“Benue State government is producing bread, Benue State is producing pure water, ah ah… Taraku Mills. It is a sham! It is 419!” – Chief Samuel Ortom
THE ABOVE quotation is an extract from a recent public comment by former Benue State Governor, Samuel Ortom, reflecting on the affairs of Benue Investment and Property Company Limited (BIPC). The remark brought public attention to the management, performance and accountability of the agency and calls for a compelling need for objective interrogation of the issues surrounding BIPC far beyond the shenanigans of politics.
At the heart of the matter lies a fundamental question: Is BIPC’s reported financial growth translating into sustainable economic value for the people of Benue State, and are the necessary governance structures in place to protect these investments? Or is it a sham or 419 going on?
While it is an acceptable accounting standard to recognize fair value gains, it becomes “creative accounting” to use it to dress up weak headline earnings. It is important to distinguish between accounting profit and cash-generating operating performance. The risk here is simple: if a substantial proportion of annual profit depends on movements in stock market prices, reported profitability may fluctuate considerably from one year to another. A strong capital market may produce impressive accounting gains, which may become impossible during any subsequent market downturns. The real profit is the one that would involve statutory cash transfer of profit portions directly into the state government revenue account and for which BIPC can show a receipt or invoice. This is not the case with paper profits.
These questions are particularly relevant to the administration of His Excellency, Rev. Fr. Hyacinth Iormen Alia, whose government has demonstrated considerable interest in repositioning BIPC as an instrument for industrialisation, economic diversification, employment creation and wealth generation.
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Let’s take a look!
The only available public record is the company’s 2024 audited financial statements, which reveals a combination of both remarkable achievements and significant financial and governance risks. The reported performance suggests that BIPC is experiencing an important period of expansion. However, the same financial statements raise legitimate questions about the sustainability of its earnings, the structure of its liabilities, the quality of its investments and the adequacy of its corporate governance arrangements. These will be simplified in the subsequent paragraphs.
There are encouraging financial transformations …o yes! Let’s talk about them.
The 2024 audited financial statements of BIPC present a striking picture of expansion. Profit after tax increased to ₦2.71 billion from ₦2.35 billion, gross earnings rose by 36% to ₦4.79 billion, total assets almost doubled to ₦31.1 billion, shareholders’ funds climbed to ₦18.6 billion, and cash balances surged from ₦86 million to ₦4.5 billion. On the surface, these figures portray a company experiencing unprecedented growth and transformation.
According to the figures presented, the company’s total assets increased from approximately ₦16.4 billion to ₦31.1 billion within a single financial year. This represents an increase of about ₦14.7 billion, equivalent to nearly 90% growth.
For a state-owned investment company, such an expansion is significant. It suggests that BIPC has increased the scale of its investment activities and strengthened its position as a potential driver of economic development in Benue State.
However, asset growth should always be interpreted carefully. An increase in reported assets may arise from new capital investments, asset acquisitions, valuation adjustments or other accounting developments. Consequently, the quality, liquidity and income-generating capacity of the assets are as important as their reported values.
Nevertheless, the scale of the expansion deserves an acknowledgement.
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Another encouraging development is the company’s reported profit after tax of approximately ₦2.71 billion. This indicates improved financial performance compared with the previous year and suggests that BIPC has experienced a positive shift in its financial position.
Profitability is particularly important for public investment companies because it provides a basis for reinvestment, potential dividend distributions and the long-term preservation of shareholders’ funds.
Equally impressive is the significant improvement in the company’s liquidity position. Cash and cash equivalents reportedly increased from approximately ₦86 million to ₦4.5 billion. A stronger cash position provides great flexibility to meet operational obligations, support ongoing projects and respond to emerging investment opportunities. It may also reduce dependence on short-term borrowing and improve the company’s resilience during periods of economic uncertainty.
Beyond these financial figures, are also BIPC’s expansion into industrial, agricultural, manufacturing and real estate investments namely: brewery, steel plant, bakery, water factory, fertilizer blending, land acquisitions, palm oil production and printing press.
Properly structured investments in these sectors could create employment opportunities, stimulate local production, reduce economic dependence on government allocations and strengthen internally generated revenue.
Also, the company’s relatively low level of external borrowing is another positive indicator. Borrowings stand at only ₦9.7 million against shareholders’ equity of ₦18.6 billion, producing a gearing ratio of approximately 0.1%. Such a capital structure provides substantial financial flexibility and insulates the company from many of the refinancing and interest-rate risks commonly faced by highly leveraged institutions.
For lenders and investors, this represents one of BIPC’s strongest credit attributes.
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But here lies an issue of first concern – a closer examination of revenue composition reveals that dividend income contributed ₦423 million, rental income generated ₦410 million, while property sales contributed ₦795 million. Although these income streams are encouraging, they remain substantially smaller than the fair value gains of ₦2.94 billion that is driving overall profitability.
Let us understand that fair value gains are unrealized market value appreciation of quoted shares. If this was subtracted from the reported profit before tax of ₦2.72 billion, the company would have reported an operating loss of ₦22 million. Perhaps the accusation of “419” was derived from this basic understanding.
While it is an acceptable accounting standard to recognize fair value gains, it becomes “creative accounting” to use it to dress up weak headline earnings. It is important to distinguish between accounting profit and cash-generating operating performance. The risk here is simple: if a substantial proportion of annual profit depends on movements in stock market prices, reported profitability may fluctuate considerably from one year to another. A strong capital market may produce impressive accounting gains, which may become impossible during any subsequent market downturns. The real profit is the one that would involve statutory cash transfer of profit portions directly into the state government revenue account and for which BIPC can show a receipt or invoice. This is not the case with paper profits.
So, was BIPC a profitable company at the end of 2024? You can as well answer this question at this stage.
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Another important issue of concern requiring careful examination is the approximately ₦11.49 billion disclosed in the financial statements as deposits for shares.
According to the figures under review, this balance constitutes most the company’s reported liabilities.
The existence of deposits for shares is not inherently unusual or evidence of financial impropriety. Such balances may arise where investors or shareholders provide funds in anticipation of future equity allotments, subject to agreed contractual arrangements.
However, the substantial size of this particular balance makes its legal, financial and governance implications especially important.
Several questions deserve clear answers.
Who contributed the funds? What contractual rights are attached to the deposits? Under what conditions will shares be allotted? Are the deposits refundable? What approvals govern the transactions, and what implications might future share allotments have for the ownership structure of the company?
These are not merely technical accounting questions. They are fundamental issues relating to shareholder rights, capital structure, financial obligations and the protection of public assets.
It is therefore advisable for the state government to commission an appropriate legal and financial review of the balance, supported by comprehensive disclosures of the relevant contractual arrangements.
Such a review would not necessarily imply wrongdoing. Rather, it would provide assurance that the transactions are properly documented, appropriately classified and consistent with the long-term interests of the company’s shareholders.
Transparency on this issue would also strengthen public confidence and help address legitimate questions arising from the company’s financial statements.
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The financial statements also indicate that BIPC’s investment projects increased from approximately ₦101 million to more than ₦7 billion within one financial year. This represents an “extraordinary expansion” in the scale of project-related investments.
This development suggests an ambitious attempt to move beyond passive investment holdings and gravitate towards direct participation in productive economic activities, which is beautiful.
For Benue State, investments in manufacturing, agro-processing, industrial infrastructure and commercial property could create important economic opportunities.
However, rapid capital expansion introduces significant implementation risks.
Large investment projects frequently encounter challenges involving procurement, construction costs, financing arrangements, technical capacity, regulatory compliance, operational readiness and market demand.
Where several major projects are undertaken simultaneously, management may face additional pressure in coordinating implementation and monitoring performance.
The danger is that substantial resources could become committed to projects that experience prolonged delays, exceed their approved budgets or fail to generate the expected returns.
Such outcomes could weaken liquidity and reduce the company’s ability to finance other productive opportunities.
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The government should therefore ensure that every major project is supported by rigorous feasibility studies, independent financial appraisal, realistic implementation schedules and clearly defined performance targets.
An independent strategic review of projects exceeding ₦500 million would be a useful starting point. Such a review should assess the commercial justification for each project, expected financial returns, total funding requirements, completion timelines and potential exposure to cost overruns. It should also distinguish projects that are commercially viable from those primarily intended to achieve broader social or developmental objectives.
Both categories may be legitimate for a state-owned enterprise, but they should be evaluated using transparent and appropriate performance criteria.
A commercially oriented project should demonstrate a credible pathway to financial sustainability, while a developmental project should have clearly defined public benefits and an explicit funding framework.
If BIPC can combine its present financial momentum with sound corporate governance, disciplined investment decisions, effective risk management and transparent public accountability, it has the potential to become one of Nigeria’s leading state-owned investment institutions.
Another bigger issue is the reported impairment of certain investments (understand impairments literally as write-offs). Investment impairments generally arise when the recoverable value of an asset falls below its carrying amount, subject to the relevant accounting requirements. Such impairments may reflect changes in market conditions, deterioration in business performance, weak investment assumptions or other adverse developments.
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Their existence does not automatically establish that previous investment decisions were improper. Nevertheless, substantial impairments provide an opportunity to evaluate whether the company’s historical investment appraisal and monitoring processes were sufficiently robust.
Therefore, the impairment figure of ₦472 million as reported, requires a careful forensic examination.
But beyond all the above, perhaps the most consequential institutional issue raised by the financial statements concerns the reported dissolution of BIPC’s Board of Directors and the arrangement under which management reported directly to the shareholder. Such an arrangement may have emerged from a restructuring or a reform process. However, the prolonged absence of an effective board can create significant governance vulnerabilities.
A board of directors plays a central role in supervising management, approving strategic direction, monitoring financial performance, evaluating major investments and ensuring accountability. Without an adequately constituted board, important decisions may become excessively concentrated within executive management or shareholder representatives. This can weaken institutional checks and balances, particularly in an organisation responsible for managing substantial public investments.
This issue is especially important for a company whose asset base has reportedly grown to ₦31.1 billion and whose investment activities are expanding rapidly. The larger and more complex the investment portfolio becomes, the greater the need for professional oversight.
Governor Hyacinth Alia should therefore consider the timely reconstitution of a highly competent and professionally independent board, consistent with the company’s legal and ownership arrangements and not just any Borad for the sake of it.
Board appointments should prioritise relevant expertise, integrity, independence of judgement and demonstrated professional competence. The board should include individuals with substantial experience in corporate finance, investment management, accounting, risk management, infrastructure development and corporate governance.
It should also establish effective audit, risk and investment oversight arrangements.
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A properly constituted board would strengthen executive accountability, improve investment scrutiny and provide institutional continuity beyond changes in political administration.
Ultimately, strong corporate governance is one of the most important conditions for business sustainability.
As BIPC continues to expand, its internal control systems must be developed at such corresponding pace. A larger asset base and a more diversified investment portfolio inevitably introduce additional financial, operational and compliance risks. The company therefore requires a very strong internal audit function capable of independently reviewing procurement, capital expenditure, investment management, financial reporting and compliance with established governance procedures. Ideally, the internal audit function should have direct functional access to a robust board audit committee in order to protect its independence from executive management.
In Conclusion, while the public objections associated with former Governor Samuel Ortom provide an opportunity for a broader conversation about the stewardship of public investments in Benue State; financial accountability should not be reduced to political jabs. The appropriate response to questions concerning BIPC should be the presentation of verifiable information, clear financial explanations and evidence of sound corporate governance as we await 2025 and 2026 audited reports. It is our hope that where concerns are legitimate, they should be addressed through appropriate disclosures, independent reviews and corrective action. Where allegations are unsupported, accurate information should still be provided to clarify the position. This approach would serve the interests of both the government and the public. It would also help protect BIPC from becoming an institution whose performance is assessed primarily through political affiliation rather than measurable commercial and developmental outcomes.
The Fr. Alia administration has an opportunity to demonstrate that public investment management can be governed by professionalism, transparency and institutional accountability.
If BIPC can combine its present financial momentum with sound corporate governance, disciplined investment decisions, effective risk management and transparent public accountability, it has the potential to become one of Nigeria’s leading state-owned investment institutions.
Ultimately, the objective should be to build a company that is not merely financially larger, but institutionally stronger, commercially more resilient and economically more valuable to present and future generations of Benue citizens.
That is the standard against which BIPC’s transformation should be judged, and it is the opportunity that now lies before the Benue State Government.
Caveat:
This observation represents an independent analytical opinion based on the financial figures and disclosures described in BIPC’s 2024 audited financial statements. It is intended to encourage constructive policy engagement, corporate governance reform and public financial accountability only.
Ogah is a Finance & Investment Consultant, and a public affairs commentator.
