By Peter Osalor
In the first five years of this decade, 37 countries in Sub-Saharan Africa together raised more than $11 billion through privatisation programmes. Although the bulk of this corpus was raised in low-value transactions in competitive sectors, the figure puts the region next only to Europe and Latin America in global privatisation trends .

While Africa, Ghana and Zambia were among the top contributors, Nigeria takes the undisputed lead. Africa’s second largest economy contributed more than 70% of the $975 million generated between 2004 and 2005, most of it through a single deal involving the disinvestment of a major port operation.

Across Africa, privatisation had become the guiding principle for countries trying to develop dynamic private sectors and expand their economies. Yet, countries continue to face tough challenges in terms of disappointing social indicators, deficient infrastructure and huge productivity shortfalls.

Essentially, the continent’s integration into the global economy had been held back by extreme poverty, especially in the Western regions where it continues to vitiate attempts at sustainable development.

Nigeria has managed to lead the pack in aggressive privatisation in Africa based on the realisation that it is the only relevant and economically viable means towards rapid and inclusive growth. Since the return of civilian rule at the end of the last century, Abuja has also prioritised poverty alleviation based on sound macroeconomic policy interventions.

The thrust of its endeavour has been on curbing state expenditure and involvement in direct economic production, mobilisation of resources and promotion of local and foreign investment. However, given its overwhelming dependence on oil exports and the gross mismanagement that marked successive decades of military rule, Nigeria faces a dizzyingly uphill climb.

While its intention for economic reform has never been in question, Abuja’s track record in handling privatisation deals has been rather chequered. The broad parameters of its initiative drew on past successes elsewhere in the world, from the UK to Russia, and from Europe to the USA and Asia.

Nigeria’s formal introduction with the concept came about with the Privatisation and Commercialisation Decree of 1988, an initiative mandated by the IMF-funded Structural Adjustment Programme. In 1999, the Bureau of Public Enterprise (BSE) was set up by federal government enactment to prepare and implement the government’s privatisation policies. Embarrassingly, a number of the first privatisation deals ended in fiasco.

The government of former president O Obsanjo sold off two refineries to a private consortium, but the sale was later overturned by the administration of UM Yar’Adua over allegations of wrongdoing. Subsequent efforts to privatise refineries have had to be stalled because of policy loopholes.

Disinvestment of the Nigerian public sector telecom monopoly NITEL ended in disaster when the company suffered huge losses and failed debt obligations, forcing the government to retake control earlier this year.

The now defunct national carrier, Nigerian Airways, likewise failed to take off despite several attempts at commercialisation. Besides indicating ineptitude in policy and implementation, these instances, more importantly, serve to highlight the extensive failure of big business in Nigeria.

In the US, small firms with less then 500 employees account for 99.9% of the country’s 24 million business. SMEs in the European Union together provide 65 million jobs or two-thirds of all employment, while 90% of all Latin American businesses are micro-enterprises. Nearer home in Kenya, 2003 figures reveal SMEs contributed 18% of national GDP.

Considering global trends in the last several decades, the arguments in favour of SMEs over large enterprises are simply overwhelming. Rapid enterprise development in an atmosphere conducive to private sector growth is the only way Nigeria can hope to achieve it MDG commitments or its indigenous Vision 2020 goals.

Today, we are witness to sweeping changes that are taking place in the economies of both developed and developing countries. These changes relate to efforts to move away from government ownership, control or participation in the economy towards free enterprise and increased operation of market forces.

On the whole, the changes are making for a reduction in the role of government in the economy, with a corresponding expansion in private sector ownership, control and participation.

We are thus observers of the evolution of a New World Economic Order which is characterised by the liberalisation or deregulation of economic activities, with the aim of achieving efficiency and effectiveness in resource allocation and utilisation.