In transforming the Ministry of Finance Incorporated (MOFI) to an active investor that drives value for the portfolio, the federal government stands to reap significant rewards, as estimates indicate that the financial value derivable from MOFI’s current portfolio could reach up to NGN 100 trillion ($232 million) by 2033.
Minister of Finance, Budget and National Planning, Zainab Ahmed, made the disclosure on Wednesday at the official launch of MOFI at the Presidential Villa in Abuja.
The minister said it was also crucial that MOFI manage government’s investments and assets to derive the maximum value possible from the assets, unlock liquidity from government assets to contribute significantly towards the government’s revenue drive, and cut down on spending on government investments that are not contributing to revenues or even supporting the government’s social and economic agenda.
“We must prioritize government investments and derive the highest return on investment from our assets, such as companies where the government owns a controlling stake, shares in private companies, built-up properties, undeveloped lands, machinery, and intangible assets such as mining rights, spectrum, names, copyrights, etc,” the minister stated.
MOFI was set up in 1959 through an Act of Parliament as a custodian of the Federal Government’s investments in various Government Owned Enterprises (GOEs) and Government Linked Companies (GLCs).
A committee that is chaired by the minister was set up to restructure and reposition MOFI to better serve the asset custody, asset management and investment needs of federal government of Nigeria.
The committee had, among others, recommended the need to restructure and reposition MOFI from its current status of being a passive custodian of federal government investments as a unit in the Office of the Accountant-General of the Federation to becoming a world-class company responsible for making and managing federal government’s investments in accordance with global best practices applicable within the industry.
The second major recommendation of the Committee is to create a “National Asset Register” to enable the government know what it truly owns, determine the value of those assets, and develop strategies to derive maximum value from the different asset classes.
President Buhari had in August 2021 approved the compilation and automation of a comprehensive national asset register by aggregating, profiling, and managing all national assets and investments; undertaking valuation of different classes of assets considered to be strategic to the Federal Government; and creating a robust pipeline of government-owned and government-linked investment opportunities by creating an ‘Investments ‘Hatchery’ and an Investments Deals Room.
Other approvals that were granted by the president to make MOFI a sort of private assets managing company was the development and implementation of guidelines, policies, systems and government structures for auctioning and disposing non-strategic government assets or legally forfeited assets; and development and implementation of policies to deliberately create assets from all concessions related transactions and actively manage these assets by “matching assets to legacy concessions” and “matching assets to future.
Ahmed also disclosed that President Buhari has granted MOFI autonomy in terms of financial independence from the civil service structure, allowing it to operate in accordance with global best practices as a world-class asset and investment management organization.
MOFI is expected to generate revenues to sustain itself by charging management fees for the assets under its management.
