usurped by MDAs; and noted that any attempt in that direction was an infraction on the constitution of the country.