The scramble for Nigeria
Abdulrazaq Magaji
2012-07-20, Issue <
http://www.pambazuka.org/en/issue/594> 594
<
http://www.pambazuka.org/en/category/features/83746>
http://pambazuka.org/en/category/features/83746
The disastrous privatisation programme in Nigeria is the epitome of greed,
avarice and corruption, benefitting a tiny elite at the expense of everyone
else.
A mad scramble for Nigeria has been underway since 1999. The name of the
game is called privatisation. It was a programme put in place to dispose of
some 1,000 state-owned enterprises and institutional buildings to a few
highly placed Nigerians and their foreign collaborators. The exercise has
never been transparent; it was not intended to be anyway. So far, it has
been characterised, in typical Nigerian fashion, by greed and avarice. While
privatisation may not be entirely dismissed, the manner in which it has so
far been implemented in Nigeria leaves a sour taste in the mouth.
For decades, Nigerians have been contending with many non-performing state
run enterprises and past efforts to stem the tide failed to turn things
around. But while Nigerians knew this and more, and welcomed any moves at
repositioning these money guzzlers, they hardly knew former president,
Olusegun Obasanjo, had unpatriotic plans when he labelled all state run
enterprises as corrupt and promised to breathe fresh life into them.
Thereafter, the government proceeded on a frenzied and incoherent
privatisation exercise that has continued to be the source of embarrassment
and shame to Nigerians. Rather than handing over the enterprises to
efficient private investors with the requisite technical knowhow and
experience, the government proceeded on an exercise that was largely
shrouded in secrecy and bereft of even the semblance of transparency. Most
of the enterprises, including institutional buildings, were cornered by
shady investors and their collaborators in high places in government. Even
some of its most vociferous proponents believe so many things have gone
wrong with the privatisation exercise. In an unusual admission of failure,
the Bureau of Public Enterprise (BPE) the body charged with overseeing the
privatisation exercise, recently revealed that a miserly 10 percent of the
400 hundred privatised firms in Nigeria are properly functioning. Even at
that, many sneering Nigerians and experts hotly dispute this figure.
One of the early signs that Obasanjo presided over a monumental fraud in the
name of privatisation broke two months after he eased himself out of office
following a failed bid to elongate his tenure. While on hand to receive a
delegation from the United States Department of Energy on 17 July 2007, then
director-general of the BPE, Irene Chigbue, was still maintaining that the
handing over of Port Harcourt Refinery Company and Kaduna Refining and
Petrochemical Company to Blue Star Oil Services Limited was a transparent
exercise which, in her words, resulted from 'a complex five-year transaction
process conducted subject to international best practice and following the
adoption of a multiple-bidder competitive tender process'. Nigerians knew
Mrs. Chigbue was being economical with the truth as the privatisation of the
refineries, like other hastily conducted ones in the twilight of the
Obasanjo administration, was not transparent and apparently carried out to
reward friends and loyalists of then outgoing President Obasanjo.
The flawed transaction surrounding the refineries is just one of many
examples of the haphazard implementation of the privatisation policy. As if
to confirm the fear of Nigerians, the privatisation exercise, right from the
beginning, has been bogged down by greed, avarice and absence of
transparency. These are evident in the sale of institutional buildings such
as the Apo Legislative Quarters under the guise of the monetisation
programme, the 'concessioning' of the National Theatre, Tafawa Balewa
Square, Lagos International Trade Fair Complex and the stalled sale of
Nigerian Telecommunications Limited (NITEL), National Electric Power
Authority (NEPA), as well as reforms in the ports, and power and oil
sectors. For similar reasons, the sale of national steel companies located
at Ajaokuta and Aladja, Daily Times of Nigeria, African Petroleum, ALSCON,
NAFCON, Eleme Petrochemicals and their attendant labour disputes, the
controversial auction sale of African Petroleum and Stallion House, the sale
of Federal Government properties in Lagos and Abuja, among others, have
stalled with millions going down the drain.
Taken on its own, the sloppy handling of the sale of Ajaokuta Steel Company,
built at a cost of $1.5 billion, is a classic example of how fraud was
perpetrated in the name of privatisation. SOLGAS, the company Ajaokuta Steel
Company was handed to, clearly lacked the managerial skills and technical
knowhow for the big job it was saddled with. After months of squabbles with
the local branch of the iron and steel workers union, Nigerians woke up one
day to discover that vital components of the company had been dismantled and
shipped out of the country. All an embarrassed federal government did was to
query SOLGAS. The outcome of the inquiry was a termination of the agreement
by the federal government after which an Indian conglomerate was drafted in
by the Obasanjo administration after the Indians paid $30 million. Today,
the original dream of Ajaokuta to power the nation's industrial take-off
remains a dream.
NITEL might not have been a shining example of state run enterprise but the
organisation, despite its structural weakness, was paying dividends in
billions of naira to the Nigerian government. Rather than reposition this
goose that laid the golden eggs, Obasanjo, upon assuming office in 1999,
dubbed NITEL as a corrupt organisation that needed to be privatised. NITEL
was handed over to IILL Limited, a company that did not have the technical
knowhow to handle the project. Worse still, IILL Limited lacked the
financial muscle to finance the purchase. Eventually IILL Limited could not
pay, a situation that paved the way for Pentascope, a backwater Dutch
company brought in by Mallam Nasir El-Rufai. It did not take much effort to
discover Pentascope was a mere front. NITEL reportedly suffered a N100
billion deficit after the Pentascope debacle. After stumbling from one
crisis to the other, the company was forced off the stage but not before it
turned NITEL's account into red and cleared what was left of the company's
offshore foreign currency savings. Any dream of NITEL escaping insolvency
perished when TRANSCORP, a so called home grown company, was brought in as
NITEL's undertaker. 13 years on, the mad scramble for NITEL's jugular is
still ongoing, as her assets, spread across the country, have been shared
and cornered by a privileged few.
A similar fate befell Daily Times of Nigeria (DTN). Until the early 1980's,
DTN was the largest Nigerian newspaper corporation with landed properties
worth billions of naira. It was sold to Folio Communications as scrap. The
matter was finally resolved by a Federal High Court of Nigeria ruling in
January 2010 voiding the sale of 140 million shares of DTN to Folio
Communications by the BPE. According to the court, Folio Communications
acquired the Daily Times without paying a dime but curiously used the
company's shares and assets network to secure a bank loan to the tune of
N750 million from Afribank. Folio Communications did not even bother to
repay the loan before it stripped and sold off several DTN properties and
assets. Another major scam concerns the fate of Apo Legislative Quarters,
Abuja. In the frenzy to sell off the buildings, lawmakers who arrived in
Abuja believing they would be allocated the flats were momentarily stranded
because the housing units originally built for the MPs had been sold to
their predecessors. Though more than N25 billion was realised from the sale
of the Legislative Quarters, the nation has been groaning under the burden
of an annual budget of N3 billion for accommodation allowances, thereby
placing a big question mark on the long term benefit of disposing of the
Legislative Quarters.
The sale of institutional buildings, including eye-popping presidential
guest houses, which ended up in the hands of serving public officials
heightened fears among Nigerians that there was more to the privatisation
process than they were made to understand. It further confirmed the fear of
Nigerians that the exercise was taken advantage of primarily by residents
within the corridors of power and their loyalists. Some instances will
suffice: Mallam Nasir el-Rufai, former Minister of the Federal Capital
Territory, bought the presidential guest house at No. 16 (now No. 12)
Mambilla Street, off Aso Drive, Maitama, Abuja; Dr. Andy Uba, former Special
Assistant to the President on Domestic Matters, dethroned as governor of
Anambra state by a Supreme Court judgement which reinstated Peter Obi,
bought the property at No. 19 Ibrahim Taiwo Street, Aso Rock, Abuja; Mrs.
Remi Oyo, Senior Special Assistant to the former President on Media bought
the property on Yakubu Gowon Crescent, inside the Presidential Villa; while
Dr. Mohammed Hassan Lawal, former Minister of Labour and Productivity bought
the property on Suleiman Barau Street, Asokoro, Abuja. Mr. Akin Osuntokun,
former Managing Director of the News Agency of Nigeria (NAN) and, later
Honorary Political Adviser to the former president, bought the presidential
guest house at No. 2 Mousa Traore Crescent, Abuja; while the official
residence of the Inspector General of Police (IGP) was cornered by then IGP,
Mr. Sunday Ehindero.
The criminal desperation to sell off Nigeria soon became a source of
embarrassment to some of the main beneficiaries of the exercise. For
instance, in March, 2007, Obasanjo's deputy, Alhaji Atiku Abubakar said:
The well-conceived and well-intentioned privatization programme, which was
designed to transparently transfer state-owned assets to private hands to
ensure better service delivery, has gradually been personalized and our
prized economic assets and choice enterprises have been cornered and
auctioned off to a tiny cabal of private sector interests closely
associated, or in full partnership with those in the corridors of power,
with little or no pretence at due process or transparency. (They) used the
privatization programme to auction our crowned jewels to themselves at
rock-bottom prices.
He should know because as vice president, Alhaji Atiku Abubakar chaired the
National Council on Privatisation between 1999 till he fell out with
Obasanjo in 2005. Four months later, specifically in July 2007, Senator
Ahmadu Ali, former chairman of the ruling People's Democratic Party added
his voice to what had become a national uproar: 'This is an age when they
sell off everything including the family silver. I don't encourage all these
things. I don't see why Federal Government Colleges should be sold. I don't
see why certain things that are of national security should be sold'.
The private sector was at its infancy when Nigeria inherited its colonial
capitalist economy at independence. With the first coming of the military in
1966, Nigeria, in line with the policy of non-alignment, adopted a hybrid of
state capitalism and socialism with significant private participation. In
1973, the military government introduced and rolled out an Indigenization
Decree which nationalised operations run by multinational corporations and
brought them under state control. The result was the proliferation of more
1,000 state run enterprises funded by Nigeria's new found oil wealth.
However, the crash of international oil prices in the early 1980's,
dwindling annual profits of state run enterprises and operational problems
of nepotism, excessive bureaucracy, gross incompetence in management, lack
of effective control and supervision by the Government among others made
increased private participation in the national economy imperative. The
response of the military administration of President Ibrahim Babangida to
these challenges was the establishment of the Technical Committee on
Privatization and Commercialization (TCPC) headed by the late Hamza
Rafindadi Zayyad.
Under Rafindadi, the TCPC was widely hailed for laying down enduring
structures to ensure effective privatisation of state run enterprises. Its
assignments and targets were the disposal of Government equities in the
Nigerian capital market, the privatisation of commercial and merchant banks,
cement companies etc. To build on these economic landmarks, the Bureau for
Public Enterprises (BPE) was established in 1999 as a successor to the TCPC.
The National Council on Privatisation (NCP) was also established as the
supervising body to BPE. These two regulatory agencies on Nigeria's
privatisation were established through the promulgation of the Public
Enterprises Privatisation and Commercialisation Act 1999. But as Nigerians
have come to realise, the Obasanjo idea, typical of Nigerian standard
practice, altered the original programme of privatisation.
As usual, nobody will be sanctioned for the fraud and, in typical Nigerian
style, buck-passing and shadow-chasing have been the game. Do Nigerians have
to wait for a 'corrective regime' to clear the mess? Should there be a
problem in dealing with whoever derailed a programme that was widely hailed
at inception? Our fingers are crossed!
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Received on Fri Jul 20 2012 - 19:21:40 EDT
