US embassy cable - 04LAGOS1364

UNCLAS LAGOS 001364 
 
SIPDIS 
 
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 
summary. 
 
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. 
End Comment. 
 
KRAMER