By Henry Umoru
ABUJA—THE Senate, yesterday, mandated its Committee on Privatisation to, as a matter of urgency, summon National Council on Privitisation, NCP, and Bureau of Public Enterprises, BPE, to get a comprehensive report of current privatisation status of Federal Government’s public enterprises carried out by them.
This is with a view to ensuring their functionality to reduce the impact of current economic challenges in the country.
According to the Senate, the move became imperative following reports that privatisation of public enterprises has been bedevilled by various administrative, regulatory and financial irregularities.
The upper chamber, therefore, mandated its Committee on Privatisation to interface with NCP and BPE in conducting a public hearing to determine the public enterprises privatised/commercialised, current status of privatised enterprises, extent of due process in the conduct of the exercise, enterprises whose privatisation where reversed by the Federal Government.
The resolutions of the Senate were sequel to a motion by Senator Umaru Kurfi, (APC, Katsina Central), co-sponsored by six other and entitled, “The need to review the privatisation of public enterprises in Nigeria.”
The Senate also urged the committee to scrutinise the extent of compliance with the post privatisation conditions by core investors, and the impact of privatisation/commercialisation of public enterprises on the nation’s economy.
Earlier in his presentation, Senator Kurfi said that “The Senate: Notes that privatization of public enterprises is a bye product of global economic recession in the 80s where Nigeria and other African countries where advised by the Bretton Woods Institutions (International Monetary Fund, (IMF) and the Word Bank, (WB)) to divest from their public enterprises as one of the conditions for economic assistance;
“Further notes that privatization was institutionalized as a viable economic reform policy that would help cut the inefficiencies of the public sector, provide greater scope to the private sector, attract more investments, and also revive the failing economy;
“Recalls that as far back as 1981, the Gamaliel Onosode led Presidential Commission on Parastatals has revealed that the problems confronting public enterprises in Nigeria include: defective capital structures resulting in heavy reliance on the national treasury for financial operations; mismanagement of funds for operations; corruption; misuse of monopoly powers; and bureaucratic bottlenecks characterized with appointment of management team based on political interference in the management of public enterprises;
“Cognizance that in response to the increasing challenge of public sector failure in managing public enterprises, the Federal Government promulgated the Privatization and Commercialization Decree of 1988 which established the Technical Committee on Privatization and Commercialization (TCPC) which was repealed by the 1993 Decree that established the Bureau of Public Enterprises as replacement of the TCRC and the 1999 Act repealed the 1993 Degree and further recreated the BPE in addition to the National Council on Privatization as the main organs of the programme;
“Aware that through Initial Public Offer, Sale by Competitive Bid, and Sale through Direct Negotiation to core investors, the Federal Government had, between 1989 and 1993 privatized 111 public enterprises and commercialized 35 others with 67 in the first category comprising hotels, breweries, insurance companies and other similar light industries;
“Further aware that the second category consist of 43 enterprises including oil marketing companies, the still rolling mills, Nigeria Airways, Fertilizer Companies, the Paper Mills, Sugar and Cement Companies; the third category consisted of 11 Parastatals, including the Nigerian National Petroleum Corporation (NNPC), the Nigerian Telecommunication Plc. (NITEL), and National Electric Power Authority (NEPA), later transformed to Power Holding Company of Nigeria (PHCN) while the last category consisted of 14 other Parastatals including the Nigerian Railways, the Delta and Ajaokuta Steel Rolling Mills;
In his contribution, the Senate Leader, Senate Ahmad Lawan who lamented that due process was truncated during the privatization while the interest of co investors was not respected, therefore called for comprehensive investigation of the exercise with a view to knowing the agreement and conditions upon which the privatization was consummated and also the amount realized from the sales of the companies.
He particularly advised the Committee on Privatisation to engage the NCP and BPE to review the report on the matter from 2011 till date for a thorough job.
In his remarks, Senate President Bukola Saraki said that the exercise has become necessary so as to stimulate economic growth and welfare of the people, as well as making reducing the rate of unemployment in the country.