BPE Explains Sale of FG’s 21% Shares in Minting Company to CBN

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Alex Okoh
BPE Director General, Mr. Alex A. Okoh

Ndubuisi Francis in Abuja

The Bureau of Public Enterprises (BPE) has explained that the sale of 21 per cent shares of the federal government in the Nigerian Security Printing and Minting (NSPM) Plc, otherwise known as ‘Mint’ to the Central Bank of Nigeria (CBN) was in furtherance to Section 1 (3) of the Public Enterprises (Privatisation and Commercialisation) Act.

The apex bank and the BPE had on Tuesday signed an instrument for the sale of 12.69 billion shares, representing 21 per cent of federal government’s interest in the NSPMC to the CBN.

The BPE, in a statement issued by its Head, Public Communications, Amina Tukur Othman, recalled that the earlier effort to privatise the Mint between 2002 and 2004; pursuant to Section 1 (3) of the Public Enterprises (Privatisation and Commercialisation) Act were unsuccessful necessitating the National Council on Privatisation (NCP) to formulate a different transaction strategy and approved the strategic investment by the CBN in the company.

“The purpose of the strategic investment was for CBN to manage, restructure and restore the company to profitability within a period not exceeding five years, following which it would be privatised by the Bureau, “ the privatisation agency said.

Quoting the BPE Director General, Mr. Alex A. Okoh, the statement noted that the sale of 21 per cent shares of the federal government in the NSPM Plc to the CBN will contribute over N17 billion to the national treasury.

It added that at the signing ceremony for the sale of the federal government’s 12.4 billion shares, Okoh also stated that the conclusion of the transaction represented another success in the implementation of the federal government’s privatisation and commercialisation programme.

Okoh maintained that the federal government was handing over to the CBN; a company with tremendous potential to achieve significant growth. This, he said, could be attested to by the global market for security printing estimated to be worth $27.2 billion in 2017 and is estimated to grow at about 4.8 per cent annually to $34.3 billion by 2022;

According to him, Africa is a fast growing market for security printing, adding that the industry is projected to grow at an average annual rate of 9.6 per cent over the next five years.

“This growth is fuelled by high population growth and increased mobility across the region as well as increased spending on identity programs. The global market for passports and ID cards is valued at around $3.7 billion and is growing at six per cent per annum.

“In the area of its core operation which is currency printing, the total amount of cash in circulation is growing at four per cent per annum globally and is expected to increase at a similar rate in future,” he explained.

He recalled that the earlier effort to privatise the Mint between 2002 and 2004;pursuant to section 1 (3) of the Public Enterprises (Privatisation and Commercialisation) Act were unsuccessful necessitating the National Council on Privatisation (NCP) to formulate a different transaction strategy and approved the strategic investment by the CBN in the company.

“The purpose of the strategic investment was for CBN to manage, restructure and restore the company to profitability within a period not exceeding 5 years, following which it would be privatised by the Bureau.

“In compliance with NCP’s directive, the Bureau warehoused 12.69 billion shares of the Federal Government’s holding in the Mint with the CBN at a par value of 0.50k per share amounting to N6, 344,900,000. It was further agreed that this consideration would be refunded to the CBN from the proceeds of sale realized from the eventual privatization of the company”.

He said the CBN’s strategic investment in the company was a success, achieving its objective of turning around the fortunes of the company and returning it to profitability.

Following the expiration of the strategic investment period, the director general added “the CBN indicated its strong intention to acquire the company on an arm’s length basis, noting the sensitive and strategic nature of the security printing and minting services rendered by the company which include immigration and electoral materials”.

He added that after a careful consideration of the pertinent issues, the Bureau submitted a proposal to the NCP to formalise the sale of 21 per cent of the Federal Government’s interest in the company to the CBN whilst Government would retain an equity holding of 10.1per cent. This proposal was duly approved by the Council.

Also speaking, the CBN governor, Mr. Godwin Emefiele, said that the NSPM is a national asset treasured by the government.

He noted that the company had consistently being a loss maker until the intervention of the CBN, adding that the intervention of the CBN brought to an end the importation of currency to the country.

The governor announced that the company had ceased producing international passports though it has the capacity to execute the task and the company, if well positioned, would sufficiently provide national security materials for the public sector and specialised security materials for the private sector, such as bank cards.