Cablegate: Privatization of the Central Mint?
This record is a partial extract of the original cable. The full text of the original cable is not available.
061126Z Jul 04
UNCLAS LAGOS 001364
E.O. 12958: N/A
TAGS: ECON EINV EFIN NI
SUBJECT: Privatization of the Central Mint?
1. (U) Summary: The GON plans to divest itself of
Nigeria's Mint. But, with the Central Bank of Nigeria
vying to buy the majority stake, the privatization of
the nation's official printer is in question. End
2. (U) The media have reported that Nigeria's
government wants to get out of the secure printing
business. In line with GON's initiatives to help get
the country's economy on track, the Bureau of Public
Enterprises (BPE) has recommended that the Nigerian
Security Printing and Minting Company (the Mint) be
privatized and that the Ministry of Finance (MOF) sell
off its 55 percent share. According to a Mint
official, Don Etim, the Nigerian national printer of
paper bills and other secure paper is also 20 percent
owned by the Central Bank of Nigeria (CBN) and 25
percent by a technical partner, De La Rue Company (De
La Rue) of the UK.
3. (U) Etim told Econoff June 29 that the MOF's 55
percent equity is much coveted by both the CBN and De
La Rue. As the Mint looks to a greater commercializing
of its services, it hopes to bid on profitable national
and regional secure paper jobs, such as money and
passport printing. Etim said the Mint has positioned
itself for success by producing products with high-
quality printing equipment from the German company,
Heidelberger Druckmaschinen; using of secure paper
products from the renowned US company, Crane & Co.; as
well as money counting equipment from US-based Currency
Systems International, now a part of De La Rue.
4. (U) Were the government to endorse the sale of
MOF's 55 percent share in the Central Mint, De La Rue
might nonetheless have trouble acquiring it. Through
its technological support to the firm, De La Rue holds
a subscription warrant entitling it to 25 percent
ownership of the Mint. But De La Rue has yet to pay
money for its share of the Central Mint. According to
Etim, the BPE would require full payment of De La Rue's
25 percent share before it might be eligible to buy the
MOF's 55 percent stake.
5. (U) Comment: The other shareholder, the CBN, would
own a 75 percent stake in the Central Mint were the CBN
to pick up MOF's 55 percent equity. The question would
then be, is this really privatization? Would this not
be seen as a power play by the CBN to be both overseer
and operator of the nation's money printing facility?
If such were the outcome, it could be argued that the
BPE would have failed in efforts to privatize the Mint.