ECONOMY: Businessman Buys Benin’s Largest Oil Company

By Ali Idrissou-Toure Reprint | | Print |

Ali Idrissou-Toure

COTONOU, Jul 13 1999 (IPS) - Sefou Fagbohoun, a Beninois businessman, who is also the president of Continental Petroleum and Investment Company (CPI), has become a majority shareholder in Benin’s largest National Society of Petroleum Product Marketing (SONACOP).

CPI, a subsidiary of the Fagbohoun Group, settled its remaining installment of 8.25 billion CFA francs for a 55-percent share of SONACOP, on June 30.

One US Dollar is equal to 550 CFA francs.

The Group also acquired a 10-percent share, worth 1.5 billion CFA francs, reserved for SONACOP’s 400 employees, which the new company plans to retain. The government will continue to hold 35 percent of SONACOP’s shares.

Dieudonne Lokossou, a top SONACOP union official, welcomes the CPI’s decision to acquire the company. For the 400 employees, the purchase means that “SONACOP’s money will stay in Benin”.

“SONACOP is a high-return company”, says Lokossou. Created in December 1974, the state-owned enterprise had a turnover of 66.546 billion CFA francs in 1998, before remitting 17.466 billion in taxes, he notes.

The Minister of Finance and Economy, Abdoulaye Bio Tchane, urged the CPI “to increase SONACOP’s turnover” so as to raise more tax for government.

After winning the bid, Fagbohoun says, “it’s not Fagbohoun who has come out on top, but all Beninois.”

“If I fail,” he says, “it’ll be all Benin who would have failed.”

The Minister of State, in charge of Planning, Economic and Job Creation, Bruno Amoussou, also welcomed SONACOP’s takeover by “a native Beninois”.

“No country has ever been able to develop when its decision- making centres are based abroad”, Amoussou says. “It’s the only way our economy will get a chance to take off in this global competition.”

Since Benin and the World Bank signed the 1995 Structural Adjustment Programme (SAP), obliging the government to privatise SONACOP, the West African state has witnessed a wave of activities to privatise the country’s loss-making, state-owned corporations.

SONACOP beat out eight other petroleum companies: Oryx-Benin, Mobil, Total-Outre-Mer, Elf Oil Africa, Shell, Tamoil, Texaco, and Sonangol.

Benin’s Technical and Denationalisation Commission, which oversees privatisation of state-owned enterprises, says bidders were obliged to meet a number of requirements, including references, a five-year development plan, a detailed wage plan, and a proposed timetable and conditions for carrying out the operation.

After the evaluation of the bidders’ offers by Beninois officials, CPI and the ELF-TOTAL, a French multinational corporation, were chosen as the front-runners on Dec 1.

SONACOP workers had feared that ELF-TOTAL would take over the company.

But a press statement, issued by the Council of Ministers, said the government rejected ELF-TOTAL’s bid for demanding a revision in price structure and insisting upon a minimum 15-percent profit after taxes.

CPI’s offer was accepted because it “was comprehensive and conformed to the rules of the invitation to tender”. In addition, CPI advocated a policy of a joint local venture, tapping the technical assistance of two international firms (in Switzerland and France), the press statement said.

The government said the TOTAL Group had, in March 1998, offered 4.4 billion CFA francs for 55 percent of the capital, during the first round of bidding, which was rejected.

The flambouyant Fagbohoun is not only a businessman but also a politician, close to President Mathieu Kerekou. He is the leader of the African Movement for Democracy and Progress (MADEP), which has six deputies in Parliament and a government minister.