Transforming Nigeria's Economy: Privatization Program Overview

1. Nigerian National Privatization ProgramBureau of Public EnterprisesFederal Republic of NigeriaJune, 2000-April 2003United States Agency for International Development***International Business and Technical Consultants, Inc.

2. Bureau of Public EnterprisesFederal Republic of Nigeria • About the BPE: • Secretariat of the National Council on Privatisation (NCP) • Implements the policies and decisions of the NCP

3. Bureau of Public EnterprisesFederal Republic of Nigeria • Main Functions of the BPE • Manages the privatisation of enterprises for the Federal Government of Nigeria, including: the appointment of consultants, advisers, investment bankers, issuing houses/stockbrokers, solicitors, trustees, accountants and other professionals

4. Bureau of Public EnterprisesFederal Republic of Nigeria • Main Functions of the BPE(cont’d) • Prepares approved PE’s for privatisation and commercialisation • Advises on further public enterprises that may be privatised or commercialised • Advises on capital restructuring needs of the PE’s to be privatised

5. Bureau of Public EnterprisesFederal Republic of Nigeria • Main Functions of the BPE (cont’d) • Ensures the update of accounts of all commercialised enterprises for financial discipline • Conducts effective post transactional performance monitoring and evaluation to ensure success

6. Implementation of Phase II Nigerian National Privatization Program Phase 2a – 63 Enterprises – Financial Services - 4 Hotel Companies - 5 Media Enterprises - 2 Communications. (NITEL) - 1 Transport and Aviation - 4 Steel, Oil Palm, Sugar, etc. - 47 Phase 2b – 26 Enterprises Financial Services - 3 Hospitality & Tourism - 5 Mining & Minerals - 4 Comm. (NIPOST) – 1 Various Others – 13 Phase 3 – Telecoms, Electricity, and more Bureau of Public EnterprisesFederal Republic of Nigeria

7. Bureau of Public EnterprisesFederal Republic of Nigeria • Economic Gains From Privatisation • More responsive market-oriented economy • Increased competitiveness of specific enterprises, sectors and economy as a whole • Improved company efficiency • Greater direct foreign & domestic investment

8. Bureau of Public EnterprisesFederal Republic of Nigeria • Institutional & Political Gains from Privatisation: • World-standard agency procurement capability • Substantial revenues from enterprise sales • Substantial budgetary subsidy savings • Frees government resources to be applied to health, education and other social services

9. Bureau of Public EnterprisesFederal Republic of Nigeria • Characteristics of a Well-Functioning Procurement System: • Transparent • Competitive • Economic • Efficient

10. Bureau of Public EnterprisesFederal Republic of Nigeria • About the Project: • Contracted through USAID • Coordinated with World Bank and DFID programmes • “Core Team” approach • Expatriate Technical Advisors

11. Bureau of Public EnterprisesFederal Republic of Nigeria • Project Purpose - to assist BPE Project Priority development of transparent and accountable procurement procedures for enterprise privatization transactions

12. Bureau of Public EnterprisesFederal Republic of Nigeria • Project Purpose - to assist BPE • Enterprise Privatisation Transactions • Labor Relations • Communications • Procurement and Management Information Systems

13. Bureau of Public EnterprisesFederal Republic of Nigeria • Core Team Approach Brings Essential Sustainable Skills • Core Team - local or dual-nationals seconded to BPE from industry with: • Organizational Strength • Procedural Experience • Legal Expertise

14. Bureau of Public EnterprisesFederal Republic of Nigeria • Core Team Approach Provides In-House Capabilities to: • Manage increased level of privatization transactions • Ensure procedures are strictly followed • Expand skills of existing and new staff • Support policy decisions of NCP • Ensure Transparency of Process

15. Bureau of Public EnterprisesFederal Republic of Nigeria • Key Ingredients to Core Team Success: • High-level Executive Branch Political Will • Dynamic BPE Management Direction • Donor Agency Support and Encouragement • Professional Technical Assistance/Guidance • Skilled and Motivated Core Team Members • Receptive and Participative Bureau Workforce

16. Bureau of Public EnterprisesFederal Republic of Nigeria • Services Provided to Assist BPE: • Document current policies, procedures, and processes and identify additional requirements • Review and assess policies, procedures, and processes for compliance with Government and World Bank guidelines • Assist development of plan to strengthen procedures and processes, especially IT/MIS systems applications • Supervise development of procedures and processes documentation

17. Bureau of Public EnterprisesFederal Republic of Nigeria • BPE IT/MIS Procedure and Process Strengthening: • Identify optimal level of computerization to achieve desired functionality and integrity • Identify and quantify need for customization to support core and non-core BPE requirements • Assist development of specific MIS applications

18. Bureau of Public EnterprisesFederal Republic of Nigeria • BPE Procedures and Processes Set Government Target for Professionalism: • Achieve greater functionality and integrity in procurement processes • Help local consulting companies and enterprises meet fair bidding criteria • Reduce “insider” transactions • Increase number of bidders on assets

19. Bureau of Public EnterprisesFederal Republic of Nigeria • BPE Previous Structure: Director General Operations Planning & Monitoring Council Affairs Finance & Administration Legal Services

20. Bureau of Public EnterprisesFederal Republic of Nigeria • BPE Previous Structure: Director General Office of Director General – Core Services Oil &Gas Infrastructure & Networks Natural Resources Services Sector Industry & Manufacturing Transport & Aviation

21. Bureau of Public EnterprisesFederal Republic of Nigeria • Office of Director General – Core Services: • Internal Support Functions • External Relations Functions • Monitoring and Compliance • Oversight

22. Bureau of Public EnterprisesFederal Republic of Nigeria • Internal Support Functions : • Central Administration • Information Technology Systems • Finance & Accounts • Human Resources • General Counsel and Council Secretariat

23. Bureau of Public EnterprisesFederal Republic of Nigeria • External Relations Functions : • Media Relations • Issues Management • Communications • Marketing

24. Bureau of Public EnterprisesFederal Republic of Nigeria • Monitoring and Compliance : • Program Planning • Program Monitoring • Research

25. Bureau of Public EnterprisesFederal Republic of Nigeria • Oversight: • Internal Audit & Due Process • Anti-Corruption

26. Bureau of Public EnterprisesFederal Republic of Nigeria • IBTCI Project Achievements: • World-class sustainable procurement system incorporating World Bank Guidelines • Holistic programmatic and project approach to successful privatisation program • $460 m. in privatisation revenues over 2 ½ years • Increased capacity and ability of domestic investors in national economic assets

27. Bureau of Public EnterprisesFederal Republic of Nigeria • Privatisations Accomplished: • NAL Merchant Bank, Plc • International Merchant Bank, Plc (IMB) • UNIPETROL, Plc • First Securities Bank International Bank, Plc (FSB) • ASHAKACEM, Plc. • WEST AFRICAN PORTLAND CEMENT, Plc (WAPCO) • CEMENT COMPANY OF NORTHERN NIGERIA, Plc (CCNN) • African Petroleum, Plc (AP) • National Oil And Chemical Marketing Plc • Benue Cement Company Plc (BCC) • Nigercem Plc • Assurance Bank of Nigeria (ABN) • Afribank PLC

28. Bureau of Public EnterprisesFederal Republic of Nigeria • Privatization Support Project Example of going forward: • IDA Credit-supported 1) National public awareness program 2) Lagos State Water Corporation 3) Future additional activities

29. Bureau of Public EnterprisesFederal Republic of Nigeria • National Public Awareness Campaign Objectives • Generate awareness and support for privatization program • Improve privatization program transparency and increase public trust by providing extensive information • Attract potential domestic and foreign investors • Strengthen sustainable regional communication team • Shape public attitudes about privatization through accountability

30. Bureau of Public EnterprisesFederal Republic of Nigeria NATIONAL COORDINATING COMMUNICATION CONSULTANT, ZONAL COMMUNICATION CONSULTANTS AND ZCC-APPOINTED STATE REPRESENTATIVES Corporate and Financial National Coordinating Communication Consultant Bureau of Public Enterprises Public Affairs Unit ZCC South West + 6 State Representatives ZCC North West + 7 State Representatives ZCC South East + 5 State Representatives ZCC North East + 6 State Representatives Quarterly Zonal Workshops ZCC South-South + 7 State Representatives ZCC North Central + 6 State Representatives

31. Bureau of Public EnterprisesFederal Republic of Nigeria • Lagos State Water Corporation Privatization Assist BPE and NPC by: • Review of preparation work to date • Formulation of ownership structure and scope of LSWC concession, activities, & responsibilities • Conducting re-marketing and financial analysis • Structuring transaction and prepare contract • Managing bidding and transaction close-out