NIGERIA PLC

The issue of privatising and deregulation of public enterprises has been in the front burner for decades now. I remember the IBB days when we had the TCPC (Technical Committee on Privatisation and Commercialisation). Over time we have changed names, changed responsibilities, and now the organisation we know to be saddled with the responsibility of privatisation is the BPE (Bureau for Public Enterprises).

Privatisation cum deregulation has however been a very bumpy road. The moment deregulation policies are made; the polity seems to heat up. Unions begin to shout and threaten strike and all manner of things. Politicians, economists begin to say this and that, either for or against (usually against) and in most cases, the Government, not having enough will and probably never clear enough about the direction it wanted to go in the first place, backs down and things go on as usual. But to whose benefit?

Government has not been able to run any enterprise successfully over the last 20/30 odd years. The list of failed government enterprises is amazingly long. PHCN, Nitel, Nigeria Airways, Nigeria Railways, DFRRI, Ajaokuta steel complex, Nigerian National Shipping Line, Alscon (before it was privatised), NAFCON, National Theatre, Refineries, Eleme Petrochemical (before privatisation), Hotels, Banks, Newspapers and many more I can’t even remember! What makes us think they can do any better anytime soon? The longer these enterprises fail, especially the ones with no substitutes, the more the costs to the Nigerian economy and by extension, its people.

Yet, the many unions who go on strike to prevent the privatisation of all these enterprises don’t seem to think so. Usually they claim that once funding is in place, they can run the organisations, but I far as I am concerned that is a farce!! The unions of PHCN, Nitel etc, do not want these organisations privatised in order to hold on to their jobs (which they barely do) at the expense of the country. They know all too well that they cannot work in a privately owned company. They have spent too long working in a civil service way. The perfect comparison is Nitel vs the GSM companies. The GSM companies have brought in billions of dollars in investment, paid billions of Naira in taxes, created thousands of direct jobs and tens of thousand of indirect ones (from hawkers of recharge cards, distributors of recharge cards, builders of masts, steel fabricators, IT consultants, advertising agencies etc). On the other hand, how many times has Nitel advertised for staff in recent memory? Or when did it last contribute to Government income? The same questions can be asked of our refineries? Who has ever heard of any of our refineries putting out adverts for employment? Yet these are the places where our Petroleum Engineers, Mechanical Engineers and the like should be dreaming of working.

There is no doubt that many of the staff at these companies may loose their jobs if privatised. But the truth of the matter is that many of them are only currently employed due to the inefficiencies of the system. What 5 staff in the current PHCN do, 1 person in a privatised PHCN could probably do with a laptop- more efficiently for that matter!! The sooner the old, ancient and incompetent staffs of these companies give way to young, vibrant and competent people, the better for the Nigerian economy. It is also true that in the short term, the prices of the goods and services provided by these failed government enterprises may increase if privatised, as investments are made to bring existing facilities up to scratch, but I put forward that in the long term the prices will come down. After all we started GSM at N50 per minute in 2001, but now, depending on the service you are running, you may be charged as low as N16 per minute and that does not take depreciation of the Naira and inflation into consideration. In real terms it is even cheaper. What is the point of paying N6/Kwh of electricity that will never come and spend thousands of Naira running generators? Wouldn’t it be better to pay N11/kwh for stable electricity from a private company and have peace of mind to stock your freezer and conduct your business?

The truth is that the private sector will always be better at capital formation and allocation. The sooner we get the government to stop attempting to run businesses, and to convert Nigeria Ltd to Nigeria Plc, the better!!