Fed Govt Transfers DISCO Shares to MOFI
By Patience Ikpeme
The Federal Government has transferred its equity holdings in all electricity distribution companies (Discos) from the Bureau of Public Enterprises (BPE) to the Ministry of Finance Incorporated (MOFI). This marks the end of the BPE’s 12-year authority over the shares.
The decision comes after the recent revocation by MOFI of a 2012 Power of Attorney granted to the BPE, signaling the government’s intention to directly manage its equity across various entities.
Communicated through two separate letters, signed by Minister of Finance and Coordinating Minister for the Economy, Mr. Wale Edun, and MOFI CEO Dr. Armstrong Takang respectively, this move is justified by the completion of the Disco privatization process in 2013 and the subsequent repeal of the Electric Power Sector Reform Act 2005 (EPSRA).
The first letter terminates the 2012 Power of Attorney (POA) granted to the BPE by MOFI, allowing MOFI to resume control of the government’s equity interest in the successor companies of the Power Holding Company of Nigeria (PHCN).
According to Minister Wale Edun, the privatization process concluded in 2013, and it is now the government’s wish for MOFI to assume ownership, management, and control of its equity holdings as outlined in its establishment Act.
Previously, the BPE had been authorized to transfer shares of the PHCN successor companies and undertake related actions on behalf of MOFI. However, with the privatization completed, MOFI has been tasked with directly managing these holdings in accordance with existing laws.
As per the Minister’s directive, the MOFI Board of Directors will revoke the 2012 Power of Attorney granted to the BPE, assume ownership, control, and management of all government equity holdings in the PHCN successor companies, manage other government equity holdings in line with relevant laws and contracts, and issue the necessary notices and documents to implement this directive.
The second letter, signed by MOFI CEO Dr. Armstrong Takang, aims to streamline equity management and enhance government influence in the sector.
Ever since the privatization of Discos in 2013, the BPE has acted as the custodian of the government’s shares and appointed directors to their boards. However, considering the repeal of the Electric Power Sector Reform Act 2005 and internal restructuring within MOFI, the Minister of Finance has revoked the Power of Attorney granted to the BPE, instructing MOFI to directly manage the government’s holdings.
Following this directive, immediate changes will include the removal of BPE-appointed directors from Disco boards, the replacement of existing BPE-held share certificates with new ones issued to MOFI, and the requirement for Discos to submit board minutes, reports, plans, and financial statements from 2021 to 2023 to MOFI.
