Abdulwahab Isa 
Director-General, Bureau of Public Enterprises, BPE, Alex Okoh, in this interaction with journalists in Abuja, speaks on some of the agency’s engagements and inroad into the health sector. Abdulwahab Isa reports
Bureau of Public Enterprises started a reform process in the health sector. Could you shed light on it?
We initiated a reform before COVID 19, about 2019. We engaged a consultant to help do a diagnostic on the health sector. Essentially, we started off with the aim of ensuring that there is the availability of healthcare, what you may call out of pocket expenses. You notice that at least 80% of the population of the nation are not covered by any form of insurance, health insurance, or the other.
When they engage in health care delivery, they have to pay out of pocket. We felt the issue of health is something that is extraneous to an individual. It’s not something that anybody will deliberately wish on himself unless maybe there is an indulgence in lifestyle that predisposes one to a certain type of ailment. Government as we see in other climes should take on the responsibility of providing health care across the citizens.
So, we dimensioned the various segments of the health delivery systemfrom primary health, to secondary and tertiary. We were able to find out the major challenge with our health care delivery. Of course, there are issues around the administrative framework, but major issues are around funding, financing.
So, we met the president, he set up a Health Reform Committee, which is headed by the Vice President, and we looked at the entire health sector along specific things. Incidentally, the committee met I think about three weeks ago and we’ve come up with what you will call a green paper, a concept notes, essentially on how to restructure the healthcare delivery system in Nigeria. We are also looking beyond the funding, looking at moving a lot of the administrative and decision making to the institutions themselves, especially the medical centers; the teaching hospitals where healthcare is delivered. In the main we’re trying to reposition the health delivery framework in Nigeria, along what you have with the NHIS in the UK, where the public can consume health care delivery, and the government through various means, including insurance will pay for that.
There are ongoing talks about concessioning the Ajaokuta Steel Company. What is BPE’s role in all of this arrangement?
No, we’re not part of it, just like we weren’t in the first initial concessioning. The first concession to global infrastructure was done by the Ministry of Mines and steel development. Currently, we understand that the concessioning process is still being carried out by the ministry. I can say that we were involved in the resolution of the initial concessioning that went sour because one of the assets that was placed under that global concession, which is the warriport, had actually been re-concessioned by the BPE. We were involved in the resolution with global infrastructure to take them out of Ajaokuta. The current concession and process, I believe, is being handled by the Ministry of Mines and Steel.
In the current 2023 fiscal budget, the Federal Government plans to earn N260 billion from privatisation proceeds to fund the budget. What assets is BPE planning to sell?
The expectation in the fiscal plan for 2023 is N260 billion. And the key assets that we are looking at are the power assets. For 2023, five of the NIPP Plants. Incidentally, we are reaching some understanding with the state governors for the sale of those five power plants. And that’s what has really dragged this transaction for the past three years. We are just getting.common stakeholder understanding on the critical need to realise value from those assets now before they depreciate beyond value. Thankfully, last week, we were able to resolve the issues with the governors. For those assets, we are likely to reach financial opening of the bid before the end of the year, which is maybe next week. But the proceeds itself will come in in the first quarter of this year. So, we actually project that, in the first quarter of this year, we’ll be able to exceed the expectation of the budget for N260 billion, by March we should have done that. Let me also add that from the projected sum from the sale of the assets, the portion that actually becomes available to the Federal Hovernment, for the funding of the federal budget is 47 per cent, 53 per cent of that goes to the States because the assets are not federal as such, they are federation assets and they are owned 47 /53 per cent. So we will remit 53 per cent of the entire process to the state governments while the Federal Government will keep 47 per cent, which will be in excess of the 2023 budget expectations.
How much has been realised from privatisation proceeds in the last four years?
To your question, in the past three to four years, our estimate in terms of total revenue generated from privatisation, commercialisation, reform, asset optimisation, would be in the region of about N120 billion to N130 billion. But we also evaluate the mandate of the Bureau beyond just proceeds because there are sector reforms that we’ve also carried out, which, apart from easing and making life a lot easier for the generality of Nigerians. We serve to conserve funds for the federal government, because ordinarily there would have been subventions paid out to those assets and to those.enterprises or sectors that have been reformed to be more commercial in their orientation andthe operation and an example of that is NIPOST. We have carried out the unbundling of NIPOST.
NIPOST properties is a separate entity now from the NIPOST Postal Service, and NIPOST transport and logistics, and these two entities will become operational from the first of January. We just concluded the recruitment of the management staff of those two entities and will become operational from the first of January next year. And the implication of that is that the subsidy from the fiscal purse that would have been going to service is no longer there, so it’s a savings on the part of the government, although it’s not a proceeds that we are generating from that. So some of our sector reform programs are in that mode. They don’t speak to revenues immediately, but at least they save costs for the federal government.
What is the latest development with Discos and lending banks?
First it’s important that we take this for what it is, and it is not a government expropriation of the assets of the core investors because that will negate the principle of privatisation itself. This is purely a commercial transaction between a lender and a borrower. The borrower in this case being the core investors in the 60 per cent shares of the disco.
Now, they step in right according to the loan agreement that provides for the banks to repossess the shares should the disco owners, the core investors not be able to pay on the acquisition loan, that is what has happened. I know that in some quarters that may have been misrepresented that the government took over the Discos, nothing of such happened. Now the banks like you mentioned in the case of Ibadan Disco, AMCON which bought the debts of the initial lending institutions, Benin, Fidelity Bank; Kaduna, Afrexim and Fidelity Bank; Kano, Fidelity Bank; and Abuja Disco, UBA.
So the banks were allowed to step in to exercise their rights over the shares at least to mitigate their exposure on the acquisition facilities to the Discos. Now, the government realizing, being still a 40 per cent shareholder in all of these Discos, that banks are not utility operators, they are not Disco operators then gave the directive that they must exit the ownership of those shares in a maximum period of 12 months. The initial period is six months, and then another extension of six months within which they have to sell those shares to qualified Disco operators, technically competent disco operators, who can then manage the affairs of a utility that supplies electricity. Now in that process, you recall that the intervention in Abuja preceded the other four. Abuja Disco was about this time last year.
The 12-month period is about expiring and we are aware that UBA and a core investor are about to close out on the sale so that they can meet the deadline. Now the liabilities that you refer to are the market shortfalls, that is the remittances for the Discos which they owe the market. Those remittances, those liabilities will remain on the books of the disco. And it will still be an obligation of the Disco to NBET and to the market right for the outstanding bills that they have not paid. The distinction, however, is that the acquisition liability is a core investor issue.
However, the market obligation is for the operating entity the Disco which includes BPE. It’s the company, the operating entity, that owns the market those liabilities, not just the core investor. However, it is the core investor that owes the acquisition loan to the bank. So the core investor will settle the acquisition loan while the company will settle its obligation to the market. The BPE’s role is to ensure that a fit and proper investor acquires those shares right. Our consideration should align but may be different from that of the banks. The banks will be looking for the highest off-take, so that at least they can cover as much of their loan as possible. But for us, we are not looking for the technical capacity to operate the utility.
