BPE to Offer Eleme Petrochemical, Discos, Nicon Insurance to Public in 2024
By Patience Ikpeme
The Bureau of Public Enterprises (BPE) has announced plans to sell the remaining 40% government stake in five key public enterprises to the public through Initial Public Offerings (IPOs) on the capital market in 2024.
This move follows the successful privatization of a 60% stake in these enterprises to core investors.
The enterprises slated for IPOs include: Eleme Petrochemicals Company Limited (EPCL), a major player in the Nigerian petrochemical industry; Nigeria Re-insurance a leading national reinsurance company; Nicon Insurance formally a prominent insurance provider in the country.
Others are: Discos (Distribution Companies) responsible for the distribution of electricity to various parts of Nigeria and the Nigeria Machine Tools (Oshogbo).
BPE’s Director-General, Mr. Alex Okoh, confirmed the development during a media chat in Abuja. He highlighted the significant progress achieved in the privatization programme in recent months, attributing it to increased investor confidence under the current administration.
“The reception of the privatization ideology is gaining more traction under the current administration compared to the past,” Okoh stated. “The President’s efforts to attract Foreign Direct Investments (FDI) and create an enabling environment for local investments demonstrate a strong commitment to promoting economic development.”
Okoh emphasized the credibility of IPOs as a strategy for selling government stakes in these enterprises. He noted that once ownership challenges within some Discos are resolved, the process will proceed swiftly.
“We plan to take Eleme Petrochemicals, Nigerian Reinsurance, and Nicon Insurance to the market,” Okoh explained. “We had previously initiated the process for Nicon Insurance but encountered challenges with the core investor, Jimoh Ibrahim. Additionally, Nigeria Machine Tools will also be offered through an IPO.”
To effectively facilitate these IPOs and other key activities, the federal government has allocated N2.4 billion to the BPE in the 2024 budget. This includes N1.4 billion for personnel costs, N824.48 million for salaries and wages, N575 million for allowances and social contributions, and N80 million for training.
The BPE’s commitment to transparency and stakeholder engagement will be crucial in ensuring the success of these IPOs. By effectively educating the public and addressing stakeholder concerns, the BPE can facilitate a smooth and successful process that benefits both the government and Nigerian investors.
This initiative represents a significant step towards further diversifying Nigeria’s capital market and attracting new investments into key sectors. The successful execution of these IPOs has the potential to boost economic growth, create jobs, and enhance public participation in these critical enterprises.
