TWELVE years of efforts to privatise Nigerias public enterprises have yielded little dividend. Rather, this period has been mired in controversy. According to the Senate ad hoc Committee on Privatisation, the process has been severely flawed and its outcome unsatisfactory. Vice-President Namadi Sambo corroborated the committees findings at the inauguration of a new Board for the National Council on Privatisation on November 24, disclosing that only one of 122 public enterprises privatised so far was operating at optimum capacity. At stake in the Federal Governments privatisation programme are scores of enterprises that had gulped estimated $100 billion in investments, as of May, 1999 as indicated by the NCP in its "Privatisation Policy" document. The governments intention in ceding the enterprises to the private sector has been to "lessen the dominance of unproductive investments in the [public] sector" and "provide a channel for reintegrating Nigeria back into the global economy as a platform to attract foreign direct investments in an open, fair and transparent manner." The enabling law envisages that "core investors will be selected in an open, international competitive bidding process followed by negotiations with not more than three best bidders." But the process has suffered many hiccups, due mainly to corruption. In place of the foreign direct investments anticipated by the Federal Government, some of the most strategic assets affected in the privatisation exercise have witnessed massive asset-stripping by nondescript foreign companies and their local collaborators, appointed as "core investors" by successive managements of the Bureau of Public Enterprises, the agency charged with its implementation. The $4.5 billion Ajaokuta Steel Complex was massively cannibalised in turns by Solgas, an American energy company and Global Infrastructure Holdings Limited. Nigeria Telecommunications Plc, with its Global System for Mobile Communications subsidiary, Mtel, was similarly despoiled and devalued by Pentascope, which had been appointed as management contractors. In the case of NITEL/Mtel, Pentascope not only squandered amounts in its bank accounts, estimated at over N50 billion, it incurred debts to the tune of tens of billions of naira for the enterprise. The once-famous Daily Times Nigeria Plc also suffered a similar fate at the hands of pseudo-entrepreneurs of Nigerian origin. And to underscore the gravity of irregularities and economic losses suffered by the nation in the privatisation exercise, the Senate committee has recommended the revocation of the sale of the $2.5 billion Aluminium Smelter Company of Nigeria, the Delta Steel Company, Transcorp Hilton Hotel, Abuja, Abuja International Hotels Limited (NICON Luxury Hotel), Sunti Sugar Company and Bacita Sugar Company, among others. It also directed that the anti-graft agencies recover 70 million belonging to African Petroleum Plc allegedly looted by a former Head of Finance of the company. Undoubtedly, what the Senate committee has unearthed in the unspeakably scandalous implementation of the privatisation exercise, especially between 1999 and 2007, is only the tip of the iceberg. A lot else remains unreported and that should compel a separate investigation by an independent body. The nation should know how much was generated from the sale of Federal Governments equity holding in the privatised firms and where the proceeds are. Yet, the committee report, appreciable as it is, is unsatisfactory. It overlooked the Federal Governments apparent abandonment of the privatisation programme as it relates to the Nigerian National Petroleum Corporation (and its subsidiaries), Nigeria Railways Corporation and the uncertainties over NITEL Plc. NNPCs four refineries, Pipelines Product and Marketing Company Limited and Nigerian Petroleum Development Company were slated under Phase Three of the exercise under the Public Enterprises (Privatisation and Commercialisation) Act, 1999, which should have been concluded by 2007. Curiously, NNPC has proceeded to establish mega stations and is busy exploring for oil in the Chad Basin, when the NPDC should have been privatised by now.Public enterprises have become a conduit for massive looting by public officials and a break on economic growth. Between 1973 and 1995, the Federal Government spent over $100 billion to establish public enterprises. But their returns, at the best of times, were a paltry 0.5 per cent per annum, according to a former BPE head, Nasir el-Rufai. During the period, it was estimated that enterprises were costing the government about N265 billion annually to run. Largely moribund, NITELs debt was put at N300 billion as at July 2011. It was estimated that the Federal Government spent over $826.6 million without results on railway contracts between 1999 and 2007. As at 2004, about $300 million had been spent on Turn Around Maintenance of the nations four refineries without any result. At a time, one NNPC Group Managing Director allegedly ran up a bill of approximately N240 million at a luxurious hotel in Abuja. The story is unremittingly bleak.But progress is possible. With the new technical committee of the NCP board, under the leadership of investment banker, Atedo Peterside, it is expected that the BPE would be overhauled and repositioned for efficient implementation of the privatisation programme. The objectives of the programme are essential for the economic re-engineering of Nigeria and to remedy debilitating foundational flaws.
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