Ministry of Finance Inc., NGX Partner to Meet N100m AUM Target
The Ministry of Finance Incorporated (MOFI) on Monday partnered with the Nigerian Exchange Ltd., (NGX) to grow its Assets Under Management (AUM) from N18 trillion to N100 trillion within the next 10 years.
Dr Armstrong Takang, Chief Executive Officer (CEO), MOFI, said this during the Closing Gong Ceremony, in honour of MOFI’s engagement with capital market stakeholders at the NGX trading floor in Lagos.
Takang stated that the partnership was geared toward developing a roadmap to bring some of the entities under its management to the capital market for trading.
He said that MOFI and the NGX leadership team, in an ongoing process, would work out the timeline and modalities to achieve the laid down objective in the interest of both parties and the broader economy.
“We see a major role that the capital market, driven by the NGX plays in economic growth.
“MOFI, being an integral part of the Federal Government, in terms of managing its investments and assets, needs to contribute towards economic growth.
“We need to forge a relationship with any entity or stakeholder that will help us deliver on that mandate, and that is why we are here, ” he said .
According to him, the government has an interest in a lot of entities, hence, MOFI being repositioned, had to do a re-assessment on some of the corporate assets.
This, he noted, had brought the net asset value of some of the assets to N18 trillion.
Takang explained that the target given to the organisation as a team is to grow the AUM from N18 trillion to N100 trillion within the next 10 years.
The MOFI boss disclosed that there were some assets that the country was really not optimising well.
He expressed optimism that with the right structures, capital deployed, right management and governance, the value of the assets would be increased.
Takang said: “the increment will come from optimisation and providing additional capital to the existing assets.
“We have a number of government-owned assets that are not yet captured, such as : our infrastructural asset, a large percentage of the oil and gas asset and the real estate asset.
“Also, our concession asset, financial asset and a lot of intangible assets, especially in the technological space are not included.
“We believe that by the time we go through a proper enumeration process of these different asset classes, do the valuation, profile them and work with transactional advisers, we will get closer to our target.
The MOFI CEO expressed that by bringing some of the assets to the capital market, the true value would be reflected, rather than the net value which is presently used, and does not reflect the true value of the assets.
Takang noted that the NGX provides a strong platform for MOFI to do price discovery and understanding the value of the assets.
According to him, the requirements for entities to be listed on the Exchange, which include signing up to transparency and accountability to shareholders, would help the organisation to deliver its mandate.
“The fact that there is a regulatory arm of NGX, gives us more confidence to say confidently to our shareholders that their assets are safe because there is someone whose main job is to ensure that their assets are protected,” he said.
In his address, Mr Temi Popoola, CEO NGX, lauded MOFI for the strategic engagement and its continous support and commitment to the market.
Popoola said that NGX has a broader responsibility to key into nation building and the conversation with MOFI fits into the mandate.
He stated that MOFI has several companies assets in its portfolio, and the capital market and NGX could help them build the entities and in turn the broader economy.
According to him, the NGX would help MOFI to standardise the companies it was managing, improve their level of governance, transparency and performance, to help the nation create more wealth.
“Many of these companies also need capital, hence, the capital market is the right place for them to meet some of those capital needs.
“The MOFI’s patnership will also help the capital market to deepen and develop new products, through their base, such as : the digital assets, real estate portfolio and several others assets,” he said.
According to him, the partnership is a right step in the right direction, particularly under the leadership of a President who understands the capital market and can make bold decisions.
In his remark, President, Chartered Institute of Stockbrokers (CIS), Mr Oluwole Adeosun, commended MOFI for extending partnership to the capital market.
Adeosun noted that value creation power lies in the market and as such, MOFI’s asset would transform significantly and exponentially once it starts trading on the floor of the Exchange.
Commenting, the Chairman of ASHON, Mr Sam Onukwe expressed the readiness of the capital market to partner with MOFI to bring discipline to those entities that would be traded.
“With this, the market will witness an era of privatisation and trading of government entities in the market,” he said.
MOFI, is an asset holding and investment management company established in 1959 as a platform to take charge of all investments made by the Federal Government of Nigeria.
It manages a significant portfolio of Federal Government investments, spanning a wide variety of asset classes, including corporate assets, financial assets, fixed assets, mineral and intangible assets and cash-flow-generating transactions. Naira Devaluation Deepens Economic Crisis in Nigeria