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Nigeria Investment - Nigeria Privatisation

Nigerian privatization Programme

The privatization programme will be conducted in a transparent, accountable and comprehensive manner, as it holds the key for reviving our public utilities and engendering foreign investors’ confidence, in the direction we want to move the economy. The business and international community are making privatization an acid test of our seriousness at taking bold policy reform measures. We must act quickly and decisively.


Nigeria, the giant of Africa is on the march again. This time with a bold privatization policy aimed at enhancing operational efficiency and economic viability of her public utilities.

Nigeria Opens Its Doors To Strategic Investors

As part of this policy, the Federal Government will privatize its investments in Telecommunications, Electricity, Petroleum refineries, petro-chemicals, coal and bitumen production, tourism, and spill-overs from the first phase of privatization including banks and cement plants.

Under this new privatization programme, the Nigerian Federal Government will retain 40% of the equities of the affected enterprises whilst 40% will be alienated to strategic investors with the right technical, financial and management capacities. The remaining 20% will be sold to the Nigerian public through the Stock Exchange. The programme has been broken into three phases. Phase I, which is expected to be completed by December 1999, will involve the completion of the privatization of government holdings in commercial and merchant banks, and cement plants already quoted on the stock market.

Phase II will involve the privatization of government holdings in hotels and vehicle assembly plants. The final Phase, which is expected to take place between the year 2000 and 2001 will involve the privatization of electricity supply, telecommunication, petroleum refineries, the national fertilizer plant, and the Nigeria Airways.

Invitation To Participate

The National Council on Privatization (NCP) is giving an open invitation to World Class Consultants, as advisers, in the identification and selection of Core Investors. The Advisers will support the NCP secretariat, The Bureau of Public Enterprises BPEin the process of selecting core investors for consideration by the Federal Executive Council.

The NCP also invites application from potential Core Investors, who are required to submit their expressions of interest to invest in specific public enterprises. Potential Core Investors will be supplied copies of laws and regulations on the privatization process, as well as an information memorandum on specific enterprises. Thereafter, they will be giving specific period within which to undertake due diligence studies on the subject enterprise in order to submit economic bids for evaluation by the NCP.

Enquiries

For more information on the privatization programme, please contact:

The Member/Secretary: National Council on Privatization
Secretariat: Bureau of Public Enterprises (BPE)

Address:
NDIC Building (First Floor),
Plot 447/448 Constitution Avenue,
Central Business District,
P.M.B. 442, Garki Abuja, Nigeria,
Tel: 09-5237405, 5237401, 5237397 Fax: 09-5237396
E-mail: bpe...@micro.com.ng

Nigeria Privatization Programme Phase 2

Implementation of the first phase has been quite challenging as various issues and problems arose in the implementation of the programme. However, lots of lessons were learnt which have consequently informed the design and implementation of the second phase of the privatisation programme.

To this end, implementation plan of the second phase aims to address some of the shortcomings identified in the implementation of the first phase. Some of the measures which have been incorporated in the second phase plan include:

Advisory Services

Advertising for advisory services shall be timely to provide sufficient time to prepare preliminary, followed by a comprehensive information memorandum on each of the affected companies for the use of prospective core investors. However, only applications received from consultants already registered with the Bureau of Public enterprises (BPE) would be entertained.

Merit Based Application

Expressions of interest (EOI) from prospective privatisation advisers shall specify the following as bases for prequalification:

Qualification of staff and their individual experience in handling similar assignments in Nigeria and abroad. Evidence of track record in a similar industry or transaction in Nigeria or elsewhere in the world.

Intended approach to the assignment (workplan).

Proof of alliances/partnership with other competent domestic and international advisers who have requisite qualification, experience and track record in the industry or transactional type.

Competitive Fee Quotation

The shortlisted firms will be required to submit separate technical and financial proposals to BPE. The technical proposal will describe how the assignment will be executed and the persons and other resources to handle it. The financial proposal will quote the fees and the expenses to be paid in the services.

These will be subject too negotiation, if necessary.

Objective Evaluation And Selection

The two separate proposals will be evaluated and each graded as follows:

Fees and expenses quoted in relations to others will be given a weight of 40 per cent. The fees and expenses shall consist of base fees and expenses, and indication of success fees.

Quality of approach to the assignment:

The approach, staffing, equipment and other resources for the execution of the job. Issues to be considered here include local content, development of Nigerian human capital, and so on. In addition, a time limit shall be imposed such that all advisory services should not exceed 6 weeks to be carried out and completed from date of appointment by the National Council on Privatisation (NCP).

Core Investor Prequalification

Prospective core investors will be pre-qualified before being invited to formally submit bids for each of the companies they wish to emerge as core investors. This approach will ensure that unqualified companies are not afforded an opportunity to spoil a rational bidding situation.

Scope of the Second Phase of the Privatisation Programme

As indicated in Mr. President's speech of July 1999 launching the Privatisation Programme, the second phase of the programme is concerned with public enterprises engaged in sectors where the prices of their output are largely market determined. A total number of 39 public enterprises are initially slated for this phase.

These enterprises are broadly classified as follows:

  • .2 No. Insurance Companies
  • .5 No. Hotel Companies
  • .10 No. Oil Service Companies
  • .4 No. Sugar Companies
  • .6 No. Motor Vehicle Assembly Plants
  • .2 No. Media Companies
  • .3 No. paper Mills
  • .4 No. African Investment; and
  • .2 No. Transport Companies

There is likelihood that NCP will add other enterprises engaged in competitive markets during the implementation of this phase of the programme. Details of the Companies slated for privatisation under this phase are listed in Companies Up For Sale below.

Implementation Arrangements

Activities to be undertaken in the implememtation for this phase has been carefully grouped into two broad categories. This is with a view to ensure proper execution and achievement of set goals.

The categories of activities are as follows:

  • Appointments of Privatisation Advisers
  • Selection of Core Investors

The appointment of advisers involves a number of processes which include:

  • Publicatioin and Receipts of Expression of Interest
  • Evaluation of the Interest
  • Issuance and Receipt of Request for Proposals (RFPs)
  • Evaluation of RFPs
  • Preliminary review and preparation and final information memorandum and bidding documents

The Process of Selecting Core Investors will Involve:

  • Advertisement and Receipt of Expression of Interest
  • Pre-qualification of Core Investor Applicants
  • Council approval of successful-prequalification of core investors applicants
  • Issuance of preliminary information/bidding documents
  • Six (6) weeks period of due diligence
  • Submission of bids and opening of bids
Last Updated on Saturday 12th December 2009

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