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%[1] 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[2].
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[3].
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]  1st Schedule to the Act.
[2]  S. 27(2)(c) Companies  and Allied matters Act, 1990
[3] S. 27(2) © Companies And Allied matters Act, 1990
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