Lagos - President Olusegun Obasanjo says Nigeria`s privatisation programme is not being carried out to please the World Bank and the International Monetary Fund (IMF) but to benefit his country`s economic recovery and social life.
Obasanjo inaugurated the National Council on Privatisation, to be led by Vice-President Alhaji Atiku Abubakar.
Obasanjo explained that privatisation would ensure more service providers would be brought in to compete. This would hence regulate the market for fairer pricing, effectiveness and quick delivery of quality service.
He said the exercise was intended to integrate the national economy into the mainstream of the world economic order. This would ensure the country gained from the technology, managerial competence and capital of the developed world.
Obasanjo said that the critical issues before his administration were how to achieve a well-designed, properly co-ordinated and sequenced, credible and widely accepted privatisation programme.
"We are not about to replace public monopoly with private monopoly. Rather, in our determination to be unyielding and uncompromising in the pursuit of the best interest of this country, we want to remove the financial burden which these enterprises constitute on the public and release resources for the essential functions of government," Obasanjo said.
He disclosed that while successive Nigerian governments had invested up to $80 billion in public-owned enterprises, annual returns on them had been well below 10 percent.
"The declining revenue and escalating demand for effective and affordable social services prompted members of the public to step up yearnings for state-owned enterprises to become more efficient," Obasanjo said.
He traced the problems of public companies to defective capital structure, excessive bureaucratic control, inappropriate technology, gross incompetence and mismanagement, blatant corruption and the crippling complacency which monopoly engenders.
More than a thousand state-owned companies and parastatals performed below average. They included the National Electricity Power Authority (Nepa), which consumers have dubbed "Never Expect Power Always", the Nigeria Telecommunications, the Nigerian Airways and some financial institutions.
Most of the public firms have been earmarked for privatisation for over eight years, but not much has been done on the privatisation programme to date.
At the inauguration Obasanjo announced a list of such companies proposed for privatisation by his administration. He said some of them had cost the nation a whopping 135 billion naira (about R8 billion) in the past few years.
The loss, according to Obasanjo, was a result of unreliable power supply as well as inadequate and inefficient fuel distribution.
Obasanjo noted that the monetary loss did not include the human suffering and deaths caused by fuel shortages.
He said the privatisation exercise would be carried out in three phases, beginning with commercial and merchant banks and cement companies in which government plans to sell its shares.
The companies are quoted on the Nigeria Stock Exchange.
Phase two would affect hotels and motor and vehicle assembly plants. Phase three would include electricity, telecommunications and the petroleum sector, including refineries, and Nigeria Airways.
Obasanjo said the government`s plans first to dispose of equities quoted on the stock exchange, particularly cement companies and banks. This was based on the relative ease with which they could be evaluated.
He said the government would monitor the market`s ability to absorb these equities and encourage core investors to give preference to them. - Independent Foreign Service