TEXT OF A PRESS STATEMENT BY THE HONOURABLE COMMISSIONER FOR INDUSTRY, TRADE AND INVESTMENT, PROFESSOR TERSOO KPELAI ON THE PLANNED PRIVATIZATION OF SOME STATE OWNED ENTERPRISES
11th April, 2018.
Ladies and gentlemen, I wish to first and foremost appreciate all Benue sons and daughters at home and in the diaspora for their positive reactions regarding the decision of the State Council on Privatization and Commercialization of Public Enterprises to revive our moribund industries and other erring state owned enterprises. We also appreciate other sons and daughters of the state who hold negative views regarding this economic reform programme.
One of the present administration’s economic policy focus is to develop an agricultural – driven industrialization that will provide value added- inclusive economic growth in Benue state. Reviving our moribund State owned industries is a strategic activity towards achieving this agricultural – driven industrialization policy.
It is worthy of note that two options exist presently to revive moribund industries and other state owned enterprises these include :
1. State Government will inject more funds for turn-around of the factories and enterprises.
2. Wholly privatize these enterprises or partially transfer ownership of such enterprises to private hands /investors.
Our choice to privatize wholly or partially , the eleven (11) enterprises advertised in The Nation Newspaper of 10th April, 2018 is anchored on the principles of bringing efficiency, effective performance and economic prosperity of the state.
Gentlemen of the press, it may interest you to know that all the 11 enterprises listed for privatization were established for over a decade but most of these enterprises are not operational in the last six years and even the ones that are sparingly operational do so at loss.
Privatizing has therefore become the only option since Government currently has developmental challenges with slim resources. Privatizing these enterprises will bring efficiency and effective performance as investors will bring in capital, new technology, skills, better management expertise among others which will make these enterprises more profitable.
These enterprises if run profitably will provide job opportunities for our teeming youths, create wealth, boost the state IGR and create value chain across diverse sectors of the Benue economy.
Let me reemphasize that the desire to privatize these enterprises is not for personal gains but for economic prosperity of the state. The present administration’s commitment to transparency and accountability is unparalleled and that is why we have as specified by the law undergone due process by advertising the enterprises to the public in a reputable newspaper like “the Nation” for international and local investors that have the capacity to take advantage of the window and invest in our dear State.
It is also pertinent to inform the people who hold negative views about privatization to readress their minds because economic policies are driven by facts and prevailing societal challenges and not on the basis of sentiments or assumptions. Most of the enterprises listed for sale have remained comatose for decades serving more or less as monuments and not adding any economic value to the state. More so , the privatization law provides the retention of not less than twenty (20) percent equity shares by the State /indigenes.
It is a statement of fact that lease arrangement provides as a component of privatization the right of first refusal to the lessee to purchase the company if the lessor decides to sale. It is in light of the aforementioned that the State Council on Privatization and Commercialization of Public Enterprises has included companies held by lessees in the State. This provision is a win-win option. The privatization law states that the leased enterprises be advertised to the public for the purposes of transparency and accountability.
Permit me to specifically throw more light on the inclusion of Makurdi Modern Market and Benue Links Ltd.in the ongoing exercise. Half of the Modern Market was gutted by fire in 2005 and 2011. This has forced a drastic drop in the revenue of the market by more than 70%. In the last couple of years, we have been battling with a collapsed fence, infrastructural decay, flood due to poor drainage system at the market during raining season among others . We need to upgrade these infrastructural facilities and rebuild the burnt part of the market. Sourcing for an investor who accepts lease /concession arrangement to reconstruct the market and upgrade facilities to meet global standards.
Benue Links Ltd on the other hand will be partially privatized in the ratio of 51% and 49 % equity retained by the government. The emphasis is on private placement. It is the decision of the State Executive Council to retain the brand name of Benue Links Ltd. Partially privatizing Benue Links Ltd. will help the company overcome managerial, technical, funding challenges among others undermining its operations.
Finally, let me state that the present administration’s commitment is to revive our moribund industries, create enabling business environment, help Benue people to imbibe enterprise values, start vibrant SME’s across the state. This will ignite a private sector driven development that will usher in unprecedented economic prosperity today and even generations to come.
Thank you and may God bless.