PRIVATISATION AS THE MAGIC WAND

At the dawn of this century, I got admitted into university, an extremely trusting Nigerian keen on conforming with the societal tradition of earning a job-facilitator in the form of a degree. In the course of that sojourn, I got my first formal exposure to research, writing and publication. A key component of a compulsory General Studies course was a term paper and I ended up being assigned the topic ‘Privatisation’ to write about. Coinciding with the onset of our new democratic experiment, it was only natural that my academic project sought to dissect the policy direction of the then Obasanjo administration. Privatisation had been the rave of the moment, touted as a magic wand capable of propelling Nigeria to developed status at lightning speed. It was against that backdrop that I took up my first role as an undergraduate researcher, producing a paper that was predictable and mediocre. Hamstrung by being unable to access the internet, I had been confined to using the limited reference material at the library, virtually all giving uncritical endorsements of privatisation. I got to read glowing appraisals of the ‘Asian Tigers’, Margaret Thatcher reforms, Pinochet reforms and several other apparently successful efforts at reform through privatisation. In retrospect I consider my undergraduate past unrecognisable because clearly, I completely lacked critical thinking ability. It didn’t cross my mind to search for any arguments against privatisation. Were there countries that recorded failures following privatisation attempts? In the touted successes, what were the costs? Did any dissatisfaction exist in the successful countries and if yes, why? The end result of my efforts met the course requirement. It was an unoriginal endorsement of privatisation in Nigeria.

Fourteen years on, the different administrations in Nigeria have tenaciously held on to the privatisation ideology, suggesting that it is some sort of miraculous cure for the various socioeconomic challenges in the country. Thus, just a few days ago, the outgoing administration approved the privatisation of the Nigerian Railway Corporation. The government official responsible for the process justified the policy in a contradicting manner, describing the railways as ‘loss making’ but ‘socially and economically imperative to the nation’. Will it be appropriate to regard as myopic a government that imagines that it stands to lose from making what it describes as a socioeconomically imperative investment? It is reasonable to expect a patriotic government, being representatives of the entire citizenry, to shoulder the responsibility of providing a service they acknowledge to be critically important to the nation at large. Transferring that responsibility to investors on the hunt for a quick buck in frontier markets comes across as a dereliction of duty especially after taking into consideration the successes recorded so far. It is well known that the existing evidence of local success is visible primarily in the GSM revolution but on scrutiny, even that success falls short of expectations because technically, privatisation of telecommunications was a failure that has led to billions in assets of NITEL being left to lie fallow for more than a decade. Similarly, the outcome of the privatisation of electricity companies has been very unsatisfactory. Though the government urges patience, patiently enduring darkness in a hot and humid country is too bitter a pill to swallow in the 21st century. Faraday discovered electricity in the 1800s!

Self-sufficiency, national security, social justice and preserved sovereignty are key reasons why the most critically important sectors of a nation’s economy are best controlled by interest-defending representatives of the citizens. Fact is, nations are in stiff competition against each other and consequently, foreigners in the shape of private investors are unlikely to have the interests of their host countries at heart. Similarly, the class of wealthy domestic investors able to purchase national assets tends to be materialistic megalomaniacs who amassed wealth after being part of past corrupt governments and are unlikely to be committed to transparently providing services needed by all. Thus, certain responsibilities must be shouldered by true representatives of the entire citizenry. To achieve success at shouldering these burdens, patriotism, determination, capital and skilled labour are key ingredients. Inspiration can be derived from countries that have disproved the myth that suggests state-owned corporations are invariably unsuccessful. In first world France for example, their top rate rail and electricity companies are state-owned. EDF, the state-owned electricity company, is actually the world’s largest producer of electricity. Numerous other examples of successful state-owned companies abound in Germany, Denmark, Norway and other advanced countries. Conversely, a search for failed private establishments reveals several examples. Enron, a now extinct American energy company reputed to be the most innovative at a point, is one good illustration of the fallibility of private enterprise. Thus, Nigeria will do well to avoid subscribing to any dogma. Ultimately, various paths can lead to success. Dr Chukwudebe Olisaemeka, Lagos