Senate Committee Chairman, Orji Uzor Kalu Moves to Sanitize and Reform Public Enterprise Privatization

August 31, 2023 9News Nigeria Breaking News, Business, Hot News, Investigative Reports, Latest News, National, National Assembly, Nigerian economy, Politics 0

The chairman Senate Committee on Privatization, Senator Orji Uzor Kalu has unveiled the committee’s agenda to sanitize and restructure the Nigerian Privatization Scheme for the public interest.

Senator Orji Uzor Kalu in a press release made available to 9News Nigeria lamented that the previous privatization of public enterprises had a trajectory of flaws and was devoid of transparency and accountability.

The scheme, therefore, has not yielded the desired dividends for which it was established under the Privatization and Commercialization Act of 1999.

He cited that bureaucratic corruption in the public service and lack of due process adherence played significant roles, making the exercise a flaw since the Privatization and Commercialization Act was promulgated in 1999 to date.

Senator Orji Uzor Kalu further revealed that the new Senate Committee will be embarking on an investigation exercise that could elicit and normalise every wrong process and procedure that was not done through transparent due process.

The press release stated that the issue of bureaucracy, nepotism and corruption has been a major challenge confronting the privatisation scheme in meeting its intended objectives since its inception till date. Therefore, it has become imperative that the 10th Senate Committee on Privatization takes some drastic and critical steps to correct the anomalies for the public interest. The committee’s agenda shall include:

1. That, whereas the introduction of privatization policy as encapsulated in the Privatization and Commercialization Act No. 38 of 1999 has not been duly adhered to; Not all private companies who bought public enterprises met their financial obligations to the government due to non or poor adherence to due process. As such, these privatized public entities were sold to cronies of public officials and other vested interests at ridiculous values.
2. To this end, the Senate Committee on Privatization shall commence a comprehensive investigation of the commercialized government enterprises (and also yet-to-be privatized public enterprises).
3. The committee is expected through its findings to re-access the terms and conditions for the privatization of public entities in line with the Privatization and Commercialization Act of 1999. The re-assessment shall be deemed to ensure the government gets competitive value from the commercialized business enterprises. The re-assessment will further enhance the eradication of sharp practices including corruption, administrative bottlenecks and leakages in the process of privatization of public entities.
4. The exercise will among other objectives ensure that the process of privatization will give a level playing ground for interested local private organizations and encourage Foreign Direct Investment (FDI).
5. The investigation will look at privatized companies from 1999 till date including Power Holding Company of Nigeria, Eleme Petrochemical, West Africa Refinery Company and others.

Senator Orji Uzor Kalu was appointed as the National Assembly chairman of the 10th Senate Committee on Privatization on 7th August 2023.

The 10th Senate Committee on Privatization tasks and mandate include:

1. Scrutinize and monitor the operations of more than 70 entities that have already been privatized and those scheduled for privatization in the country.
2. Explore the challenges that have hitherto hindered the performance and progress of most Federal Government Enterprises and make progressive recommendations.
3. Monitor the activities of the Federally Owned Companies as well as the functions of the Bureau of Public Enterprises as established under the provisions of the Public Enterprises (Privatisation and Commercialisation) Act of 1999.
4. Engage with key stakeholders and players in the private sector to ensure the fulfilment of the objectives outlined in the 1999 Act of Public Enterprises (Privatization and Commercialization).
5. Conduct a comprehensive review of already privatized entities, aiming to achieve goals such as combating corruption, rectifying inefficiencies in state-owned enterprises, and attracting foreign direct investment in order to forestall systemic malpractices and corruption.

Privatization in Nigeria actually began between 1986-7 when the FGN liquidated several agricultural commodity boards and various units of the Nigerian Livestock Production Company. However, the programme was not fully entrenched until the establishment of the Technical Committee on Privatization and Commercialization (TCPC) and the promulgation of the Public Enterprises Privatization and Commercialization Decree No. 25 of 1988.

The government of the Federal Republic of Nigeria had embarked on the privatization of the public sector scheme. An exercise that transfers productive operations, assets and other economic rights from the public sector to the private sector in order to break the critical jinx of impunity in the government bureaus, and enhance efficiency and productivity.

This was a result of the non-performance of public enterprises that were earlier established to consolidate political independence and maintain control over national resources and foreign enterprises which tended to be monopolized.

According to a report by Abdulkadir in 2011, public enterprises in Nigeria were used to help, protect both bureaucratic and political leaders to expand, protect their position and implement their policies.

Abdulkadir made instance that before privatization, the total investment in the public enterprises sectors was well above US$35 billion involving US$12.5 billion in equity, US$10.2 billion in government loans, and US$11.5 billion in unspecified and unrecorded subventions in several enterprises. Collectively, the investments yielded a meagre return of US$1.5 billion in dividends and loan payments from 1980 to 1987.

Hitherto, the scheme has not yielded its intended dividend, but with the current agenda of this 10th Senate Committee on Privation led by Senator Orji Uzor Kalu, Nigerian citizens may start to see the reformative checks and balances required for accountability, transparency and productivity, economic growth both in the private and public sector.

Report by Obinna Ejianya (9News Nigeria – Melbourne, Australia)

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