Nigeria: First Phase of Privatisation to be Completed Next Week

13 March 2001
allAfrica.com
By By a special correspondent

Lagos — Processes involved in the first phase of Nigeria’s privatisation will be completed next week, with the allotment of shares in the companies involved, the Director General of the Bureau of Public Enterprises (BPE) said here Tuesday.

Mallam Nasir Ahmad el-Rufai said the conclusion of the processes would come after the remaining meetings on share allotment for three of the 10 companies involved in the first phase of the programme.

Under the first phase of the privatisation programme, the Federal Government sold its shares in the 10 companies in which it had equity interest. The companies, already quoted on the Nigerian Stock Exchange, included banks, cement manufacturing companies and companies marketing petroleum products.

Completion of the allotment of shares, according to Nasir, will lead to a lifting of the cap on the prices of these shares, placed by the Nigerian Stock Exchange. He said the lifting of the cap will have to be approved by the Securities and Exchange Commission, regulator of the capital market.

There had been calls for the privatisation process to be move faster. This phase was planned to run from December 1999 to December 2000.

The shares were allotted equally to Nigeria’s Federal Constituencies, and many of the states were slow in picking up their allotments.

But Nasir said Tuesday that several factors impede the speed of the Bureau. "It’s easy to say that the privatisation process is very slow," he noted: "But there are many problems to deal with."

The problems, according to him, include public enterprises cross-debts, which run into "billions of dollars," the need to balance conflicting objectives of various interest groups, and treatment of surplus labor, and salary arrears.

This year BPE is expected to privatise 42 companies, from various sectors, including hotels, automobile assembly plant, sugar, paper and insurance companies.

Nasir announced that the biggest company to come to the market this year is the Nigerian Telecommunications Limited, the telecom giant and sole national carrier whose performance has been unimpressive.

He said that BPE will sell 51 percent of the shares of NITEL to core investors. This is planned for completion by September this year, through a private placement. Thereafter, he said, there will be an Initial Public Offering of the remaining shares in NITEL to the investing public.

According to him, the privatised NITEL would be listed on several stock exchanges - Cairo, Lagos, London, New York, and Johannesburg.

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