A proposed bill to overhaul and strengthen the Ministry of Finance Incorporated (MOFI) is facing opposition from key government agencies, threatening to disrupt reforms that could lift the nation’s investment climate.
The draft legislation, currently awaiting the third reading at the House of Representatives, seeks to reposition and empower MOFI as the sole custodian, manager, and investment vehicle for all assets owned by the Nigerian government.
Entitled ‘A bill for an act to repeal the Ministry of Finance Incorporated Act, Cap M229 laws of the Federation of Nigeria 2004 and to enact the Ministry of Finance Incorporated (Establishment etc.) Act,’ it was sponsored by Ademorin Kuye, a member of the House of Representatives representing Shomolu Federal Constituency in Lagos.
The proposed law has, however, sparked concerns from related agencies such as the Bureau of Public Enterprises (BPE), the Economic and Financial Crimes Commission (EFCC), the Debt Management Office (DMO), the Asset Management Corporation of Nigeria (AMCON), and the Nigeria Sovereign Investment Authority (NSIA), citing overlaps with their respective mandates and warning of institutional disruption.
Their concerns are contained within clauses 3-7 of the proposed bill relating to objects, functions and powers ascribed to corporations, powers on investment and securitisation of loans and validity of previous instruments.
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Clause 3b states, “The objects of the corporation shall be to: hold and manage all assets and investments of the federal government to ensure productivity and sustainability.”
Subclause(d) of the proposed law expressly designates MOFI as the investment vehicle and sole manager of all federal government’s assets.
Clause 5(c) permits it to “invest in, purchase, maintain, divest from, sell, or otherwise realise assets or investment of any kind,” while subclause 5 (e) allows the corporation to “borrow or raise money (including money in a currency other than naira).”
While the MOFI Act grants it the power to enter into contracts, acquire property, and even mortgage or dispose of assets, it does not explicitly outline borrowing as a primary function.
Clause 5 (h) empowers MOFI to, “without prejudice to the generality of the provisions of any section of this Act, the corporation may commence any action or other processing in any court for the recovery of any sum of any right, title, interest, property or thing whatsoever due or payable for the enforcement of any covenant under any of the assets or securities referred to in this Act and also may take such other lawful means for recovering any such sum or money owed the federal government as may required.”
Clause 6 further gives the corporation the power to secure money lent by the government or money due and payable to the government.
Agencies’ opposition
But in a detailed memorandum to the House seen by BusinessDay, the BPE argues that Clause 3, if enacted as proposed, would necessitate “a radical legal and practical restructuring that would disrupt NAICOM, DMO, ICRC, NSIA, OAGF and potentially strip them of similar or related functions.”
“Investments are obviously very sensitive to climates of uncertainty,” the BPE warned, noting that a comprehensive legislative review, not a standalone amendment, would be required for such a sweeping change.
According to the BPE, this concern is amplified by the proviso to Section 5(k) of the bill, which evinces an intention to take overall assets currently being managed by it on behalf of the federal government.
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It raised the alarm over the bill’s expansive definition of a ‘portfolio company’ in Section 49, which includes virtually any commercial entity partially or wholly owned by the federal government.
“If not well clarified, this may cause massive uncertainties and undermine the current functions of the affected agencies. In the case of BPE, such uncertainties will no doubt jeopardise ongoing or proposed privatisation and commercialisation efforts, thus eroding investor confidence and equally detrimental to the country’s push towards improving its investment climate,” the memorandum read.
The memorandum also highlighted the DMO’s concerns about Clause 5(e), which gives MOFI the authority to “borrow or raise money (including money in a currency other than naira),” potentially encroaching upon its statutory role in debt issuance and management.
Clause 6, which empowers MOFI to secure money lent or owed to the government, as well as Clause 5(h), which allows the agency to initiate court action for the recovery of any sum owed to the federal government, were also flagged as overreach.
It, therefore, recommended that necessary clauses be introduced to better define the scope of MOFI’s responsibilities in the new dispensation and to give a measure of certainty to related agencies about the continued validity of their activities.
“The Bill should, for instance, exclude assets within the purview of BPE from the asset holding and management powers of MOFI.
“It is also pertinent to add that in some cases, certain of the assets are held on behalf of the three tiers of government, whereas MOFI is only meant to manage those investments and portfolio assets solely owned by the FGN,” the memorandum read.
The EFCC, in a separate memorandum, raised concerns that some sections of the bill clash with its prosecutorial mandate regarding the criminal mismanagement or abuse of public assets as highlighted in Clause 5.
Defending the proposed legislation, Kuye, the sponsor, said MOFI in its current form has underperformed since inception, with public assets across the country suffering from neglect, abuse, and misappropriation.
“Currently, MOFI has only N18 trillion registered as the value of assets in its portfolio. A proposed national asset register could raise this figure to an estimated N350 trillion, significantly bolstering the economy,” he argued.
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He noted that the bill introduces a new governance framework comprising 49 sections aimed at enhancing the custodianship, utilisation, and accountability of federal assets.
MOFI welcomes legislation
Armstrong Takang, managing director and CEO of MOFI, welcomed the legislative push, arguing that the existing legal framework is no longer fit for purpose.
“There have been significant revenue leakages due to poor asset management and lack of oversight mechanisms. The bill, if enacted, would drive improved dividend flows, capital appreciation, and better returns on the federal government’s investments”, he said.
