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Privatization Under Scrutiny in Nigeria - 2002-04-12

In Nigeria, the names of big public corporations -- like NEPA, NITEL, NPA, NNPC, and NIPOST – are household words. They are also by-words for inefficiency and corruption. They are accused of failing to deliver basic services to the public despite many years of steady government investment. Analysts say that is why president Olusegun Obasanjo has agreed to sell them off in Africa’s biggest privatization exercise.

Public relations consultant Emeka Maduegbuna says the goal behind the sales is to make the businesses more efficient and to help reduce the pressure brought by the enterprises on the treasury for funding. As sound as this logic may seem, there are many who will not hear of it. Workers in some affected companies are spoiling for a fight if the government proceeds with the planned sales. Some workers’ unions have even gone to court to stop them.

Pire Maidambe -- the chairman of the three-thousand member Senior Workers of Nigeria Ports Authority – says the first victim of any reform – including privatization – is a loss of jobs.

Another factor that’s alienated many workers seems to be the government’s uncompromising execution of the program. Workers say there has not been enough time to debate the effects of the sales on them – including how many will be laid off or need to be re-trained.

Owe Ilakemfa is the spokesman of the umbrella workers body, the Nigeria Labour Congress. Acording to him, “the government turned privatization into a religion rather than economic logic. It then believes everything must be privatized. The only thing they don’t want to privatize is the air we breathe. Therefore, the opposition of workers to privatization is a logical thing.”

Strong anti-privatization sentiments are not limited to workers. Students, politicians, and human rights activists have criticized the government agency handling the privatization effort – called the bureau of public enterprises, or BPE. However, the agency’s consultant Mr. Emeka Maduegbuna says the opposition’s motives are not entirely altruistic:“ a lot of the hue and cry over privatization is because we’re going to those areas where there is patronage and corruption. We’re stepping on the toes of vested interests – people who benefit from the status quo are those shouting largely.”

But Akintunde Asalu, a well-known shareholder in many Nigerian companies, does not entirely agree. He says the privatization agency has so far done a poor job – and that the effort has it’s far from fair. Mr. Asalu’s complaint is mainly against the way shares in some privatized firms have been allotted: In order not to be accused of favoring a section of the country, the BPE ensures that the shares are distributed equally among the country’s geo-political zones.

Critics say it shows political consideration is coming into play in what should be a purely business transaction. They say shares should not be treated as political largesse to be doled out equally among the states. Also, Mr. Asalu accuses some officials of interfering in the conduct of the sales. He says this has greatly damaged the privatization campaign’s credibility. He says “Many of the shares sold have been organized. There have been anointed, appointed buyers, fronting for some in government. The privatization programe under this government has been an enormous disaster.”

To buttress Mr. Asalu’s point, observers say some sections of the country –particularly the southeast - - are shunning the exercise. But privatization sympathizers like Mr. Maduegbuna say although the agency may not be perfect, it has handled the exercise creditably: “ On the whole, it has been an open process. When it comes to public offers, it is for everybody to participate in.”

In the meantime, both sides of the privatization debate are not yielding any ground. And in spite of the failed attempt recently to sell the phone company -- NITEL - President Obasanjo him self remains unrepentant. His aides say he is proceeding --- convinced that government has no business in running any business.