NIGERIA MASTERWEB DAILY NEWS

By Oyeols Akin The issue of privatising and deregulation of public enterprises has been in the front burner for quite some time now. My first memories of privatisation were in the era of former Head of State, Ibrahim Babangida with the now defunct TCPC (Technical Committee on Privatisation and Commercialisation) as its arrowhead. 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 in Nigeria has however been a very bumpy and uneven road. For many diverse reasons, we have not done too well with out privatisation experiment. The moment the government announces that a company or industry is to be privatised or liberalised, the polity seems to heat up. Unions begin to make themselves heard and in most cases, what we tend to hear first are threats of strike and all manner of related actions. Politicians, economists and many social commentators 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? Our Government has not been able to run any enterprise successfully for as long as I can remember. The list of failed government enterprises is amazingly long. PHCN, Nitel, Nigeria Airways, Nigeria Railways, 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 the government 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, the organisations will work, but I far as I am concerned, that is a farce!! My opinion is that the unions of PHCN, Nitel etc, do not want these organisations privatised in order to maintain the status quo. They know all too well that they cannot compete in the private sector. The truth of the matter is that they have spent too long working in a civil service way, and by this I mean incompetently, lacking creativity and with low levels of efficiency. The unions usually claim they are striking to protect Nigerian worker, but in actual fact they are fighting tooth and nail to keep their jobs at the expense of a more efficient Nigeria. Although their actions usually tend to benefit the workers in the short term, in the long term both the Nigerian worker and the Nigerian nation lose out as the whole country looses efficiency and productivity. Perhaps, if we had privatised our power industry early in the 80’s, Nigerian industries wouldn’t have closed in droves the way they have in the last 10 years. I wouldn’t be surprised if the idea was brought up then, but it was most likely killed via the unions. Short-term benefit, maybe, but who is paying the price now? Lets take a look at a public enterprise (Nitel) and a private one (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? When did they last engage in massive investment for expansion purposes, capable of providing jobs and adding value to the economy? Or when did it last contribute to Government income by way of dividend or payment of taxes? Rather, it constitutes a drain on the Nations resources, as salaries are paid for little or no value of work done. 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. On the other hand, we regularly see Shell, Oando, Mobil, NLNG et al advertise for vacancies in the newspapers. There is no doubt that many of the staff at our public 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!! After all, I’ve had a PHCN official come to severe my power connection, unaware that I had paid my bill about 10 days earlier at the exact same office he was operating from!! How inefficient and incompetent is that!? The sooner the old, ancient and incompetent staffs of these companies give way to a younger, more vibrant and competent generation, 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 contract you are running, you may be charged as low as N12 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 then spend thousands of Naira purchasing fuel to run 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? No matter what the unions think and say, 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 for us all, especially in the long run! www.wayforwardnaija.blogspot.com