OF recent there has been heightened debate on the way forward in Nigeria. This is healthy after many years in the sad and horrible wilderness of failure, poverty and underdevelopment. However I see danger. There is an emerging renewed push for privatization by some elites-people of power and influence in the country. The tactics are familiar- the denouncement of public enterprises and a call for their sale even as those sold in the past had not given much room for cheers.
The renewed move is surprising, dangerous and unhelpful and it needs not have been made again given the disastrous failure of privatization policy in the country so far. But this is Nigeria where records, history, poor performance and evaluation do not matter. One of the results has been the peddling of falsehood as truth by some elites. The state which was created to cater to the security and other welfare needs of citizens is projected as an enemy of society’s life wire-Business.
Given the sad history of privatization policy in Nigeria and the socio- economic reality of the country today the purpose of this article is to argue that privatization is not the way forward and to show why it is not the right way. Consequently the fresh illicit move such as the call for the privatization of the NNPC should be rejected. Nigeria needs a more liberalized atmosphere for both the state and private investor to operate in cooperation for the meaningful development of country for the good of all citizens rather than the benefits of a few elites only. The state must lead the way.
There are more reasons to say No than Yes today to privatization not the least being the lessons of history. The policy failed woefully in the country. Our worry is that most of our ruling elites are impervious to history and driven by ideology they have little or no space for reason. Consequently they see no wrong with policy of privatization in a developing and non-industrialized country such as Nigeria and so peddle misleading doctrine around.
The elites in any society are men of power and influence and thus in position to foist their ideology on the rest of society. They cannot be ignored. Nigeria is not different. A quick reference to three recent prominent Nigerians who have spoken for privatization will make the reason of our concern clear. They include Mallam Nasir El- Rufai- a governor and a former minister, Sam Omatseye- a top Journalist of an influential newspaper and Dr. Mike Umeadi- a professor of business management in the USA. In all, they are men of power and influence and thus great influencers and molders of opinion. They are part of the elites that can move mountains and for ideological reason they have no qualms in pushing a failed policy which harmed the Economy badly in the past.
While the views of these men later let me observe that in democracy public opinion counts and it could break ranks. Thus there is benefit in raising counter ideas with the hope of swaying opinion for the making of good development policy in the country.
In any society the elites are powerful but because of their love of power and public opinion, they are not always united and it gives room for debates and opposition. So these men have a right to advance their cause- privatization and others have the right to say no. But given the reality of Nigeria today and sad history of development, one must wonder how a group could be so impervious and enthusiastic about a terribly failed policy of the past. That can only be the effect of a wrong ideology of development.
Privatization is not new. It has been with us for over thirty years without pleasant news. Why the nostalgia or enthusiasm now? History seems to be stagnant-with no useful lessons learnt. Take for instance the call for the privatization of the NNPC by El Rufai and you wonder whether our leaders ever review their notes on development policy. We shall return to this later. For now let’s explore more reasons why we should reject privatization policy today.
Factors Against Privatization Policy.
There are many factors against privatization policy but only few will be discussed here. First is the history of failure associated with the policy of privatization. Basically it did not add much value to the quality of life of many Nigerians. Rather it took away the job of many, the source of livelihood for many, dispossessed and closed opportunity for citizenry participation. It was a source of frustration to many youth. In short it worsened the poverty and unemployment situation of the country thereby alienating the people from the government.
Privatization was largely unsuitable approach. Nigeria is a rich but poor country with very infantile institutions, weak financial muscle and low capitalist cultural values such as TRUST. Truly privatization was not about the real development of the country but mere ideological show and excuse for greedy acquisition or sharing the nation’s wealth among a few elites. Now is the time to do less of ideology and to be less greedy and selfish. It is time for real development of the country.
Related here is the generic purpose of the state which is the promotion of the security and welfare of citizens and protection of their property. It is needless to say that the country is in bad shape made so by wrong policies such as privatization.
In the face of large scale unemployment, mass poverty and obscene infrastructural deficiency privatization was a misnomer- a highly irrational measure. For me the main problem or weakness of privatization is its unsuitability to the Nigerian situation. It effectively excludes the state- the greatest source of strength of development from the scene and this largely explains the sad state of affairs of our country today. The state has been sent on a long recess in Nigeria.
It is an irrational approach. According to proponents of privatization, reason which informs the establishment of public enterprises is inferior to unreason of the unseen hands of the market in the distribution of resources. Thus privatization is said to be the answer to national development. Here the state is seen as the problem, a dullard which cannot do business or has no business doing business in the first place. In their scheme rationality and empirical evidence have no place, only myths and ideology count. But by so doing we sent the best player – the state out of the game of development.
It is a roguish official way of concentrating wealth on few hands, deepening inequality and robbing Paul- the poor masses to pay Peter- the few rich. It is therefore inherently corrupt. It promotes exclusive tendencies. It is a policy of dispossession, alienation and impoverishment of the masses.
It is based on wrong assumptions- that the state cannot run business and the buyers would do better. The latter has proved to be untrue in Nigeria where many of the privatized companies have failed to meet expectation e.g. PHNC, NITEL. There is a great flaw in the view that the state cannot do business. It lacks historical support. There are successful public enterprises across the globe as there are in the private sector. And success depends on the management skills, ability, and sincerity of those in charge.
It is really wrong to say that the state cannot do business successfully. The truth is that depending on what is in view, the state can do and has done successful business all over the world. There is a symbiotic relationship between the private and public sectors and each has its own share of failed and successful businesses. Let it be emphasized that both can work in cooperation for the good of society.
A truism is that the market is good but it cannot be depended on alone to solve the country’s problems because of its obvious inadequacies. For instance the market is mainly concerned with areas of profit but nation building goes beyond this to areas of collective well- being. For instance, there are some difficult areas and capital intensive ventures that are good business but which the private sector may not have the capacity for -thereby warranting state investment.
Otherwise how would the village farmers say in Uromi in Edo State or Yahe in Cross Rivers state get real value for their produce without access to urban markets? How do we reduce rural unemployment, promote export, manufacturing, and plant infrastructure for the collective good of society? My extensive tour of country as a staff of the NYSC convinces of the limitation of the private sector and the imperative of state intervention in economic activities as a better way to move the country forward.
For example Yahe area in the S E zone of Nigeria is rich in agricultural produce and need some industrial push. But the terrains are tough and extremely difficult and thus may not be attractive to the average Nigerian investor even though profitable to do so. Such calls for state intervention including the setting up of industries and marketing Boards.
History and objective evaluation of our development efforts disfavor privatization today. Since the 1980s when General Babangida introduced SAP Nigeria has been on this route but all she got was deeper level of poverty, underdevelopment, large scale unemployment and few rich people. It was of no good use and there is nothing in the horizon to suggest a change for the better now. Also as could be gleaned from chapter11 of the Constitution of the country, privatization is an anathema of sort. The state is expected to lead the show.
Against this background, the way forward is not privatization but deliberate strong partnership between the public and the private sector but with the state leading. The country is large and fertile enough for both to burrow for our collective good. And each side has much to give to the cause of national development.
Basically business is about making profits and as hinted earlier, there are many areas in the country that require business activity but for which the private investor may be reluctant or unwilling or unable to venture even if profitable. The state must move in to fill necessary gap. In other words a strong case against privatization is the nature of the uneven development of the country especially its vast poverty and large scale unemployment.
A more meaningful way forward must learn from history and so do less of conventional ideology but more of creative thinking and pragmatism in the national interest. It must allow reason to reign in order to strike a balance for what works for Nigeria. For me it is improper and unhelpful to deny the state from economic activity or to ban the private investor from doing certain business by law. There should be no room for any form of monopoly- state or private. While the state operates, all structures must be removed to allow individuals willing and able to do business to the zenith of their ability. The space should be liberalized to accommodate both the state and private investors in order to allow more business to germinate, grow and flourish for the good of all in society History teaches that monopoly is bad in either the hands of the state or private investor. It also teaches that there are business failure and success in both sectors of the economy. Also corruption and poor leadership and management skills are enemies of any business and one of the effective ways out of organizational trouble is to improve skills for leadership and management for optimal performance, check and punish corruption. This underscores the importance of effective consequence management.
The mythical allure of the market rehearsed-why privatization today?
Properly understood the push for privatization is not about national development but about the advance of market ideology per se. Its exponents merely rehearse the age long myths and allure of the market even without proof. It is a way of life for them. The problem is that ideology like religion is averse to reason and that may explain the doggedness of the proponents of privatization today.
The modern origin of privatization was not rooted in desire to promote development for all but to weaken the state by selling its asset to enrich a select few- the rich. It emerged as a conservative tool to fight labour party in Britain and a Republican weapon against the Democratic Party in the USA. In short both Margaret Thatcher of Britain and Ronald Reagan were arch capitalist in politics and they saw and used privatization as a political and ideological strategy to advance the capitalist ideology by check mating the state. Their common mantra was roll back the state.
The trouble though is that what was designed as a domestic tool against a rival party and to rubbish opponents in a local contest for power has since been elevated to the status of a global strategy of development for all countries no matter the differences in the prevalent condition of the state concerned- thanks to western press and global financial institutions such as the IMF. If the idea of minimum government makes sense in the USA or the UK today after many years of big government and heavy participation in economic and other aspects of nation building, it does not in Nigeria where it is ‘yet morn on creation day’.
It is against this historical and ideological background that one can appreciate El- Rufai and others still pushing for privatization today in spite of its dismal failure in the country. They do so not because of its relevance or evident gains, but because it has been applied and endorsed by the west. They have adopted it as way of life. Otherwise how do we understand the rationale for the call for privatization by the Nigerian elites today after many years of woes with it?
It would be helpful to recall that Governor El Rufai- a former minister, a key exponent of the heavily failed privatization policy of the Obasanjo administration and today a top member of the APC in a public lecture resumed his privatization mission by calling for the ‘ killing of the NNPC before it kills the country’, dispensing with the idea of public ownership and dealing with corruption.
While I wondered whether it was Margaret Thatcher the mother of privatization in England was on stage in Abuja, he left none in doubt that all he cared for was the privatization of any public enterprise and the caging of the state. He lacks faith in public enterprises but unfortunately the privatization he helped to entrench has been an embarrassing failure that brought untold misery to many Nigerians through avoidable loss of jobs thereby deepening unemployment and hardship. Where are NITEL,VON, DURBAR HOTEL? To mention a few of a long list of failed privatized companies in Nigeria? He feels no guilt. All he cares is just to roll back the state for no just cause.
By now Governor el Rufai ought to know and admit that privatization has been a huge failure and is part of the problems to be solved today and so can not be a solution or the right way forward. As a Governor he needs to be guided by the Constitution and to revise his notes on the appropriate ideology of development for a non-industrialized country such as Nigeria.
As a minister he proved an effective manager of the mechanistic caste who gets things done no matter how difficult. Now as Governor he needs to develop a broader view of life, more appropriate, humanistic philosophy of development for the benefits of all citizens and not just a few rich elites.
He seems to belong to the shock therapy school of thought where the rash actions of leaders normally sap the energy and creativity of citizens through policy of exclusion such as privatization which alienates majority people and denies their active participation in the development process. It is a sad road once travelled and there is nothing yet to show a change or sigh of hope.
Still he was correct in one aspect: corruption. NNPC oozes. It is today a huge disappointment as haven of corruption and mismanagement. It has been corrupt and poorly managed over time. However, the solution is not in privatization but in changing the management and management style, punishing those who defaulted and training or engaging new hands to perform to expectation. Corruption has been the major problem of NNPC and it has persisted because of weak consequence management system. Let us kill corruption not only in the NNPC but all over the country.
One of the serious problems of doing business in Nigeria has been legal constraint. Reports say there are many strictures and man made difficulties. These must be removed or simplified to allow easy and free access to the market. The Business space must be liberalized to allow all those who have the means to do oil and other businesses unhindered.
This is why I am not comfortable with the way we treat the phenomenon of illegal refinery today. Though those involved are law breakers, yet they send important message to the effect of the existence of cheap methods of refining oil. Yes arrest them but not only for punishment but also for debriefing for useful lessons. There is the need to identify and improve the simple technology which they use for mass production. It may just be the beginning of a revolution in petroleum production in the country.
The allure of the market is not about to abate within the Nigerian elites. Privatization is sales point and failed public enterprise an excuse or justification for an irrational approach to national development. All these were clear in the Nation of 20th July2015in which Sam Omatseye – a fine writer, top journalist with an influential newspaper, a DAME prize winner ‘for informed commentary’ and one who had studied in Canada and worked long in the USA- the exponent in chief of the market economy made a hard kick against the return of the Nigeria Airways.
More specifically, he does not want state involvement in the National Carrier business for it would mean ‘death in the sky’ and ‘nightmare coming back’. To him the ‘ Nigeria Airways was a failure and sad reminder of how a government can ruin a great project’. While there are many failed newspapers without anyone calling for the end of newspaper’s business, he adds: ‘ we have never done it right in this country. This is the age of enterprise and competition’ and what was needed is an ‘enabling environment for the carriers to operate’. In the typical market style the state is restricted to creating an enabling environment or regulatory role but not doing business.