Nigerians access loans to purchase shares
March 16th, 2007 Ogbuotobo Chuks || chuks@stockmarketnigeria.com
By Ogbuotobo Chuks
In what would be referred to as a good initiative, at least 400,000 Nigerians applied for the Bureau of Public Enterprise’s (BPE) Privatisation Share Purchase Loan Scheme (PSPLS) when it was advertised about four years ago. The PSPLS was conceived to ensure that every willing Nigerian participates in the privatisation programme of government by subscribing to shares in any government-owned enterprise of his/her choice slated for privatisation.
Under the scheme, the BPE was to give about N10,000 to each applicant to buy shares in government enterprises. In line with this arrangement, the BPE and the participating banks in the scheme were to make available the sum of N10 billion for onward lending to the applicants.
The decision for the PSPLS was made to achieve an even distribution of the assets which the federal government was no more holding throughout the country. By the loan process, many Nigerians, especially the active poor are expected to benefit from the scheme. Past reviews of the purchase of such assets of government had favoured some particular parts of the country, a development that government was ready to address.
The scheme which generated a lot of interest was aborted in 2004 when the National Council on Privatisation (NCP) refused to approve it because some members had expressed reservations over the cost of the Information and Communication Technology (ICT) infrastructure that was needed to implement it. BusinessWorld Intelligence can reveal that the consultants had put the cost of the ICT infrastructure for the project at about N6.5 billion. This cost is exclusive of other costs that would be incurred by the BPE in the implementation of the project. The NCP could not reconcile this huge cost with the N10 billion loan portfolio and therefore refused to give its blessing to it.
But the BPE said it is still committed to the scheme and would launch it after it had been reviewed. Mr. Chigbo Anichebe, head of Public Communications at the BPE said the scheme is being reviewed by an in-house committee set up by the BPE. He said one of the things the committee is looking at is how to reduce the cost of the ICT infrastructure for the project. “The committee is also looking at how to make the infrastructure sustainable”, he said. Mrs. Irene Chigbue, director-general of the BPE had assured last week that the agency has not dumped the PSPLS.
The BPE had planned to use the PSPLS to empower low income Nigerians to participate in the Initial Public Offerings (IPOs) of state-owned enterprises.
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