A Review of the Nigerian Energy Industry

FG advised on privatisation of Kaduna Disco

power_transformer15 July 2013, Lagos – Stakeholders in the nation’s capital market have urged the federal government to give priority to companies listed on the Nigerian Stock Exchange, NSE, in the sale of Kaduna Power Distribution Company, Kaduna Disco, as the privatisation process of the firm enters the financial bid stage.

The National Council on Privatisation, NCP, had last week approved seven prequalified bidders for Kaduna Disco including: Axis Power Distribution Limited; Nahco Consortium; Incar Power Limited; Aiteo Consortium; LEDA Consortium; Northwest Power Limited; and Copperbelt Consortium.

And among them, Nahco Consortium is a subsidiary of Nigerian Aviation Handling Company that is already listed on the NSE. Stakeholders said giving priority to a listed company has many benefits for both the government and citizens.

A stockbroker and Chief Executive Officer of Crane Securities Limited, Mr. Mike Ezeh, said selling the Kaduna Disco to a listed firm means democratisation of government’s resources.

“It will mean giving back to the people what belongs to them because a listed firm has many shareholders and thus they would benefit more. But if it is sold to an individual, the benefit will only be enjoyed by a few,” he said.

Shareholders of NAHCO has at the 32nd annual general meeting held in Abuja last Friday, said the government should consider NAHCO for the Kaduna Disco.

For instance, the National Coordinator, Independent Shareholders Association of Nigeria, Sunny Nwosu said if the company is sold to a quoted company, the value will go to more Nigerians.

“Whatever belongs to the federal government belongs to the people. And if such properties are being sold, it is better to sell to companies that are quoted so that many people will benefit from the profit. It makes more sense that way than allowing some individuals to continue to grow richer at the expense of majority of the people,” Nwosu said.

Speaking in the same vein, Mr. Oderinde Taiwo of Proactive Shareholders Association of Nigeria, said considering efforts to deepen the capital market, selling the disco to a company that is already listed would be the right way to go.

“That is where other economies are looking into because many people will benefit if the company is sold to a listed entity. Both big and small investors will benefit from the sale,” Taiwo said.

In his view, Mr. Olufemi Timothy of Renaissance Shareholders Association of Nigeria said the government should give consideration to quoted companies in the privatisation of the Kaduna disco.

“The benefit that will accrue to listed firm will have multiplier effect. It will generate employment for many Nigerians. Also a listed firm is paying various forms of taxes to the government. By patronising listed companies, the government would be indirectly encouraging more firms to list on the exchange and this will help to deepen the market. We are therefore appealing to the government that these discos should be given to quoted companies so that several thousands of Nigerians would benefit from it,” Timothy said.

– Goddy Egene, This Day.

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