By Christiana Ekpa & Ikechukwu Okaforadi
Senate yesterday resolved to examine a comprehensive report of current privatization status of the federal government’s public enterprises with a view to ensuring their functionality to reduce the impact of current economic challenges in the country.
To achieve this, the upper legislative chamber directed its Committee on Privatisation to interface with the National Council on Privatisation, NCP and the Bureau of Public Enterprises, BPE in conducting a public hearing to determine the public enterprises privatized/commercialized, current status of privatized enterprises, extent of due process in the conduct of the exercise, enterprises whose privatization where reversed by the federal government.
It also mandated the committee to scrutinize the extent of compliance with the post privatization conditions by core investors, and the impact of privatization/commercialization of public enterprises on the nation’s economy.
These were sequel to a motion, on “The need to review the privatization of public enterprises in Nigeria” sponsored by Senator Umaru Kurfi (APC Katsina Central) and co-sponsored by six others.
Kurfi, while leading debate on the motion, noted that “privatization of public enterprises is a bye product of global economic recession in the 80s where Nigeria and other African countries where advised by the BrettonWoods Institutions (International Monetary Fund, IMF) and the World Bank, WB to divest from their public enterprises as one of the conditions for economic assistance”.
He further noted that privatization was institutionalized as a viable economic reform policy that would help cut the inefficiencies of the public sector, provide greater scope to the private sector, attract more investments, and also revive the failing economy.
The lawmaker expressed concerned that “while the objectives of privatization are noble, the exercise is not accompanied or preceded by an articulated and properly phased public sector reform in addition to several other challenges which makes the programme unable to facilitate efficient production of public goods or make any significant impact to fiscal balance”.
Kurfi also observed that “since privatization of public enterprises is marred by varied administrative, regulatory and financial irregularities, some experts are of the view that policy makers should consider non-traditional privatization methods such as deregulation, leasing, management contracting and franchising of monopoly rights at least in the short run than relying heavily on full divestiture as the primary mode of privatization in Nigeria”.
“In spite of the fact that the report of the 2011 Senate Ad-hoc Committee which investigated privatization and commercialization of Public Enterprises since the return to civil rule in 1999 as contained in Senate Votes and Proceedings of Wednesday, 14th December, 2011 as a monumental failure due to corruption inspired undervaluation of privatized enterprises, sale of the undervalued enterprises to cronies and political associates, asset stripping, clear breaches of due process, regulatory inefficiency, etc, the Senate resolution in support of the laudable recommendations of the committee has not been implemented”
He was also disturbed that “while the objectives of privatization has not been realized to stimulate economic growth or welfare of the people, the exercise seemed to make the poor poorer by increasing unemployment and reducing access of the poor to basic goods and services through increase in prices in addition to the fact that most of the privatized firms went into comatose after the privatization”.
“The current economic challenges may continue to aggravate with monumental effects on human survival, welfare and development if privatization and commercialization carried out from 1999 date is not revisited to rectify anomalies as alternative for diversified economic reform”, he added.
In his contribution, the Senate Leader, Senate Ahmad Lawan lamented that due process was truncated during the privatization while the interest of co investors was not respected.
Lawan therefore called for comprehensive investigation of the exercise with a view to knowing the agreement and conditions upon which the privatization was consummated and also the amount realized from the sales of the companies.
He particularly advised the Committee on Privatisation to engage the NCP and BPE to review the report on the matter from 2011 till date for a thorough job.
The senate president, Bukola Saraki said the exercise has become necessary so as to stimulate economic growth and welfare of the people, as well as making reducing the rate of unemployment in the country.