Opinion
The Privatisation Debate
The ugly revelations at the senate committee set up in July 2011 to investigate the failed privatisation exercise embarked by the Bureau of Public Enterprise (BPE) have thrown up, once again, the debate on the privatisation and commercialisation programmes and policies of the federal government over the years.
The country has continued to lose colossal sums of money and resources in the name of privatisation of public enterprises. According to media reports, the BPE’S Director General, Bolanle Onoagoruwa, disclosed to the senate Committee that the Aluminium Smelter Company of Nigeria (ALSCON), Ikot Abasi, Akwa Ibom State built at the cost of $3.2bn was sold to Russel, a Russian-based company for $139million. A similar story goes for Daily Times, Delta Steel Company in Delta State, and Eleme Petro – Chemical in Rivers State sold to Folio Communications, Global Infrastructure, and Indorama respectively at paltry sums in comparison with the nation’s huge investments in them.
In the same vein many Nigerians felt that the sale of the Kaduna and Port Harcourt refineries in 2007 to Bluestar Oil Services Ltd, a consortium that comprised the Dagote Group, Zenon Oil, and Transnational Co-operation was under – valued and not transparent. Thus the consortium’s withdrawal from the deal and its (the deal) revocation by the late President Umaru Musa Yar’Adua’s administration were greeted with jubilation across the country. The late President Yar’Adua’s action was seen as a clear demonstration of his respect for public opinion and strict adherence to due process.
But why did, successive administrations in Nigeria embrace privatisation as a sure and direct route to economic progress. From the early 1980s the country began to experience serious balance of payments and debt crisis and huge budget deficits resulting from the collapse of oil prices and the consequent contraction in the foreign exchange earnings. During the period, the country also faced a surge in imports arising from an over-valued naira. Before the oil price collapsed, the enormous windfall accruing from oil revenue impelled the government to assume a greater role in the economic life of the country.
Thus as at 1986 there were about 6,000 public enterprises in Nigeria controlled by the Federal Government in which it had an investment of over N36 billion as equity, loans and grants/subventions.
Besides, these public enterprises with over 5,000 appointments into their managements and boards enjoyed transfers in form of subsidised foreign exchange, import duty waivers, tax exemptions and/or write-off of arrears, and unremitted revenues. And the various state governments also owned and controlled many public enterprises in which they invested billions of naira.
Sadly, the federal government realized less than N500 million annually from its huge investment and had to worry about the interest and principal repayments on the burdensome loans of these enterprises. Consequently, and as a condition for IMF and the World Bank’s support for President Ibrahim Babagida’s Structural Adjustment Programme (SAP), the Federal Government decided to commercialise fully or partially some of its investments, fully privatised some others and terminate support for those which would be partially privatised.
Though the debate over privatisation as an instrument for national economic management has been raging among economies and across many countries for several decades, in Nigeria, the first categorical official statement of intent on privatisation was therefore that made by President Ibrahim Badangida in his January 1986 budget speech.
Privatisation is a complex issue. Frankly, it is a two-edged sword. It can make a country great. It can also destroy a country. Why? Because if not well conceived and handled, it can give rise to social, economic, and political turmoil.
Privatisation is a subject over which people tend to take extreme ideological positions. In Nigeria, while some people see the country’s privatiosation as a policy designed to correct distortions arising from past poor public investment decisions, others perceive it as a deliberate and conscious attempt by the power elite to appropriate the national wealth to the detriment of the working people.
Public outburst against the sale of public enterprises and other national assets to few individuals rests on a number of fundamental economic, social, political, and institutional arguments. The arguments are complex but they are not new. Going into the arguments fully will take us beyond the concerns of this piece. But essentially they revolve around the issues of economic efficiency, equity, and ideology. Several studies carried out by scholars including Spann and Christenaan who compared the operations of voluntary, public, and profit making hospitals in the US and private and public railroads companies in Canada respectively found no significant difference between private and public provisions.
The inefficiency associated with public provision in Nigeria is due to downright “thievery” and indiscipline which are more pronounced in our public organizations than the private sector.
Considering the country’s low level of development and the imperfections both of structure and operation, government intervention is required to influence the distribution of wealth in a desired fashion. This is because private provision may not only be inequitable but may also be subject to economic inefficiencies.
The ideological arguments revolve around the perception that collective provision and finance cater for communal, rather than, self interest. Such communal provision reflects more correctly the pattern in our traditional societies before they were corrupted by western notions of private interests.
Therefore, even if we have committed ourselves to privatisation, it is imperative to openly discuss and come to terms with its overall philosophy and political economy, realizing that the exercise involves loss of jobs, greater distributional inequality, vesting the national assets in the hands of a few individuals and so on.
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Empowering Youth Through Agriculture
Quote:”While job seeking youths should continuously acquire skills and explore opportunities within their immediate environment as well as in the global space through the use of digital platforms, government, corporate/ multinational organizations or the organised private sector should generate skills and provide the enabling environment for skills acquisition, through adequate funding and resettlement packages that will provide sustainable economic life for beneficiaries”.
The Governor of Rivers State, Sir Siminalayi Fubara, recently urged youths in the Rivers State to take advantage of the vast opportunities available to become employers of labour and contribute meaningfully to the growth and development of the State. Governor Fubara noted that global trends increasingly favour entrepreneurship and innovation, and said that youths in Rivers State must not be left behind in harnessing these opportunities. The Governor, represented by the Secretary to the State Government, Dr Benibo Anabraba, made this known while declaring open the 2026 Job Fair organised by the Rivers State Government in partnership with the Nigeria Employers’ Consultative Association (NECA) in Port Harcourt. The Governor acknowledged the responsibility of government to create jobs for its teeming youth population but noted that it is unrealistic to absorb all job seekers into the civil service.
“As a government, we recognise our duty to provide employment opportunities for our teeming youths. However, we also understand that not all youths can be accommodated within the civil service. This underscores the need to encourage entrepreneurship across diverse sectors and to partner with other stakeholders, including the youths themselves, so they can transition from being job seekers to employers of labour,” he said. It is necessary to State that Governor Fubara has not only stated the obvious but was committed to drive youth entrepreneurship towards their self-reliance and the economic development of the State It is not news that developed economies of the world are skilled driven economies. The private sector also remains the highest employer of labour in private sector driven or capitalist economy though it is also the responsibility of government to create job opportunities for the teeming unemployed youth population in Nigeria which has the highest youth unemployed population in the subSahara Africa.
The lack of job opportunities, caused partly by the Federal Government’s apathy to job creation, the lack of adequate supervision of job opportunities economic programmes, lack of employable skills by many youths in the country have conspired to heighten the attendant challenges of unemployment. The challenges which include, “Japa” syndrome (travelling abroad for greener pastures), that characterises the labour market and poses threat to the nation’s critical sector, especially the health and medical sector; astronomical increase in the crime rate and a loss of interest in education. While job seeking youths should continuously acquire skills and explore opportunities within their immediate environment as well as in the global space through the use of digital platforms, government, corporate/ multinational organizations or the organised private sector should generate skills and provide the enabling environment for skills acquisition, through adequate funding and resettlement packages that will provide sustainable economic life for beneficiaries.
While commending the Rivers State Government led by the People First Governor, Sir Siminilayi Fubara for initiating “various training and capacity-building programmes in areas such as ICT and artificial intelligence, oil and gas, maritime, and the blue economy, among others”, it is note-worthy that the labour market is dynamic and shaped by industry-specific demands, technological advancements, management practices and other emerging factors. So another sector the Federal, State and Local Governments should encourage youths to explore and harness the abounding potentials, in my considered view, is Agriculture. Agriculture remains a veritable solution to hunger, inflation, and food Insecurity that ravages the country. No doubt, the Nigeria’s arable landmass is grossly under-utilised and under-exploited.
In recent times, Nigerians have voiced their concerns about the persistent challenges of hunger, inflation, and the general increase in prices of goods and commodities. These issues not only affect the livelihoods of individuals and families but also pose significant threats to food security and economic stability in the country. The United Nations estimated that more than 25 million people in Nigeria could face food insecurity this year—a 47% increase from the 17 million people already at risk of going hungry, mainly due to ongoing insecurity, protracted conflicts, and rising food prices. An estimated two million children under five are likely to be pushed into acute malnutrition. (Reliefweb ,2023). In response, Nigeria declared a state of emergency on food insecurity, recognizing the urgent need to tackle food shortages, stabilize rising prices, and protect farmers facing violence from armed groups. However, without addressing the insecurity challenges, farmers will continue to struggle to feed their families and boost food production.
In addition, parts of northwest and northeast Nigeria have experienced changes in rainfall patterns making less water available for crop production. These climate change events have resulted in droughts and land degradations; presenting challenges for local communities and leading to significant impact on food security. In light of these daunting challenges, it is imperative to address the intricate interplay between insecurity and agricultural productivity. Nigeria can work toward ensuring food security, reducing poverty, and fostering sustainable economic growth in its vital agricultural sector. In this article, I suggest solutions that could enhance agricultural production and ensure that every state scales its agricultural production to a level where it can cater to 60% of the population.
This is feasible and achievable if government at all levels are intentional driving the development of the agricultural sector which was the major economic mainstay of the Country before the crude oil was struck in commercial quantity and consequently became the nation’s monolithic revenue source. Government should revive the moribund Graduate Farmers Scheme and the Rivers State School-to-Land agricultural programmes to operate concurrently with other skills acquisition and development programmes. There should be a consideration for investment in mechanized farming and arable land allocation. State and local governments should play a pivotal role in promoting mechanized farming and providing arable land for farming in communities. Additionally, allocating arable land enables small holder farmers to expand their operations and contribute to food security at the grassroots level.
Nigeria can unlock the potential of its agricultural sector to address the pressing needs of its population and achieve sustainable development. Policymakers and stakeholders must heed Akande’s recommendations and take decisive action to ensure a food-secure future for all Nigerians.
By: Igbiki Benibo
