It is fair to say that most Nigerians do not have a lot of confidence in their government or the direction of their country. Successive military and civilian administrations have come and gone, each promised heaven and earth to Nigerians but those lofty promises have gone unfulfilled. Nigerian elites are experts in drafting all manners of constitution from parliamentary system to presidential system. The problem with these exercises is that constitutional provisions are as good as the people who implements them. In other words, the best constitution in the world will not positively affect the life of Nigerians if various provisions of that constitution are carried out by flawed individuals. I am not insinuating that all Nigerians are flawed but the ones that have been managing the affairs of the country since Nigeria independence have not distinguished themselves as patriots who have the best interest of Nigerians at heart.
Successive administrations have doubled down on failed centralized, socialist economic policies that have resulted in unimaginable poverty despite Nigeria’s abundant natural resources. After independence in 1960, successive administrations established major corporations and industries in banking, textile, agriculture, petrochemical, steel and refineries in various parts of the country. Today, few if any of these government enterprises are operational. They have either gone bankrupt due to neglect or rendered useless due to corruption, a constant menace in all aspect of Nigeria life. The result is that Nigerians are worst off today than they were 25 years ago. Nigeria was almost self sufficient in food production shortly after independence but today most food products are imported. About 85 percent of Nigeria problems today is man-made.
The question for Nigeria now is which model should Nigeria follow? What is the best part forward? I think Nigeria government at all levels need a radical change in their economic policies. Federal, state and local governments need to abandon centralized socialist economic oriented policies. Privatization of all government holdings in all sphere of our economy is the best part forward. Some previous administrations started privatization but pursed them half-heartedly. Former president, Olusegun Obasanjo during his civilian administration started privatization of major government owned companies in a massive scale. He privatized government owned hotels, Port Harcourt and Kaduna refineries and Nigeria telecommunication giant, NITEL.
However, Obasanjo’s privatization exercise was not transparent and was poorly carried out. Most of the privatized industries went to political cronies which outraged Nigerians resulting in subsequent loss of confidence in the exercise. NITEL was purchased by Transnational Corporation of Nigeria headed by the then director general of Nigerian Stock Exchange, Ndidi Okereke-Onyiuke. President Obasanjo had interest in Transnational Corporation to the extend that he either purchased or was given some shares which he later sold. The refineries was purchased by oil magnate, Chief Femi Otedola and Industrialist Alhaji Aliko Dangote.
Privatization of these companies was a good idea but the exercise should have been transparent and devoid of corruption or any appearance of impropriety. It should have been thrown open to all Nigerians and foreigners to ensure integrity of the process. Another reason why it is very important to throw the process open to the public is that government owned companies slated for privatization are usually in bad shape and will require substantial capital infusion by new owners at the beginning in-order to turn them around before they can start generating profit. If political cronies are allowed to purchase these companies, they are unlikely to be in the position to garner or source sufficient capital required to revitalize the companies. Typical example is NITEL, which failed because owners of Transnational Corp could not generate the capital required to turnaround the company. NITEL needed capital infusion of billions of dollars to bring the company up to standard. Owners of Transnational Corp thought they were buying Nigeria jewel. They did not conduct adequate due diligence of the company they were acquiring. If they did, they would have realized that most NITEL underground cables are rotten and needed replacement which will cost billions of dollars. When privatized corporation is sold to dishonest cronies, they will strip remaining asset of value left in the dying corporation and liquidate whatever is left. We saw similar activity in Russia.
Then came late president Umaru Yar’Adua who compounded the situation by renationalizing NITEL, steel corporations and two oil refineries. He promised that the refineries will be back in full operation within six months which never materialized to date.
Nigeria need to privatize all government owned public companies or corporations in a transparent manner. Free private enterprise is the way to go. Government controlled socialized means of production does not work. We have seen the result in socialist countries where productivity was little or nonexistent. Free private enterprises are the engine of economic growth. It is what made United States the most productive economy in the world. Yes, it is true that free enterprise is based largely on greed. When late Steve Jobs of Apple computer or Bill Gate of Microsoft started their computer businesses, they were not angels trying to help the masses, rather they saw their start-up companies as opportunity to make lots of money for themselves. The result is that in the process of trying to better themselves, they inadvently made a lot of people who bought their stocks wealthy and employed a lot of families who depends on their corporations for their livelihood.
In Nigeria today, the most successful sectors of the economy is telecommunications and banking. What the two sectors have in common is that they are fully deregulated and wholly privatized by the federal government. Most Nigerians today have access to cell phone services, thanks to the genius of free enterprise. Access to telephone by ordinary Nigerians within a decade was a fit Nigeria government could not achieve since independence. All Nigerians are better off for it. The same fit could be achieved by Nigerians if the rest of the public sectors are deregulated and privatized by the federal, state and local governments.
The good news is that Nigerians are beginning to take control of their destiny. A Nigerian, Mr. Innocent Chuwuma established auto manufacturing company in Nnewi, Anambra state named Innoson Vehicle Manufacturing Company. He manufactures vehicles, motorcycle parts and host of petrochemical products, an achievement that has eluded Nigeria government for decades. Alhaji Dangote is doing his part in sugar, cement and host of other products. Orient Petroleum Resources, first wholly privately owned refinery capable of producing 55,000 barrels of oil per day was commissioned by president Goodluck Jonathan on August 30, 2012 in Anambra state. A number of privately owned power plants are getting ready for operation. Other Nigerians will soon follow suit. When industrialization starts in a country, it quickly multiplies.
It is heartening to know that President Jonathan whom I have criticized numerous times have again started privatization of major government corporations in a massive scale particularly in power sector. Privatization takes years to yield results but it must be carried out in a transparent manner. It appears President Jonathan is going about it in a more transparent manner compared to his predecessors. Successive governments should continue on the same part. Government controlled enterprises are inefficient and prone to corruption. Nigeria post office should be next on the auction block after Power Holding Company of Nigeria (PHCN) privatization. Nigeria Labor Unions should be carried along by reassuring them that privatization will not necessarily lead to permanent loss of their jobs. New owners will likely rehire some of them since they have the experience and expertise. Dependency on oil have pauperized and made Nigerians complacent. Nigerian National Petroleum Corporation (NNPC) should be excluded from full privatization. NNPC is already partially privatized since oil companies explore and refine crude oil then share the proceeds with the federal government according to the terms of their contract. Oil is a natural resource which belongs to all Nigerians. However, the federal government need to find a way to share the oil resources without encouraging dependency. Immediate diversification of the rest of the economy led by the private sector with support from various government agencies should be given top priority by the current and successive administrations.