Kill v. Hollister I wills 129.
Thompson v. Charnock, 8 TR 139.
Pierey v. Young. (1879) 14 Ch. D. 200.
The United Nigerian Insurance Co. Ltd v. Leaner Stucco (1973) 3 Sc.11.
Ita V. Idiok (1920) 4 NLR, 100
Khawam and Bros Ltd v. Ediht Ltd (1967) NLR, 125.
Nipol. v. Bioku Investment and Property Co. Ltd (1992) 2 SCNJ, 58
Home Development Ltd v. Scancilia Contracting Co. Ltd. (1994) 9 SCNJ. 87.
Re North Anstraham Territory Co. Achers Case (1891-4) All ER 150 at 152 (1882) 1 Ch. 322.

i.                    Arbitration and Conciliation Act, Cap. 19, Laws of the Federation of Nigeria, 1990.
ii.                 The Banks and Other Financed Institutions Decree (BOFID) 1991…
iii.               The Public Enterprises Decree No. 18 of 1994.
iv.               The Public Enterprises decree No. 35 of 1996 – S.38.
v.                  The 1999 Constitution of the FRN
1.      S.4 (8)
2.      S.6 (6)
3.      S. 36
4.      S.215
vi.               The Public Officers Protection Act.
vii.             The Public Enterprises (Privatization and Commercialization) Act No. 28 of 1999.
1.      S1(1) and (2)
2.      S.2
3.      S.3
4.      S.5
5.      S.6
6.      S.8
7.      S.9(1) (2) and (3)
8.      S.10
9.      S.11
10. S.12
11. S.13
12. S.14
13. S.15
14. S.16
15. S.17
16. S. 23(1) (2) (3) and (4)

Co. – Company
Ltd. – Limited
Plc. – Public Limited Company


1.1       Background of the Study
1.2       Statement of Problem of the Study
1.3       Research Questions
1.4       Objectives of the Study
1.5       Hypothesis
1.6       Significance of the Study
1.7       Scope and Delimitation of the Study
1.8       Limitations of the Study
1.9       Methodology.

2.1       Conceptual Clarification
2.2       Definition of terms
2.3       Origin and Evolution of Public Corporations in Nigeria
2.4       Basis & Necessity for State Enterprises
2.5       The Imperatives for Privatization
2.6       Specific Reasons for the Inefficiency in our Public enterprise
2.7       The Objectives of Privatization & Commercialization Act No. 28 of             1999
2.8       Staff Involvement in Privatized and Commercialized Enterprises
2.9       Enterprises to be Privatized and Commercialized.

3.1       Legal & Institutional Framework for Privatization         Commercialization in Nigeria.
3.2       Analysis of the Privatization and Commercialization Decree of         1988
3.3.1   The Bureau for Public Enterprise (BPE)
3.3.2 Functions, Powers and Staff of the Bureau
3.3.3 Legal Proceedings
3.3.4 Public Enterprises Arbitration Panel
3.4.1   National Council on Privatization (NCP)
3.4.2   Functions and Powers of the NCP.

4.1       The Effects of the Act on our Legal System
4.2       Profits of Privatization so far
4.3       Short comings of the Privatization Exercises
4.4       Politics of Privatization in Nigeria.

5.1       Summary of Findings
5.2       Recommendations
5.3       Conclusion.

A full appreciation of the legal framework for Privatization in Nigeria entails not only an understanding of the laws governing the process, but of the process itself. Indeed, every stage of the Privatization process has legal implication[1].
The walls of our Privatization structure will not stand unless the right legal, institutional and financial framework exists in the country. This has two broad positive effects. First, the right framework engenders a conducive environment for private sector participation and growth. Secondly, it enables the Privatization agency to carry on more confidently, being conscious of the definite parameters within which to operate.
The laws governing and regulating the Privatization Program in Nigeria can be categorized into three as follows:
1.      The Public Enterprise (Privatization and Commercialization) Act, 1999.
2.      Specific laws establishing and regulating the enterprises to be privatized. These are specific laws enacted to establish and regulate the business of a particular enterprise that is being privatized. These laws are the instrumentality from which a particular enterprise derives its existence and they set out the guidelines for their operations. Eg NICON ACT, NIGERIAN RE-INSURANCE ACT, NIGERIAN PORTS AUTHORITY ACT etc.
3.      General laws regulating the business and conduct of publicly owned enterprises. These general laws includes[2]:
a.      Sector specific laws such as Nigerian Communications Act, the Mining Act, and the Insurance Act etc.
b.      Commercial laws such as Companies and Allied Matters Act and the Investment and Securities Act.
c.      The Land Use Act and other use laws.

Analysis of the Privatization and Commercialization Decree of 1988
Privatization in Nigeria was formally introduced by the Privatization and Commercialization Decree which was promulgated on the 5th of July, 1988 as part of the structural Adjustment Program (SAP) of the Ibrahim Badamosi Babangida administration (1985-1993). As McGrew argued, SAP is a neo-liberal development strategy devised by international Financial Institutions to incorporate national economics into global market.
One of the main objectives of SAP was therefore to pursue deregulation and Privatization leading to removal of subsidies, reduction in wage bills and the retrenchment of the public sector ostensible to trim the state down to size. Consequently, user charges for social services and utilities which are statutorily established in the past will be decontrolled and allowed to reflect the scarcity or values of the resources committed into their production. Also investment funds based on statutory allocations, grants and loans will be scrapped since it will be the responsibility of the financial market on their own. Furthermore, all types of administrative controls will be eliminated.
The Decree defines “Privatization” as “the relinquishment of part or all of the equity and other interests held by the Federal Government or its agency in enterprises whether wholly or partly owned by the Federal Government”[3]
“Enterprises” (Public) is defined by the Decree to mean “any corporation, board, company or parastatal established by or under any enactment in which the Federal Government or any of its departments, ministries, or agencies has ownership or equity interest and shall include a partnership, joint ventures or any other form of business or management of organization”
The Decree also defines “Commercialization” to mean “the re-organization of enterprises wholly or partly owned by the Federal Government in which such commercialized enterprises shall operate as profit-making commercial ventures and without subventions forms from the Federal Government”
The Decree has two schedules, each of which contains two parts. Part I of the first schedule lists forty three (43) companies which are to be partially privatized. This category comprises enterprises in which the Federal Government’s existing equity holdings are to be maintained, and those where the Government is to divest partially to a specified percentage. Included in this group we have Commercial and Merchant Banks, Agricultural Cooperative and Development Banks, oil marketing companies, Sugar companies, Cement and Steel Rolling Mills etc. Part II of the same schedule comprises of the largest category (65 enterprises) which are to be fully privatized. Most of these have been existing as incorporated companies before the decision to privatize them. These enterprises are mainly in the sub groupings of Agro-allied, manufacturing, Insurance, Hotels and Construction. Etc.
The second schedule similarly consists of two parts. Part I lists fourteen (14) enterprises which are to be partially commercialized. These are in diverse categories and include the Iron and Steel plants, Radio and Television, utility and the Nigerian Security Printing and Minting Company. Part II of the same schedule, lists eleven (11) enterprises to be fully commercialized. These comprise enterprises in exploration and mining, Telecommunication service and insurance.
A quick examination of the schedules will reveal that the Government intends to retain its control in strategic enterprises such as iron and steel, currency and minting, electricity generation, airport, railway, radio and television network, mining and telecommunications.
However, sections 1(3) and 12(3) of the Decree empowers the president or Head of state to make orders at any time to alter, modify, add to, or delete from or amend any of the enterprises listed in both schedules to the decree so as to alter the category to which any enterprise belongs. By section 2 of this decree, “The control, management and composition of the boards of director of privatized enterprises shall as from the date of Privatization reflect the ownership structure of the enterprise”. The provision appears to have limited the scope of Government interference, though it has not eliminated it, given the likelihood that Government’s minority stake of up to 35% in some cases may well decide the fate of the Public Enterprise slated for partial Privatization. This is because of the implication of the situation in which the Federal Government has 40% equity and as it is possible by virtue of the provisions of S. 7(2) and 7(6) of the Decree, no other shareholder, cooperate or individual can have more than 1% equity in the hands of bureaucratic Government officials, and as usual, Government’s undue interference in Public Enterprise operational activities, high turnover in the board membership and top management of such enterprises. It is therefore submitted that ‘Partial Privatization’ with Government singly owning 40% equity while the remaining 60% is spread in infinitesimal and insignificant proportions over a large number of individual shareholders will not remove the elements that characterize the failure of Public Enterprise also ‘Partial Privatization in the context of Decree No. 25 is not a sufficient cure for the ills of the Public Enterprise unless it is accompanied by a private control and management. It is submitted that anything short of private control and ownership should not be regarded as Privatization at all.
However, no specific guidelines as to principles, procedures and modalities are provided by the decree in respect of enterprises that have been given limited autonomy in fixing rates, prices and charges and may capitalize their assets in order to improve their access to the capital market. They are also allowed to borrow on their own and issue debenture stocks[4]. There is also the general requirement that they should now operate as profit making commercial ventures without subventions from the Government[5].

The Act in its S.12 (1) established the Bureau. It is a body corporate with perpetual succession and a common seal and may sue and be sued in its corporate name. It is the secretariat of the National Council on Privatization and is charged with the overall responsibility of implementing the Privatization and Commercialization program of the Federal Government of Nigeria and with a vision of being the model reform agency.
The Technical Committee on Privatization and Commercialization Act of (1988) (TCPC), submitted its Final report in 1993 and recommended the establishment of the Bureau of Public Enterprises (BPE) to continue the Privatization process. The Federal Government accepted the recommendation and promulgated the BPEs Decree No. 78 of 1993. The Decree repealed the TCPC Decree and transferred its functions to the BPE. With the promulgation of the Decree which was gazetted in Government Notice No. 45B of 1st September, 1993, the members of the TCPC metamorphosed into the management Board of the BPEs. Because of the success of the past exercise, the Military Government under General Abdusalam Abubakar promulgated the Public Enterprises (Privatization and Commercialization) Decree No. 28 in early 1998 (before the handover to a democratically elected Government) which made it an Act. The Act repealed the BPE Decree of 1993 and the Decree allows BPE to alter, add, delete or amend the provisions in the document in the best interest of the country. It was created by the National Council on Privatization (NCP).

S.3 of the BPEs Decree No. 78, 1993, provides for the functions of the Bureau. With respect to privatization, the bureau shall;
a.      Implement the Council policy on Privatization.
b.      Prepare Public Enterprise approved by the Council for Privatization.
c.      Advise the Council on further Public Enterprise to be privatized.
d.      Advise the Council on the capital restructuring needs of the Public Enterprise to be privatized.
e.      Carry out all activities required for the successful issue of shares and sale of assets of the Public Enterprises to be privatized.
f.       Make recommendations to the Council on the appointment of consultants, and advisers, investment bankers issuing houses, stock brokers, solicitors, trusted accountants, and other professionals required for the purposes of Privatization.
g.      Advice the Council on the allotment pattern for the sale of the shares of the Public Enterprises set out for Privatization.
h.      Oversee the actual sale of shares of the Public Enterprise, by the issue houses, in accordance with the guidelines approved from time to time by the Council.
i.        Ensure the success of the Privatization exercise taking into account the need for balance and meaningful participation by Nigerians and Foreigners in accordance with the relevant laws of Nigeria.
j.        Perform such functions with respect to Privatization as the Council may, from time to time assign to it[6].

(a)              Implement the Council’s policy on Commercialization.
(b)              Prepare Public Enterprises approved by the Council for Commercialization
(c)              Advise the Council on further Public Enterprise to be commercialized.
(d)              Ensure the success of the Commercialization exercise and monitors on a continuous basis for such period as may be considered necessary the operations of the Public Enterprises after Commercialization.
(e)              Review the objective for which Public Enterprises were established in order to ensure that they adapt to the changing needs of the economy.
(f)               Ensure that Public Enterprises are managed in accordance with sound commercial principles and prudent financial practices.
(g)              Interface with the Public Enterprises, together with the supervising ministries, in order to ensure effective monitoring and save guarding of the Public Enterprises Managerial Authority.
(h)              Ensure that the board and management of each commercialized enterprise and the Government of the Federation keeps to the terms and conditions of the performance agreements if any between the Public Enterprise concerned and the Government of the Federation.
(i)                Maintain and review on a continuous basis any performance agreement between a Public Enterprise and the Government of the Federation.
(j)                Evaluate and recommend to the Council whether or not a Public Enterprise is eligible for funding through grants, loans, subventions or equity and
(k)              Perform such other functions with respect to Commercialization as the Council may from time to time assign it[7].
The bureau shall be subject to the overall supervision of the Council to have power to:
(a)              Acquire, hold and manage moveable and immovable properties.
(b)              Enter into contract or partnership with any company, firm or person which in its opinion will facilitate the discharge of its functions.
(c)              Request for and obtain from any Public Enterprise statistics and other information including reports memoranda and audited accounts and other information relevant to its functions under the Act and
(d)              Liaise with relevant bodies or institutions locally or overseas for effective performance of its functions under the Act.

According to S.17 (1) of the Act, there shall be appointed for the bureau, a Director General who shall
(a)                 Be appointed by the President of the Federal Republic of Nigeria.
(b)                 Not to be below the rank of a permanent secretary in the Civil Service of the Federation.
The Director General shall be the chief executive of the Bureau and the secretary to the Council[8] and shall hold office for a period of four years in the first instance and may be re-appointed for a further period of four years and on such terms and conditions as may be specified in his letter of appointment[9].
There shall be established for the Bureau a management committee comprising the Director General and departmental head who shall be responsible for implementation of the policies of the Council and the day to day administration of the Bureau[10].
The Bureau may appoint such member of other persons to be employee of the Bureau in the performance of its functions under this Act[11] but this notwithstanding employees of the Bureau may be appointed by way of transfer or secondment from any of the public services of the Federation[12].
The Bureau being a mere implementation agency of the Council should not perform functions that conflict with or usurp that of the Council.
But I discover that the function of the Bureau under S. 13 (10) (e), that is issuing and selling shares and assets of an enterprise to be privatized is just the same as, and then, in direct conflict with that of the Council under S. 11(h). It may be argued that if there is such actual conflict, the functions, powers of the Council shall prevail, but I think that such inconsistencies will lead to uncertainty of roles or overlap or abandonment.
For this reason therefore, I submit that the Act be amended and functions be allotted to the Council and the Bureau in such a way there will be no doubt as to who is to do what and how.
The establishment of these bodies and their functions has gone to show how the objectives of Privatization and Commercialization are to be achieved. But this is not all. The Act has made some other provision that will see to the realization of these objectives.
The draftsman of the Act rightly observed that in the process of divesting and resting of shares and ownerships, disputes may arise. So provisions are made on how to go about legal proceedings arising therefrom.
S.23(1) of the Act provides that subject to the provisions of this Act, the provisions of the Public officers Protection Act shall apply in relation to any suit instituted against any officer or employee of the Bureau. The whole essence of this Act is to shield Public Officers from actions which their acts or omissions would normally have brought about. This is no doubt a violation of the Rule of Law as enunciated by Prof. A. C. Dicey that everybody should be treated equally under the law. That all who goes contrary to the law should be tried in the ordinary court of law. The big question we need to answer is what is so peculiar about officers and employees of the Bureau that warrants their exclusion from legal proceedings.
“Notwithstanding anything contained in any other law or enactment, no suit shall lie against any member of the council, the Director General or any other Officer or employee of the Bureau for any act done in pursuance or execution of this Act or any other law or enactment or any public duty or authority or in respect of any alleged neglect or default in the execution of his duty under this Act or any other law or enactment, duty or authority, shall lie or be instituted in any court unless it is commenced within three months next after the acts, neglect or default complained of; or in the case of a continuation of jury, within six months next after the ceasing thereof”[13].
It seems to me that this limitation period for action under the Act is too short. Acts have always validly provided for limitation periods for actions or acts done or omissions made under them, but when we consider the Act in review and the nature of disputes that are likely to arise under it, we realize the shortcoming I am pointing at. Since the Privatization and Commercialization process are somewhat new to us, I submit that there is need for some judicial liberalization. Let people be given time enough to bring their disputes to Court after finding out their causes of action. This will not only enhance a peaceful execution of the program, it will also afford our Courts the opportunity to research and study the intricacies of the program and come out with seasoned legal decisions and principles that reflect our circumstances.

S. 23(1) Provides that:
No suit shall be commenced against a member of the Council, the Director General, officer or employee of the Bureau before the expiration of a period of one month after written notice of intention to commence the suit has been served upon the Bureau by the intending plaintiff or his agent”.
We need recall that under S. 23(2), the limitation period for action under this Act is three months. Then under this Subjection (3) one out of the three months must be spent on filing notice and waiting. This is clearly a further reduction of the limitation period to two months.
This situation is made worse by S. 24 which provides that:
“A notice, summons or other documents required or authorized to be served upon the Bureau under the provisions of this Act or any other law or enactment may be served by delivering it to the Director General or by sending it to the Director General at the principal office of the Bureau”
This provision makes palpable the difficulties which the intending litigant encounters in filing his notice within one month. He has to get to the Director General in person at the principal office of the Bureau. It means that if someone in Cross River State wants to sue the Bureau he must go to Abuja with his notice to see the Director General who he is most unlikely to actual see. It occurs to me that this good for nothing provision has the singular effect of frustrating litigants and their actions against the Bureau.
Furthermore, this provision is a violation of the rule of natural justice that nobody shall be judged in his own case. If for instance, I want to sue the Bureau for a claim the Director General is both my personal and nominal defendant. It may be that serving notice on the Director General does not mean that it is him that hears the matter but it nonetheless clothes him an air of superiority over the claimant. The question is why then am I presenting a notice of the action to the Director General? More seriously considered why must I be bound to wait for a month for my notice before I go on with the suit. These are fundamental legal questions, and I hope that when the time comes the legislature shall answer them and make corresponding amendments to the Act.
The Act[14] says that in any action or suit against the Bureau, no execution or attachment of process in the nature thereof shall be issued against the Bureau. This Provision though a pervasion of the normal judicial execution process, is tolerable for two reasons. One is that it will guard against hijacking public properties.
Furthermore the same Act in S. 25(2) has provisions for payment of sums of money awarded by the Court against the Bureau from the general reserve fund of the Bureau.

There is also established under the Act an Adhoc body to be known as the Public Enterprise Arbitration Panel (in this work referred to as “Panel”) which shall be responsible for effecting prompt settlement of any dispute arising between an enterprise and Council or Bureau[15].
The panel shall consist of five persons who shall be persons of proven integrity one of whom shall be the chairman[16]. S. 27 (4) of the Act provides that:
“The Council shall appoint the members of the panel on such terms and conditions as it may deem fit”
The Panel shall have the power to arbitrate:
a.      In any dispute raising questions as to the interpretation of any provisions of a performance Agreement, or
b.      In any dispute on the performance or non performance by any enterprise of its undertaking under a performance agreement[17]
The ruling of the Panel shall be binding on the parties and to appeal shall lie from a decision of the Panel to any Court of law or Tribunal[18].
Two questions agitate my mind on this arbitral Panel. The first is about its impartiality. I have made efforts in vain to find out whether there is any difference between an arbitral tribunal as in general and an arbitral panel specifically under the Act. S. 57 of the Arbitral and Conciliation Act even defines an arbitral tribunal as a sole arbitrator or a panel of arbitrators.
I therefore take them to be the same, and assume the same rules guide them. Under S. 6 of the Arbitration & Conciliation Act,[19] parties to an arbitration tribunal appoint members of their arbitration tribunal on equal basis. But S. 28 (4) of the Act No. 28 of 1999 empowers the Council to appoint all the five members of the arbitral Panel to adjudicate on a matter wherein the Council itself is a disputant. It is impossible to see how the arbitrators appointed by the Council can hand down any decision (award) that is impartial or in favor of the Council. There is a serious need for review on this point.
The next problem with the provisions on the arbitration panel lies in S. 28 (3) of the Act which provides that:
Ruling of the panel shall be binding on the parties and no appeal shall lie from a decision of the panel to any Court of law or Tribunal”
This provision reminds me of S. 6 (6) of the 1999 constitution of the Federal Republic of Nigeria which gives judicial powers to the Courts. Of  S. 251 of the same Constitution which gives the Federal High Courts unlimited jurisdiction to try matters relating to incorporated Company and of S. 4 (8) of the same constitution which precludes the legislature from making laws which oust the jurisdiction of the courts. Even within the confines of arbitration law, the case of Agu v Ikewibe[20] has stipulated that parties to an arbitrator cannot undertake to be bound by the arbitration award handed by their arbitrators.
The matter again needs the attention of the Legislatures or the Courts should be allowed to give it an appropriate interpretation[21]. So far, this is all the Act has done to ensure a smooth and fair achievement of the objective of the Privatization and Commercialization Program. The next chapter shall consider the contributions of the Act and its program to our legal system.
The NCP is a think tank sponsored by the Nigerian government to determine the political, economic and social objectives of the Privatization and Commercialization of Nigerians Public Enterprises. In other words it is the apex body charged with the overall responsibility of formulating and approving policies on Privatization and Commercialization.
The council was established and inaugurated in July 1999 under the Tenureship of President Olusegun Obasanjo. S. 9 (1) of the Act provides for its establishment.
The legal framework, for the program is the Public Enterprises (Privatization and Commercialization) Act and it consists of the Vice President as Chairman, the Minister of Finance as vice chairman; the Attorney-General of the Federation and Minister of Justice; the Minister of Industry; and  a host of others as provided in S. 10 of the Act. S. 9 (2) of the Act provides that the council may co-opt the supervising minister of an affected Public Enterprise to attend relevant meeting of the council. 

Being the supreme regulatory body in charge of the Privatization and Commercialization program, the Council is charged with multi-various and supervisory functions and powers to do the following.
(a)              To determine the political, economic and social objectives of            Privatization and Commercialization of Public Enterprises.
(b)  To approve policies on Privatization and Commercialization.
(c)              To approve Privatization and choice of strategic investors
(d)  To approve guidelines and criteria for valuation of Public      Enterprise which should be by public or private issue or otherwise          and advise the Government of the Federation accordingly.
(e)              To approve the legal and regulatory frame work for the           Public Enterprises to be privatized.
(f)               To determine whether the shares of a listed Public        Enterprise should be public or private issue or other wise and advise the Government of the Federation accordingly.
(g)              To determine the time and when a Public Enterprise is to be   privatized.
(h)  To approve the prices for shares or assets of the Public           Enterprise to be offered for sale.
(i)                To review, from time to time the socio-Economic effect of      the program of Privatization and Commercialization and            decide on appropriate remedies.
(j)                To approve the appointment of Privatization advisers and      consultants and their remuneration.
(k)              To appoint as and when necessary committees comprising persons from private and public sectors with requisite  technical competence to advise on the Privatization or             Commercialization of specific Public Enterprises.
(l)                To approve the budget of the council.
(m)                        To approve the budget of the Bureau.
(n)  To supervise the activities of the Bureau and issue directions
from the implementation of the Privatization and Commercialization program.
(o)  To receive and consider for approval the audited accounts of the Bureau.
(p)  To submit to the President of the Federal Republic of Nigeria in each year a report on the activities of the council and    Bureau.
(q)  Receive regular and periodic report from the Bureau on program implementation and give appropriate directions.
(r)               Perform such other functions as may from time to time be necessary to achieve its objectives[22].
Note here that the basic problems the Nigerian populace had and still have with the Privatization and Communication program was the question of transparency.
It was in the beginning of the program as it still is today in the lips of everybody that Privatization meant nothing more than Obasanjo and his cliques taking over the Nigerian Public Enterprises and converting them into their own private business. I too hold this view.
In the face of these doubts, one would expect a transparent and incorrupt Chief Executive or the National Council on Privatization in such a way that it will be substantially independent of both the Chief Executive and the National Council. But no such effort was made here.
It is pertinent to note here that twelve out of the thirteen members of the Council are members of the National Executive Council. The eleven ministers in the Council are appointees of the President and the Vice President who is the Chairman of the Council is a loyalist to the President, as we know. The thirteenth member of the Council is the Director General of the Bureau for Public Enterprises. He too is an appointee of the President[23].
The fact is everywhere that President Obasanjo made all his Ministers and appointees sign undated letters of resignation. The essence is that the moment a Minister appointee disagrees with him, he shall put a date on the letter and carry it that the Minister has resigned.
The point I am making here, is that the Council is not independent and cannot therefore be transparent and efficient. Shares and assets of privatized companies cannot be sold by the Council the way the President does not approve of, if any members of the Council dares disagree with His Excellency, he loses his job.
The insecurity of the tenure makes them comfortable with being stooges of the President. So the fear of the populace that President Obasanjo and his allies will eventually buy and own up all the Public Enterprises in this country has not been removed.

Like every other law or program, the Act and the Privatization and Commercialization Program is bound to have effects on our legal system and even on the entire strata of socio-political system. Some of these effects will be favorable and some adverse. So I shall discuss the points in this chapter under two heads, is favorable effects and adverse effects.
(i)                Nigeria has been a mixed economy, that is, some factors of Production has been owned by individuals while some owned by the State. It is a mixture of Socialism and Capitalism. If the indices that regulate demand and supply are in good function, they will determine equitable price in a mixed economy. Then since most Public Enterprises are not profit oriented, their goods and services come cheaper than those from Capitalist. This will mean lower prices and higher demands for the public goods and services. Since the Capitalist are always in competition with the Public Enterprises, they are forced to reduce their own prices too. It is always a lease of life to customers. But in the Nigerian example, the Public Enterprises are not efficient and can so not make its goods and services cheaper. This means that we do not have need of them. The Act has effect of returning us to capitalism. Let us watch it unfold.
(ii)             The second favorable effect and contribution of the Government of its shares, is the enterprises making it spend less or nothing on them anymore. What is saved in this way is channeled to areas like health, education and other infrastructure. This will bring about socio-economic growth and development.
(iii)           The Act will invariably solve the unemployment problem in Nigeria. It is hoped that companies after Privatization will become more efficient with absorption of more labor.
(iv)           Privatization and Commercialization are bound to create new investment. Most of the core and strategic investors that buy up shares in these companies are Foreign Investors. If they taste it and like it then we will have invariably regained faith and confidence which the Nigerian investment has lost before now.
(v)              Privatization and Commercialization brings about competition, and competition will on the long run bring about steady supply of goods and services at lower prices. The telecommunication sector has started working this miracle. We see today that “simpacks” of telephone service providers which were selling for Twelve Thousand Naira (N12,000.00) some years back, now sell for One Hundred Naira (N100.00) only.
i.                    The major adverse effect of the Act is its penchant for being inconsistent with pre-existing laws. For instance, while S. 36 of the 1999 Constitution generally makes everybody subject to the law, S. 23 (1) of the Act precludes officers and employees from legal proceedings. This is pure conflict with the aged doctrine of the Rule of Law. Again Sections 6 & 7 of the Arbitration and Conciliation Act gives both parties to an arbitration an equal hand in appointing arbitrators, while S. 27 (4) of the Act provides that only the Council shall appoint all the five arbitrators to seat in an Arbitral Panel on a matter involving the Council itself. These and some other provisions in the Act only guarantee the unsettling of our legal system.

ii.                 Privatization and Commercialization will lead to further Capitalism of the bourgeoisie at the expense of the already hungry proletariat. Experience has shown us that shares of privatizes companies are sold at prices that only the rich can afford if this trend is not watched, we shall find that the program and its whole essence will be incapable of bettering the lot of the poor.

Past Nigerian Presidents with the likes of Ibrahim Badamosi Babangida (IBB) and Obasanjo passed the ownership and control of Nigeria’s state owned enterprises to their friends, family, relations and themselves in the name of Privatization. For example, some of the most celebrated Nigeria’s privatized public assets during Obasanjo’s tenure (1999-2007) includes; Ajaokuta Steel Mill, Delta Steel Complex, Jos Steel Rolling Mill, Oshogbo Machine Tools and Itakpe Iron Ore Company. Others include Nigeria Airways; Nigerian Telecommunication Company (NITEL) and its Mobile Phone subsidiary company – MTEL; NICON Hilton Hotel (Transcorp Hilton Hotel); African petroleum Limited (AP); National Oil and Petrol Chemical Company; National Fertilizer Company (NAFCON); Cement companies; Oil blocks and Banks, just to mention a few. The way and manner in which these assets changed hands and the selection of who owns what and at what price are still generating many unanswered questions and concerns in Nigeria. These concerns and questions were some of the challenges former President Yar’adua confronted.
Some of the reasons why the Nigerian public is not happy with Obasanjo’s Privatization policy and programs are largely that they were done in bad faith and were out of tune with the principles of transparency, accountability and due process. Moreover, they widened the existing gap between the “haves” and “have-nots”. In addition, the much taunted expected improvements of service and product delivery did not happen. The scheme created lasting sense of injustice, parochialism and nepotism in the polity. Furthermore, it discredited the anti-corruption stance of the administration.
The political economy implications of the affair are many. For example, the scheme created a new crop of oligarchies in the mould of Transcorp and other similar outfits with concentrated economic and political powers which are dangerous to the sustainability of democracy, institutions, rule of law and good governance in Nigeria. Privatization also serve as a money laundering instrument to a great extent, in order to legalize illegally accumulated wealth, such as income from international drug trafficking.
Despite the fact that Privatization and Commercialization have their bad effects, these are out weighted by their good effects. I believe we are still at the experimental stage of this program. In time we shall find a way of eliminating these adverse effects or at least make sure the good effect predominate them.

The summary point is that, if Privatization and Commercialization Program is carried out with sincerity of purpose, almost every group will come out ahead as a result of divestiture. The idea of Privatization is that the state should ensure that essential goods and services are provided but not aimed to be the sole producer or deliverer, whereas the past Government was seen as often squeezing out market supplies, it is now expected to support their development and promote competition. Meanwhile, in the three years of the implementation of Privatization, the Technical Committee on Privatization (TCPC) has been able to complete Privatization work on 62 out of the 73 enterprises slated for full Privatization, and 22 out of the 25 enterprises slated for partial Privatization. On the commercial aspect of the program, the number of Public Enterprises whose performance agreements have been entered into stood at 22 as at mid 1992. So far, the exercise has generated (for the Government) over N1.6 billion as Privatization revenue, created over 600,000 new share holders in the country, bridging both income and geo-political dividers, radically changed the structure and depth of the Nigerian Capital Market and created awareness of the virtue of share ownership as a form of savings. The program has relieved the Federal Government of what was the huge and growing burden of financial debts and deficits of Public Enterprises. It has improved the allocation efficiency of the National Economy and enhanced the volume of corporate taxes accruing to the National Treasury. However, Privatization is not a blanket solution for the problems of poorly performing state owned enterprises. It cannot in and of itself make up totally for the lack of competition, for weak capital markets or for the absence of an inappropriate regulatory framework. But where the market is basically competitive, or when a medium of regulatory capacity is present, private ownership yields substantial benefits,
At this juncture, one must acknowledge that all over the world, the right of Government to participate in the economic activities has been established and there is no Government which completely abdicates its economy to the private sector. The degree of intervention varies from country to country. Government also needs to generate funds for the provisions of its social responsibility which it cannot abandon to the private sector. Thus enterprises which render essential services and are virtual monopolies in their industries need not be privatized. They are better commercialized. Full commercialization usually indicates the strategic nature and the high profit potentials of an enterprise. Commercialization of such an enterprise will enable Government to earn the high profit which it can then use for the performance of its social duties and economic development. Deliberate care must be taken never to replace Government monopoly with private monopoly. Accordingly, enterprises such as NITEL, PHCN and NNPC etc. should not be privatized in the absence of any competition in the market. They are better fully commercialized so as to enable them to be financially independent and improve their economic performance.
The above does not however suggest that Commercialization is the only means of achieving Public Enterprise reform where Privatization is not suitable. But what lessons are there for Nigerian, Africa and the Third World countries; undertaking similar programs? Our experience in Nigerian points to the fact that it is difficult if not impossible for the Government in developing countries to divest its interest in enterprises completely. In many African countries, the institutional infrastructure for viable option for most African countries is to subject a substantial part of the Public Enterprise sector to reforms that will help them achieve management and productive efficiency.
So far, there have been provisions of the Act that appeal to me, yet there have likewise been some I think are in need of repeal or at least an amendment.
In general however, I see the Act as being worthy of existence provided certain amendment are made.
1.    The present constitution of the council seems improper. It makes it too dependent on the Chief Executive of the Federation. Therefore S.9 of the Act should be amended and members of the Council reconstituted in such a way that makes it independent of both the President and the National Executive Council. It is only this independence that can guarantee that the Privatization and Commercialization Program shall be carried out in a transparent, impartial, selfless, dispassionate and uninfluenced manner.
2.    One of the factors that informed the Privatization and Commercialization of our Public Enterprises was that the management of these companies where inefficient. It is in a bid to solve this problem that S. 5(3) of the Act was enacted. The subsection mandates staffs of the Public Enterprise to be privatized to buy not less than 1% of the shares of the enterprises to be privatized
This provision is inefficient. A commitment to only one percent of the shares is too meager to make the staff handle affairs of the enterprise with seriousness.
Since in most of the privatized companies individual Nigerian investors are allowed to hold 20% of the share and its strategic investors 40%[24] and since both these individual investors and strategic investors form the bulk of the staff, making up to 60% share-holding. I recommend that up to 20% of the shares of the privatized companies be held by staff, as this will make them see the companies as theirs and then put in their best to ensure its efficiency[25].
3.    As established earlier, the Council is the supreme regulation body overseeing the whole Privatization and Commercialization Program.
The Bureau is responsible for the actual implementation of policies of the Council. It will be improper therefore for the Act to give functions of the Council. S. (13)(1)(e) of the Act provides that the Bureau can carry out all activities required for the successful issue of shares and sales of assets of the Public Enterprise to be Privatized and S. 11(h) of the same Act provides that the Council shall approve the prices for shares or assets of the Public Enterprise to be offered for sale.
It occurs to me that the implementation of this similar function given to the two disparate bodies will surely lead to conflict.
The Legislature can avoid this conflict by drawing up the functions of each of the bodies in thematic confinements.
4.    S. 23(1) of the Act which provides that the provisions of the Public Officers’ Protection Act, shall apply in relation to any suit instituted against any officer or employee of the Bureau, is lagging behind in the quest for advancement of our law. It makes caricature of the old internationally accepted doctrine of the rule of law.
I hope that when the legislature finds the opportunity it shall amend it to restore the dignity of the rule of law.
5.    S. 23(3) of the Act provides that an intending litigant who wants to bring an action against the Bureau shall file a notice to that effect to the Director General of the Bureau in the principal office of the Bureau; this provision does not seem to have anything to contribute to the judicial process of dispute settlement. It rather has the unavoidable effect of frustrating litigants and their actions. I do not see any reason why the Bureau should be treated as a sacred cow. If an intending disputant does not succeed in filling this notice to the Director at the said place and within the specified one month, what else does he do? I humbly submit in this respect that if at all there is any need to file such notices, the Bureau should create state or Zonal officers where they should be received.
6.    S. 27(4) of the Act provides that the five members of the arbitration panel to adjudicate on matters between the Council and any enterprise. The law on the appointment of members of an arbitration panel (Tribunal) is that both parties to the dispute appoint arbitrators on equal basis.
I have searched all through the Act in vain to find any justification for this provision.
If the council solely appoints arbitrators in this case, then it has become a judge in its own cause. This is against the Nemo judex in causa sua Rule of Natural Justice and as such needs to be amended[26].
7.    S. 28(3) of the Act provides that the ruling of the arbitral panel shall be binding on the parties and no appeal shall lie from a decision of the panel to any court of law or tribunal, this is against the Audi alteram partem Rule of Natural Justice.
8.    In respect of the privatized enterprises, Government should put in place effective control machinery to monitor and regulate general business conducts in the economy. To achieve an effective control does not necessarily require Government ownership of the business.
9.    Government should endeavor to win over labor’s acceptance of Privatization by giving them ownership of shares in the enterprises. Workers could be allocated a percentage of the shareholding at a special discount price. There is need for good follow up on privatized enterprises, there is need to keep a record of accurate figures on pre- and post- Privatization employment levels including statistics to show whether employment is declining or increasing to calm the fear of labor unions. Other statistics should include how much of capable and qualified labor will be absorbed by the buyers, etc. labor on the other hand must also realize that many of the jobs also might have been cost anyway by retrenchment, since Government could not keep subsidizing crises ridden Public Enterprises indefinitely; the only exercise that could be guaranteed is constant lay off.
10.                       Inclusion of labor is often a good strategy in boosting the Privatization Program because one of the major mistakes that is common in Privatization in Nigerian is taking the workers for granted. When the unions are not involved in the organized process, it may be difficult to gain their corporation.
11.                       Accountability and transparency should be given adequate attention and this can only be achieved where there exists a separate auditing and House of Assembly oversight committee to help in the monitoring process. It is also my considered opinion that money realized from sale of Public Enterprises and those saved through withdrawal of subsidies should be invested in the hinterland for provision of infrastructures.
12.                       There is also the need to make strategic administrative re-engineering to enable BPE staff interact extensively with stakeholders in the exercise especially the staff and consultants of bidding firms.
13.                       On the whole, government should avoid policies that are likely to stymie private initiatives or entrepreneurship.
14.                       Lastly, the Nigerian economy will also require financial market expansion to include derivative future and options, credit and debts swaps etc. several of these foreign investment funds are willing to invest in Nigeria on the condition that the country puts her financial house in order.
However, it is quite instructive to note that successful structural reform cannot be recorded unless:
a.      The Government trusts, respects and most importantly informs the public adequately every step of the way, as to why certain actions are taken.
b.      Privatization is done properly with no special concession, or privileged when selling Public Enterprises and
c.      The creditor countries consider Nigeria’s specific circumstances while mounting pressure on the speed of Privatization exercise because ours is a low-income country characterized by poverty.

1 Abdullahi Ibrahim. The legal framework for Privatization in Nig: modus International law and Business Quarterly. Vol. 6, No. 3, September, 2001 at P.70
[2] Akin Kekere Ekun;
[3] S.14 of the 1988 Decree.
[4] Sections 12 and 13
[5] Section 14
[6] S. 13 of the Public Enterprises (Privatization and Commercialization) Act Cap P. 38 LFN 2004
[7] I. S. 14 of the Public Enterprise (Privatization and Commercialization) Act Cap P.38 LFN 2004
[8] S. 17 (2) of the Act
[9] S. 17 (2) (a) and (b) of the Act
[10] S. 17 (3) of the Act
[11] S. 17 (4) of the Act
[12] S. 17 (5) of the Act
[13] S.23(2) of the Act
[14] S. 25(1) of the Public Enterprises (Privatization and Commercialization) Act Cap P. 38 LFN
[15] S. 27(1) of Act
[16] S. 27(2) of Act
[17] S. 28(1) of Act
[18] S. 28(3) of Act
[19] S. 30 of the Act. No. 28 of 1999 say that the Arbitration and Conciliation Act Applies to Public Enterprises disputed.
[20] (1991) 3 N.W.L.R. (opt.180) 385
[21] Ample statutory and Judicial Authority exist that a party to arbitration can apply to the Court to set aside the award; This is inconsistent with the Act’s provision that no Court can entertain further matters arising from the decision of the arbitral panel. See order 49 Rule 13 0f the High Court of Lagos Rules. SS. 29 & 30 of the Arbitration and Conciliation Act Cap 19, 1990; The United Nigerian Insurance Co. Ltd v. Leandro Stocco (1973) 3 S C 11; Ita v Idiel (1923) 4 NLR, 100,Kmawam & Bros Ltd v. Edilit Ltd (1967) LLR. 23; Nipol v Bioku Investment & Property Co, Ltd (1992) 4 SCNJ 58; Home Development Ltd v SCANCILIA Contracting Co. Ltd (1994) 9 SCNJ 87
[22] S. 11 of the Public Enterprises (Privatization and Commercialization) Act Cap 38 LFN 2004
[23] S. 17 (1) of the Public Enterprises (Privatization and Commercialization) Act Cap 38 LFN 204.
[24]  1st Schedule to the Act.
[25]  S. 27(2)(c) Companies  and Allied matters Act, 1990
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