Giving Privatisation a Bad Name!!!

When you want to hang a dog, first give it a bad name! Evidently some powerful constituencies in Nigeria viscerally dislike privatisation and the notion of private-sector led development. They prefer the prebendal, statist, semi-feudal development (actually underdevelopment!) model in which banks, refineries, telecommunications companies, electricity generation and distribution utilities, hotels, airlines, newspapers, television and radio stations etc are controlled by Abuja and bureaucrats, politicians, traditional rulers, government contractors and sundry patrons and wards of the state control all economic resources and determine who gets rich or stays poor! This coalition and their agents hate privatisation as it takes away their control over the destinies of our nation and its peoples.

But they can’t say this, can they? So instead they focus on persuading us it has failed! That privatisation is over-rated and state-owned enterprises are better after all. It doesn’t bother them that massive corruption is endemic in state-owned enterprises, but they carefully scrutinize privatisations for opportunities to call the kettle black! And they succeed in persuading some naïve or hypocritical “comrades” (who own private professional practices; carry three mobile phones; work for private banks and telecommunication companies; and appear regularly on private broadcast stations!!!) to their cause!!! The current leader of this “Anti-Privatisation Coalition” is Vice-President Namadi Sambo, who ironically as Chair of the National Council on Privatisation (NCP) presides over privatisation. In Sambo’s view, “80percent of privatised firms moribund” (Thisday May 13, 2011) and “the process of privatisation has been going on for about ten years but has not been successful due to obvious non-performance” (Peoples Daily May 12, 2011). Meeting with the Russian Ambassador, Sambo re-stated that “many of the privatised companies have not met been able to meet the aspirations of government” (Punch June 28, 2011).

Unfortunately Sambo may have persuaded President Jonathan! The Nation newspaper’s screaming headline proclaimed “Privatisation has failed, says Jonathan”!! This at the inauguration of NCP!!! Jonathan’s late boss, Umaru Yar’adua reversed the privatisation of Refineries which were concluded just before ex-President Obasanjo handed over to him. Yar’adua also refused to proceed with the expected privatisation of unbundled Power Holding Company of Nigeria (PHCN) entities; and later formally outlined a policy championed by Rilwanu Lukman which rested the private sector electricity model in favour of state control. Should we then expect that Jonathan will abandon the Power Sector Roadmap and Electric Power Sector Reform Act 2005 both of which are based on privatisation of electricity generation and distribution, while transmission is billed to be concessioned to the private sector? Is the power road map dead on arrival, since we can logically expect Namadi Sambo to frustrate expected privatisations?

Interestingly a replay of Yar’adua’s strategy of stalling Obasanjo’s power reforms, (as Engineer Foluseke Somolu recently pointed out), through public disinformation that $16billion had been wasted on power; and Ndudi Elumelu’s House of Representatives Power Committee probe appears ongoing! The Senate has commenced its legislative agenda with an adhoc committee investigating privatisation!!! Senate President David Mark while inaugurating the panel declared that privatisation has not achieved the desired objectives and actually blamed privatisation for loss of jobs, financial deprivation and loss of revenue to the federal government!!! If the Senate had already reached these conclusions, why did it bother setting up an investigation? I urge Nigerians to be calm and circumspect in responding to the “alarming revelations” emerging from the Senate probe!!!

By all means, any clear infractions must be dealt with based on law and due process. Indeed this columnist has long identified conditions which make for successful privatisations-an independent technical agency overseeing the process; proper valuations of assets being disposed of; open, competitive and transparent bidding by all participants; a process that first establishes technical qualification of bidding firms before proceeding to competitive financial bidding; and the absence of corruption and political interference, except in cases of national security and overriding national interest. The industry structure must ensure existence of a competent regulator; and privatisation must not result in private monopolies. Where specific transactions breached these principles, that is not a failure of privatisation but the corruption and political irresponsibility that afflicts our nation!

But the bigger picture is that the private sector has been vastly more successful than government in Nigeria. Can anyone compare Oando and Conoil to Unipetrol and Nolchem? Would First Bank and UBA have survived (remember Continental Merchant, Allied Bank, IMB, NMB etc) government ownership? Can you compare Federal Palace Hotel, Golden Tulip Festac, Ikoyi Southern Sun, Notore and Eleme Petrochemicals to their rotten pre-privatisation predecessors? Does anyone miss the scandal-plagued, massively corrupt, pre-privatisation African Petroleum or NAFCON? Aren’t Nigerians aware that military rulers and bureaucrats used Aluminium Smelter Company and Ajaokuta Steel to enrich themselves? Can’t we see what difference private capital and management has made in telecommunications, financial services, aviation, newspapers, radio and television broadcasting, private universities, hotels etc? Do we miss the days when Nigerian Airways, Daily Times, New Nigerian, NTA, Radio Nigeria and inefficient and politicised government-owned banks were our only alternatives?

Does anyone want a return to the days when state-owned parastatals consumed billions of Naira every year without returning a kobo to the treasury? I don’t!!!