By way of highlight, the specific
reasons which informed the inefficiency and dissatisfaction in our previous
Public Enterprises regime, which are also what I shall now regard as the
mischief the Act has come to cure are as follows:-
i.
Divorce of
ownership from management: Our Public Enterprises are always managed by people
who are different from the owner. These managers often do not pay maximum
attention to the success of the enterprises because they have little or nothing
at stake. This is perhaps why S. 5(3) of
Act now mandates staff of the Public Enterprises to be privatized to own
not less than 1% of the shares to be offered for sale to Nigerians. According
to the subsection:- “Not less than I
percent of the shares to be offered for sale to Nigerians shall be reserved for
the staff of the Public Enterprise to be privatized and the shares shall be
held in trust by the Public Enterprise for its employees”
According to the
Act,[1]
the percentage of equity share holding offered to the Nigerian Public after
Privatization is 20%. It means that only 1% of 20% of its employees. This I
think is too insignificant to actually challenge the employees to be committed
to the company’s success. This disadvantage has not yet been corrected by the
Act.
One would have
expected the Act to come close to S.251
of the Companies & Allied Matters Act 1990 which allows the Article of
Association of a company to state the share qualification of its directors.
ii.
Excessive
Government Intervention: Experience shows us that instability in government
leads to undue interferences with Government Enterprises. One regime comes
after the other and demands to make radical changes in existing corporations. A
case study is the sitting of the Ajaokuta Steel Industry.
iii.
Ineffective
Funding:
No enterprise, private or public, small or large can function without money.
Most of the time due to dwindling or unstable Government resource, these
enterprises are not efficiently funded. The country is littered with abandoned
projects. This gives rise to need for Commercialization and Privatization.
iv.
Fraud and
Corruption:
If
there is a fraud charge over a Public Enterprise, that enterprise is gone. Its
profit will not be accounted for. Its employees will not be paid. Capital
projects will not be embarked upon, and good and efficient staff will not be
employed. This constitutes a major reason for the Nigerian History of
inefficiency in public enterprises.
v.
Policy
Instability:
Like we pointed out before, political instability is an albatross to Public
Enterprising. Every new Government that comes into power has something new,
good or bad, for the company. Most of these changes affect the fundamentals of
the company. It is not always the best for it.
vi.
Poor Management: If the wrong
person, I mean a person with insufficient skill, technique or experience, is
employed to do a job that requires skill, technique, or experience, obviously
that job must be poorly done. In Nigeria, people are appointed to do some jobs
like managing a company not because they have the requisite skill, technique,
experience or qualification, but simply because they are related or connected
to the authorities. This is one of the problems in our Public Enterprises.
vii.
Lack of
Accountability:
This is a fall-out of corruption and fraud. Most managers of Public Enterprises
only seek money for Public Enterprises only for their pocket and not what to do
to move the company forward.
viii.
Unconducive Work
Environment:
Every employee of an enterprise needs a conducive work environment to put in
his best. If the facility is not available, the work environment will not be
conducive. And this spells doom for the company. These and lots more constitute
reasons why our Public Enterprises have to be privatized and commercialized.
[1]
First schedule part 1 Cap 38,2004