LABOUR-NIGERIA: Loss-Making Firms Targeted for Privatisation

By Toye Olori Reprint | | Print |

Toye Olori

LAGOS, Sep 5 2002 (IPS) - The government of Nigeria has embarked on a major privatisation drive, targeting loss-making corporations, to cut costs.

The programme, which has been moving slowly, began under former president Ibrahim Babangida, with the sale of the African Petroleum in 1991.

Immediately, after Nigeria’s general elections in 1999, President Olusegun Obasanjo inaugurated the National Council on Privatisation to remove financial ‘’burden” on the taxpayers.

“While successive Nigerian governments had invested up to 80 billion U.S. dollars in public-owned enterprises annually, returns on them had been well below 10 percent. The declining revenue and escalating demand for effective and affordable social services prompted members of the public to step up yearnings for state-owned enterprises to become more efficient,” Obasanjo said.

The exercise would be carried out in three phases, beginning with commercial banks and cement companies in which government had already sold off its shares. Phase two would affect hotels and vehicle assembly plants, while the third phase would include the sales of electricity, telecommunications, Nigeria Airways and the petroleum sector, including refineries.

While the privatisation of the banks, electricity and telecommunications have gone smoothly, despite protests from workers, whose fears were on job losses, the planned privatisation of profit-making Ports Authority, the petroleum sector, the Nigerian Security Printing and Minting Company have continued to generate controversy.

Workers and legislators fear the firms would be sold to ‘’well connected persons”, and have vowed to resist their privatisation.

The House of Representatives has accused the Bureau of Public Enterprises (BPE), which is in-charge of the privatisation of the public utilities, of working with ‘’some well connected groups” to sell the Nigerian Minting Company.

In a recent letter to foreign embassies in Abuja, the administrative capital of Nigeria, the House Committee on Commercialisation and Privatisation warned Nigerians or foreign investors purporting to purchase the Minting Company were doing so at their own risk. “Buyers should, therefore, beware,” the letter warned.

But Nasiru el-Rufai, BPE Director-General, says the opposition to the privatisation of the Minting Company was for ‘’personal gains”.

Last month, maritime workers shut down Lagos’s ports to protest the proposed privatisation of the Nigerian Ports Authority (NPA).

Irabor Onikolease, chairperson of the Maritime Workers Union of Nigeria, said the workers were concerned about their ‘’job security and security implications”.

“Placing port operations in the private hands would mean that the nation is doomed,” Onikolease claimed, pointing out that smuggled weapons and munitions — which the government has been impounding — would be hard to combat.

“Should ports go into the private hands, it means ammunition would be freely brought into the country, a development that will undermine the security of this nation. Even when government oversees the operation, we have seen the level to which the importers could go with the importation of expired commodities which is harmful to the health of the consumers. We have seen how fake Naira notes (Nigerian bank notes) were shipped into this country,” he said.

Onikolease said 7,000 jobs would also be scrapped in privatised ports. He warned that the union would not stand-by, while its members were being made jobless.

Justifying the privatisation, El-Rufai argued that it takes 33 days to clear a container in a Nigerian port, while it takes just five days to clear similar container in neighbouring Cotonou, Benin Republic.

“The delay is occasioned by the inefficiencies in the ports’ administration à Privatisation will remove the bureaucracy associated with port administration and make the gateway to the nation’s wealth user-friendly,” he said.

Oil workers also have threatened to go on strike this month (September) if government goes ahead with its plan to privatise Nigeria’s petroleum firms.

Isaac Ololeye, a businessperson in Lagos, says “I do not know what the government intends to gain from privatising such public utilities. The exercise will bring on Nigerians more hardship than before because if these companies are handed over to private individuals, the new owners will fix prices which will be out of reach of ordinary Nigerians”.

“In the 1970s and 1980s, these corporations were making big money but because of too much interference from government, especially in the appointment of people to offices they are not made for, the fortunes of these companies began to dwindle leading to their so-called inefficiency and collapse. If government can stop interfering in the day-to-day running and allow those who know what to do to do their jobs, these firms can make it,” Ololeye argued.

“Nigerian governments, especially (past) military regimes, just put anybody in positions whether they know what to do or not, as far as they are their boys, they put them there to run an organisation as Managing Directors. Imagine a lawyer being appointed as General Manager of a sea port or airways, what do you expect?” he asked.