FG Spent N13tn to Set up 590 Dysfunctional Enterprises in 23 Years

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  • FG Spent N13tn to Set up 590 Dysfunctional Enterprises in 23 Years

Between 1975 and 1998, a period of 23 years, the federal government spent N13 trillion to set up 590 public enterprises that hardly returned any reasonable profits or service gratification to it or Nigerians, the Bureau of Public Enterprises (BPE) has disclosed.

According to the BPE, these publicly-owned enterprises also employed a paltry 420,000 Nigerians out of the country’s population of 120 million people at the time, in addition to absorbing more than half of the monies the country earned from its sale of crude oil as well as accounting for over half of the debt Nigeria owed international lenders.

Speaking at a forum organised by Business Editors in Abeokuta, Ogun State, BPE’s Director of Development Institutions and Natural Resources Department, Mr. Joe Anichebe, in a paper titled: “Managing the Media in Nigeria’s Privatisation Programme,” explained that publicly-owned enterprises in Nigeria have grossly failed to live up to expectations.

Anichebe, gave reasons why the government chose to initiate its privatisation policy, and subsequently began to privatise its enterprises.

According to him, this was influenced by the global shift in macroeconomic policy that favored the transfer of state ownership of enterprises to private sector as witnessed in the Great Britain and then Union of Soviet Socialist Republics (USSR).

He said the decision was made rather too persuasive because those enterprises failed abysmally.

“We all know the truth, but let me restate it: our country’s publicly-owned enterprises have been – on the whole – grossly inefficient, corrupt, and wasteful. We have all witnessed with embarrassment, if not consternation, the crass incompetence and mismanagement, blatant corruption and crippling complacency of our public enterprises.

“Between 1975 and 1998, government spent about N13 trillion to set up and maintain about 590 public enterprises. Of these, 160 were in the business of selling goods or services – in other words, they were designed to make profit. The profit turned out to be tiny: about a half of one per cent.

“And all these government funds were tied up in businesses that supported just 420,000 employees – out of a population of then about 120 million. They had absorbed over half of the money that Nigeria earned from its huge oil sales in the early 1970s. And they also accounted for over half of the money Nigeria owed as international debt,” said Anichebe.

He noted that the real price the country paid for the poor performance of the state enterprises were not measured in the monetary values they failed to turn in, but in terms of the services that Nigerian citizens never received and the investments that never took place.

“These were denied to Nigerian citizens because the money that could have paid for them was swallowed up by our state enterprises,” he added.

Anichebe, stated that most Nigerians were divided over the necessity for privatisation, but that the candalous pillage, waste, decay and inefficiency of public enterprises strengthen the argument of those clamouring for privatisation.

He listed the performance of some privatised government enterprises such as the cement companies, oil marketing firms, banks and the petrochemical company in Eleme as some of the success stories of privatisation but added that there were exceptional cases of failed privatised
entities.

Further, Anichebe, noted that the BPE had developed a post privatisation monitoring process to track the progress of entities privatised by the government. Through this means, he said the agency would be able to drive up the gains of privatisation.

He equally disclosed that the government has submitted about seven bills to the national assembly which would when passed into law, support its privatisation programme.

“But then, whatever is the argument for or against, the underlying factor for the programme speaks to the purpose of government: governance and not business. At best, government can only provide the enabler for business in way of policies, regulations, infrastructures, and sometimes funds intervention in critical sectors that threatens overall economic growth of a nation. Government has no business in business.

“This administration is also determined to fast-track the process of getting all the sector reform bills presented to the National Assembly for passage to anchor all our transactions on law. Some of the bills which have already been presented to the National Assembly for passage are Federal Competition Commission Bill; National Transport Commission Bill; Ports and Harbour Authorities Bill; Nigeria Railway Bill; Inland Waterways Bill; Federal Roads Authority Bill; National Roads Fund Bill,” he added.

About the Author

Samed Olukoya
Samed Olukoya is the CEO/Founder of investorsking.com, a digital business media, with over 10 years experience as a foreign exchange research analyst and trader.

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