FG Speaks On Why It Sold Its Stake In Security Printing Firm To CBN

The Federal Government has revealed that the sale of 21 per cent of its equity in the Nigerian Security Printing & Minting (NSPM) Plc to the Central Bank of Nigeria (CBN) will yield about N17 billion.

Nigeria sold its NSPMC to CBN…..please February is too far abeg. The people that keep central bank and currency production separate are they mad? Let’s not even get into the financial gymnastics at play. If NASS agreed to this then Saraki doesn’t deserve to be President.

— Phoenix Agenda (@phoenix_agenda) September 19, 2018

Naija News understands that The Director General of the Bureau of Public Enterprises (BPE), Alex Okoh, disclosed this in Abuja on Tuesday at the official signing of the agreement for the sale of the Federal Government’s 12.4 billion shares in the NSPM to the CBN.

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Mr Okoh said the conclusion of the transaction represents another success in the implementation by BPE of the Federal Government’s privatisation and commercialisation programme.

The BPE DG said the Federal Government was handing over to the CBN “a company with tremendous potentials to achieve significant growth.”

He noted that global market for security printing was huge, estimated at about $27.2 billion in 2017.

Today, he said estimates, which is growing by about 4.8 per cent annually, will reach about $34.3 billion by 2022. Besides, he said Africa was a fast growing market for security printing, with the industry projected to grow at an average annual rate of 9.6 per cent over the next five years.

“This growth is fueled by high population growth and increased mobility across the region as well as increased spending on identity programmes,” he said.

The global market for passports and ID cards valued at about $3.7 billion is growing at six percent per annum. In the area of currency printing, which is its core operation, Mr Okoh said the total cash in circulation was growing at about four percent per annum globally and was expected to increase at a similar rate in future.

Between 2002 and 2004, the BPE made efforts to privatise the minting firm pursuant to section 1 (3) of the Public Enterprises (Privatisation and Commercialisation) Act.

But, the BPE DG said it was not successful, necessitating the National Council on Privatisation (NCP) to formulate a different transaction strategy approving the strategic investment by the CBN in the company.

“The purpose of the strategic investment was for CBN to manage, restructure and restore the company to profitability within a period not exceeding five years, following which it would be privatised by the Bureau,” he said.

In compliance with NCP’s directive, the BPE warehoused N12.69 billion shares of the Federal Government’s holding in the Minting firm with the CBN at a par value of 0.50k per share amounting to N6.35 billion.  It was further agreed this consideration would be refunded to the CBN from the proceeds of sale realized from the eventual privatization of the company.

Mr Okoh dislosed that CBN’s strategic investment in the security printing and minting company was a success, as its objective was to turnaround its fortune and return it to profitability.

At the expiration of the strategic investment period, the DG said the CBN had indicated its strong interest in acquiring the company on an arm’s length basis.

He said the sensitive and strategic nature of the security printing and minting services rendered by the company, including other security documents for immigration and electoral materials.

After a careful consideration of the important security issues, Mr Okoh said the bureau submitted a proposal to the NCP to formalise the sale of 21 per cent of the Federal Government’s interest in the company to the CBN.

Under the new arrangement, which was duly approved by the privatization council, the Federal Government would retain an equity holding of only 10.1 per cent.

The governor of the CBN, Godwin Emefiele, said the NSPM was a national asset treasured by the government. Mr Emefiele said the company had consistently been a loss maker until the intervention of the CBN, bringing to an end the importation of currency to the country.

The CBN governor announced that the company had ceased producing international passports, although it has the capacity to do so. If well repositioned, he said it would sufficiently provide national security materials for the public sector and specialised security materials for the private sector, such as bank cards.