“Privatization”, of necessity, assumes that any of the enterprises to be sold can be allowed to collapse without serious consequences to the country economically, militarily and politically. Such an assumption – that any of these enterprises can be allowed to collapse and liquidate –is patently wrong and needs no refuting. It refutes itself. This being so, the proposal that these enterprises should be “privatized” has two very dangerous implications. These are: (i) Either, in spite of their being vital to the country economically, militarily and politically, the FGN should sell them into private hands where, among other possibilities, they could collapse, or (ii) that even while handing them, dirty cheap, to private profit-seekers, the FGN should hold itself ready to salvage them with the infusion of public money in the very probable event of their being poorly managed to the point of having to liquidate. Either of these two implications of “privatization” is highly objectionable to the nation and its vital economics, military and political interests. And for those who currently hold them in trust for the people, the two proposals should be objectionable on grounds of honour also”
Intervention has once published this longish essay. It is publishing it again following the crash at last of the privatisation exercise by successive governments in Nigeria since 1986. The crash of that strategy is what the Federal Government’s so-called restructuring of Kano, Kaduna and Benin DisCos, (and Yola, Ibadan and Abuja previously) can only be understood to mean.
But it is exactly the sort of situation powerfully predicted in the above quotation in a 1984 memo to the same Muhammadu Buhari by the author, the now late Dr Mahmud Modibbo Tukur who was the National President of the Academic Staff Union of Universities, (ASUU) then. It is now 38 years old but it reads as if written just yesterday.
It is too powerful a memo to be edited further without injuring the message it conveys to Nigeria and Nigerians. It may be long but too important for all Nigerians to be worth their reading, over and over again:
What is published here has been extracted from the book, The Essential Mahmud Tukur: A Selection of His Writings, edited by Professor Tanimu Abubakar and published by the Ahmadu Bello University Press, Zaria and where the original memo is 10, 282 words as against the 8000 plus it is here. Read on!
ASUU NATIONAL SECRETARIAT
Through: The Secretary to the Federal Military Government and Head of
Service, Tafawa Balewa Square, Lagos.
To: The Head of State and Commander-in-Chief of the Nigerian Armed Forces, Major General Muhammad Buhari, Dodan Barracks, Lagos.
Participation in the Study Group on Public Utilities (Problems of Commercialization, Profitability, Efficiency)
With reference to my appointment by you to serve on the above Study Group, an appointment of which I was informed by Cabinet Office letter Number SFMG. 43/207 of 26th September, 1984, this is to inform you that in spite of the fact that the group had already started its sittings by the time I was informed of my appointment onto it, I did join it; I did attend almost all its subsequent sittings; and I did contribute ideas in accordance with my convictions. I would also like to inform you that the exercise has been very educative to me both in terms of the raw data on the utilities that I had to examine, and in terms of learning firsthand about the working of the country’s economy from such seasoned veterans of the Nigerian system as the former Governor of the Central Bank, Mr. Ola Vincent and the current Managing Director of the Bank of the North, Alhaji Ali Al-Hakeem, the former of whom was a very alert and helpful member of the study Group, and the latter its indefatigable Chairman. Also as far as etiquette was concerned, I would like to say that the study Group did its work in an atmosphere devoid of rancor and discourtesy towards one another; and, whatever the others may think of me, I must say that I came away with high regards for their talent and capacity for hard work. Once more, this is especially so as regards the Chairman and Mr. Ola Vincent. At the personal level, I have no regrets at all for having worked with them and the other members of the group; and whatever I may subsequently say in this letter is not intended to reflect upon the integrity of any of them.
My major complaints is that my views, where these fundamentally differ from those of the others, are not reflected in any way and under whatever heading in the document that was handed to you on 28th November 1984. Hence, my decision neither to sign the letter which accompanied the report and in which the recommendations contained in the report are re-endorsed nor to go with other members of the study Group, to present the report to you. Hence also, I am writing this letter, to give you and the Federal Military Government the benefit of my views on some of the recommendations contained in that report. In writing this letter, I am assuming that we were each appointed on the study Group on our individual merits, not because it was believed that the eight of us shared common views but, I believe, precisely because it was assumed there could be fundamental differences before us and because the Federal Military Government wanted to know as many as the pros and cons of the recommendations that might be made to it.
It is for this reason that it becomes my duty to put across to the government my views on some of the recommendations contained in the report, views which I gave expression to during the deliberations of the Study Group, which were left out of the report, which report but for the indefensible omission, would have been the only document to be addressed to you.
I, therefore, go on to state that I was party to and do agree with most of the recommendations of the report but that I categorically and most emphatically reject the “privatisation” it recommends – a recommendation which, when shorn of all cant and sophistry, is an attempt to enable a tiny segment of the Nigerian population misappropriate assets that have been built up with public funds and which have up to now been owned by the whole population viz:
The Nigerian Airways:
The Nigerian National Shipping Line:
The Nigerian External Telecommunications: and
Much of the Nigerian Ports Authority’s facilities and rights.
Sir, here are some of the grounds for my rejecting the “privatisation” of these or any of the other public utilities:
(1) Either these enterprises are actually/potentially profitable or they are not: if they are profitable, it would be foolish and irresponsible for the FGN to part with them. If they are not profitable, there will be no buyers unless, in the first place, the FGN sinks more money to make them profitable before selling them at giveaway prices. That would be all the more foolish and the more irresponsible for the FGN to do, apart from it being profoundly unethical, business and ethical issues which, alas, my colleagues seem to have decided to brush aside, brave gentlemen that they are.
(2). As can be seen from the report itself, all these ventures can be made profitable within the context of government ownership and should, therefore, be so made within the context of that ownership. In this regard I would like to emphasize, and in so doing, I do not fear being contradicted by any other member of the study Group, that the recommendations which we, together, made on the assumption that they were each going to remain Government property and not on the assumptions that they had to be ‘privatized’ before the adjustments could be made. This is why among the recommendations we made with respect to every single one of them are (i) that government should appoint competent and reliable people to the board of directors; (ii) that Government should appoint knowledgeable people to the management and (iii) that, on the one hand, Government should refrain from unnecessary interference in the work of boards and managements and, on the other hand, board chairmen should avoid interfering in the day-to- day management of the ventures. Indeed, the report even go as far as suggesting the institutions from which government should select board members as well as specifying amounts that managements could spend without reference to boards, amount which boards could spend without reference to supervisory ministries, amounts which supervisory ministries could authorize to be spent without reference of the Federal Executive Council, and amounts the spending of which by each of the 8 utilities had to be cleared by the Federal Executive Council. None of the above recommendations was or even could have been predicted on “privatization”!
(3). As of now, the enterprises being recommended for sale to the private sector belong to the Federal Government which has already invested such colossal sum of money into them, viz: (i) N191,825,333.00 for Airways by 1982; (11) N 111, 244, 492. 00 for NET by 1982; (iii) N205 million for the shipping line by 1982; and (iv) N 782,388,000.00 for the ports Authority by 1981. The weighty ethical issues involved in the sale apart, Government ownership is the current position, the status-quo, and the burden of proof for any alleged need to change this status lies with those advocating the change. The report submitted to you on 28/11/84 simply does not establish such a need, but merely grafted the recommendation for sale on to better argued and more pertinent recommendations on how Government can make these public properties profitable.
(4).To the extent that the sale of these assets is being recommended as a panacea for the Government’s current financial problems or as a part of such a panacea, then it is a panic recommendation, for sale will bring Government only a short- lived reprieve, if any, from its present difficulties which, soon enough, will return with a vengeance, intensified several times over after the meager amounts realized from the sales shall have been spent, or worse, childishly squandered, on adult equivalents of “chocolate’’ and “ice-cream’. Thus the FGN would end up with no money, no assets and no capacity to borrow, internally or externally. Besides, given that the FGN’s main problem – largely created by the private sector – is with foreign exchange, and given that these assets would be sold in the local currency, – while a good part of them, (e.g. NET’s equipment, Airways’ aeroplanes and NNSL’s ships) were bought in hard, foreign currency – it is impossible to see how selling them would bring the FGN even a temporary relief.
(5). In fact, Sir, no valid, irrefutable, grounds have been advanced by the other members of the study Group to justify the sale (“privatization”) of the utilities which they are recommending. At most, there are only two grounds for making such a recommendation and they very preposterous indeed. These are (i) that the private sector is more efficient than the public sector and (ii) that the role of government in the economy is to start enterprises, nurture them to the point where they are about to start yielding profits and then sell them to the private sector – i.e. a few individuals who, I dare say, are more likely to be in collusion with foreign interests than not. I shall later on expose the baselessness of both of these grounds. But I would like to observe here and now that it is for this second reason that the study Group has targeted only those enterprises which are potentially very lucrative for “privatization” while leaving for the rest of us, that is 99% of the Nigerian population, the ones that for sometimes to come are likely to remain more of liabilities than assets. I would also like to observe that the four enterprises that have not “qualified” for privatization” namely, the National Electric Power Authority, (NEPA); The Post and Telecommunications; the Nigerian Railway Corporation, and the Nigerian Airports Authority, are among the “normal” conduits through which invisible, unacknowledged Government subsidies are passed on to the private sector, subsidies which are not ‘chicken feed’ as can be judged from the followings:
- N576,207,311 for the Nigerian Airport Authority by the end of 1979;
- N1,041,116,000 for the Nigerian Airports Authority by the end of 1980;
- N2,891, 974,037 for post telecommunications by the end of 1981;and
- N 2,946,145,000 for the National Electric Power Authority by 1981;
Staggering sums of money which has already been eaten deep into by “losses” – i.e flagrant transfers to the private sector. Thus, for example, of the N576, 207, 311 that was invested by Government in the NRC by the end of 1979, as much as N269, 461,560 had already, i.e. by the end of 1979, been wiped out by “accumulated losses”. Hence my colleagues are recommending them neither for “privatization” nor for liquidation but for retention by Government – as conduits through which Government should continue pumping invisible and incredible subsides to the private sector!
(6). Except with bank loans which – given 60% ownership of even commercial banks by the Federal Government, are therefore loans from Government itself – there will be no Nigerian buyers: for, the same consideration which in the first place made Nigerian tycoons to send most of their money abroad – namely, that it is mainly stolen money whose sources the owners hate to have to disclose – will also stop them from returning it to invest in the country. In the alternative, these vital enterprises – every one of them concerned with communication – will have to be sold to foreigners, directly. These foreigners will, in turn, demand guarantees from their home governments against probable re-nationalization in the future. Such guarantees would be given – based on intention to seize Nigeria’ assets abroad in the event of such a renationalization. This way, by ‘privatising’, Government would among other ruinous consequences, be mortgaging our assets abroad.
(7). Sir, even if, by one means or another, Nigerians produce the money to buy these enterprises, patriotic Nigerians and the military government will be deluding themselves if they believe that these vital properties will long remain in Nigerian hands, for capitalism is an expansive and supremely international, phenomenon, as I shall argue in greater details later on in this letter. This international character of capitalism means that the sale of public enterprises to private Nigerian hands will, given the extreme weakness of the Nigerian “capitalist” class, amount to selling the enterprises to foreigners with the Nigerians merely serving as fronts or, at best, stop-gap, intermediate, buyers. Hence, going ahead with the “privatization” of these vital assets – just as in the case of admitting foreign private participation into our agriculture –will constitute a significant, first, step in the direction of selling our country; and constitute a significant, first, step in the direction of selling our country; and what a historic irony that would be at a time when the military Government has mobilized all the country’s news media to call on the people to be patriotic! What a classic example that would be of preaching one thing and practicing another!
(8). All enterprises earmarked for sale to the private sector” namely:
- The Nigerian External Telecommunications;
- The Nigerian Airway;
- The Nigerian national Shipping Line; and
- The Nigerian ports Authority
are of strategic, economic and military importance to the country, if for no other reason than that they provide vital links between Nigerian and other countries of the world, both are legitimate and logical complements of the Air-Force and the Navy. Hence, no government, which has not lost control of its faculties, will let go any of these enterprises, especially when selling them, to anybody, ultimately means selling them to foreign interests.
(9). Privatization”, of necessity, assumes that any of the enterprises to be sold can be allowed to collapse without serious consequences to the country economically, militarily and politically. Such an assumption – that any of these enterprises can be allowed to collapse and liquidate –is patently wrong and needs no refuting. It refutes itself. This being so, the proposal that these enterprises should be “privatized” has two very dangerous implications. These are: (i) Either, in spite of their being vital to the country economically, militarily and politically, the FGN should sell them into private hands where, among other possibilities, they could collapse, or (ii) that even while handing them, dirty cheap, to private profit-seekers, the FGN should hold itself ready to salvage them with the infusion of public money in the very probable event of their being poorly managed to the point of having to liquidate. Either of these two implications of “privatization” is highly objectionable to the nation and its vital economics, military and political interests. And for those who currently hold them in trust for the people, the two proposals should be objectionable on grounds of honour also.
(10) Bourgeois economic theorizing to the contrary notwithstanding, direct participation in the economy by Government is the rule rather than the exception. The world over, not the least is such major capitalist countries as the Federal Republic of Germany, Japan, France, Britain, Italy, Sweden and India. Indeed, even if we were to discount the Socialist countries, namely the Soviet Union, the People’s Republic of China, Viet Nam, Laos, Cambodia, the countries of Eastern Europe and Cuba, which, together, have a population that is well above 1/3 of mankind – and I see no legitimate ground for treating their experience as irrelevant to Nigeria – the international trend in the last 12 decades has been towards greater government participation. The reversal of this trend, such as “privatisation” by Japan in the 1880s, or as was attempted in Chile after the brutal fascist coup of 1973, have been superficial, or inconsequential, minor when compared to the main historical current towards direct government participation in economic ownership and management. But even what happened in Chile is been exaggerated by private enterprise economists who want to prove that there is a strong worldwide trend towards “privatization”, a contention which cannot be supported by empirical data which, in fact, show that the trend is strongly in the other direction, that of greater state intervention, not the least in the U.S. where the Nixon Administration, for example, had to rush in to save Lockheed from collapsing, or in Britain where, still more recently; the Conservative Government moved in to save Leyland Motors from a fate similar to that which had earlier on stared Lockheed in the face.
(11) Here in Nigeria, direct Government participation in the economy came about as a historical necessity – permanent and irreversible necessity – for, as this necessity would have it, at the point in time when it became politically feasible within capitalist arrangement for Nigeria to restake its claim to the resources of its own territory, the Nigerian Government was the only capitalist of note around to enter into competition with foreign capitalists for the control of these resource. What was true on the eve of Nigeria’s flag independence is still true today, in spite of the recent, phenomenal mushrooming of a new ‘native’ crop of tycoons; the Nigeria Government is still the only local capitalist that can offer anywhere near an effective competition to foreign capitalists on our soil, over the control of our own resources! If anything, this is all the more true today than it was in the 50s and 60s; for while the Nigerian economy has made some progress in the class structure of the society; the industrialized capitalist countries of the world have made still greater progress, thus worsening the relative position of Nigeria in the world and the existence of such new organizations as UNCTAD, UNIDO, the North-South Conference and of their feeble and timid attempts to redress the situation within the context of word capitalism, to all of which Nigerian is an adherent.
(12) Indeed, it is ironic that the issue of Government direct participation in the economy is being debated right now, for it was settled here in Nigerian as far back as 1973 during that year’s Economic Society of Nigeria Conference, devoted to public Enterprises. During this Conference whose proceedings have been published as a journal by the society, the unanimous agreement of the bourgeois economists gathered there was that direct government participation in Nigeria’s economy was irreversible. Thus Professor H.C. Kodlinye, the then Vice-chancellor of University of Nigeria, Nsukka where the Conference held, in his opening address, led the way in expressing support for state capitalism, though somewhat apologetically;
The principle is generally accepted that the public sector should play a vital part in Nigeria’s developing economy, but its role should be subjected to continuous and critical evaluation. The government has more resources at its disposal in terms of capital, manpower, etc, than any single individual or group. This recourse are utilized not only in the provision of the traditional public utilities and services such as railway, electricity and power, harbor, highways, medical-care, education, etc, but also investment in industry and commerce, i.e. in areas which in some more developed economies might be regarded as the exclusive preserve of private enterprise. The reality of our situation is that indigenous entrepreneurship has not developed sufficiently to keep pace with its foreign counterpart. The Government has, therefore, added to their traditional role participation in the productive sector of the economy. In any case, the development of the country along modern lines is essentially a governmental obligation which require large capital investment but which are essential for maintaining reasonable living standards but provide low rates of return on capital lend themselves more to public control and maintenance”
The view was then taken up at a greater length by the doyen of the progressive, positivist tendency in the bourgeois economic camp, Professor O. Aboyade, who examined ‘’the role of the state in the development process”…… against the empirical realities of the Nigerian case” and argued that:
The aim of development planning in Nigeria is that economic growth should be accompanied by general development. In other worlds, the benefits of economic advance should be distributed as widely as possible over the entire society. Government as the most important single institution for ensuring the translation of growth into development through the provision of economic and social service, must have, at its disposal, resources sufficient for achieving these goals of society. Government investment activities will no longer be limited to the public corporations and dying industries in which no private company can thrive whilst leaving the virile, expansive and profitable industries to private enterprises.
The Professor removed any doubt whatsoever about support for the dominance of state capitalism as against the dominance of private enterprise when he asserted:
The Western liberal view of this issue is essentially a negative one, namely to cover up gaps and deficiencies in a performance process dominated by private enterprises. Beyond the natural monopolies and semi-public goods, (gas and water- Socialism of the Fabians), public enterprises are defended where private enterprises is unwilling or unable –considering the test of financial profitability – to undertake the production of certain goods and services which may be judged to be socially desirable. …Pressure of international competition in the home or external market, inability to perceive or wait for long term benefits from a given investment programmes with a long gestation period and the fear of large scale unemployment in sensitive areas of the national economy are some of the other additional justifications made for public enterprises in directly productive activities. For an under-developed country, however, the more relevant question should be: why not public enterprise? In other words, the presumption should not be private enterprise in the first instance. The theoretical supremacy of public enterprises should be taken for granted, as implicitly justified by the very character of the existing state of underdevelopment. In this context, the relevant policy becomes one of analyzing and removing obstacles to the expansion of the public sector as a standard production mode”.
Mr. A.E. Ekukinam in his own paper was as forthright and gutsy as Professor Aboyade, if not more, in his support for state capitalism as opposed to private enterprise. Thus for him, “there is no argument today on whether or not the state has an active role to play in the economic development process. This is accepted as a necessity, especially in the developing parts of the world. The issue now is probably on what form such active involvement should take”.
Further down in his paper, he bluntly deposed: in development economics terms, there is no other way; only the Government can command the vast resource necessary to start and keep a modern industry in operation. Thus, attempts to controvert the issue of Government – in business will not really succeed in Nigeria. The argument here is that Government – in business is becoming a way of life in Nigeria and should. It does not depend, nor need it be defended, on ideological grounds. It is dictated by the economics of our time.” Hence, Mr. Ekukinam laid it down that:
“In the rest of this paper, it is assumed that the government is contingently in the entrepreneurial sector to stay. It is also put forward that such active involvement in the economy is necessary if development is to take place and accelerate. It is also put forward that Government investment should not be confined to sectors or activities but should cover any business considered crucial for national economic development and self-reliance – given the resource. It is also deposed that doctrine or ideology, whether from America or Russia, bears no relevance to this development in Nigeria. Yet, ideologically, one can say one thing and, that is that ‘capitalism’ as we were taught to accept, (sic) is dead. States, States, including the United States, are increasingly and actively involved, either openly or covertly, in entrepreneurial investment.”
All the others who spoke, and these included Mr. A.A. Ayida, who, as the president of the Society, preoccupied himself mainly with national constitutional issues; Dr. Pius Okigbo, whom I would put at the head of the more doctrinaire and less rational rightwing of the Nigerian bourgeois economic camp; Professor Bhambri who was certainly to the right of Professor Aboyade; and Mr. S.O. Wey who seemed to occupy more or less the same position as Professor Aboyede within that camp, all accepted the abiding necessity of state capitalism, though the more doctrinaire ones among them were rather mournful in their acceptance of this necessity.
It is thus a debate that was so definitively settled eleven years ago, even in bourgeois economic circle, that is now being reopened, without good cause.
(13) Privatization’’ is incompatible with an overall planning of the economy, something that has become the trend in the world, at least since the emergence of the Soviet Union which led the way in that direction with ‘miraculous’ consequences. The fact that a Government cannot plan an economy that it does not own and control is amply attested to by the last 22 years in the life of this country during which four development plans were each thrown out of gear by that erratic, unpredictable, greedy and short-sighted factor called the private sector, ‘native’ and foreign. So, is ‘privatisation’ incompatible with even the minimal social objectives enunciated in our development plans and enshrined in the 1979 (modified) Constitution, namely:
The state shall direct its policy towards ensuring-
- The promotion of a planed and balanced economic development;
- That the material resources of the community are harnessed and distributed as best as possible to serve the common good ;
- That the economic system is not operated is such a manner as to permit the concentration of wealth or the means of production and exchange in the hands of a few individuals or of a group; and
- That suitable and adequate shelter, suitable and adequate food, reasonable national minimum living wage, old age care care and pensions and unemployment and sick benefits are provided for all citizens; and
17-(2) (d) exploitation of human or natural resource in any form whatsoever for reasons other than good of the community shall be prevented.
(14) Sir, one of the grounds on which the privatization of public enterprises is being recommended, namely the claim that the private sector, unlike the public sector, is efficient, cannot withstand a close examination at all. This is because on close examination, it will turn out that those who want to pass off the private sector as efficient judge it solely on the basis of its ability to make money, ignoring the quality of the “services” it renders and the immense subsidiary support it enjoys from the Government. I insist, Sir, that anybody who argues that the transport “services” provided by the private sector in this country, for example, is efficient cannot themselves have of recent travelled by that transport. Otherwise they would have discovered, among other things (i) that the comfort of passengers does not bother the operators of that transport; (ii) that time is of no consequence to them; and (iii) that they are abysmally dishonest and discourteous. Whatever his station today, any Nigerian who has had to leave home in his teens or twenties in order to get education elsewhere ought to have memories of (i) how lorry, bus, taxi owners and touts, in a bid to fill their vehicle with passengers, first fill them with ‘false passengers’ with the deliberate aim of fooling an intending passenger into believing that they needed just him in order to fill up and leave: a deceitful business method that would keep an intending passenger waiting in a vehicle for upwards of 6 hours, neither travelling nor doing anything useful; (ii) how in the course of a journey a vehicle would arrive at a town early in the evening, stop and then the driver and the owner would come out, lazily walk away as if to look for water or answer the call of nature, only never to return that night, leaving each passenger to fight it out with other passenger for space in an overloaded and overcrowded vehicle; (iii) how when at 7.30 a.m. or 8 a.m the driver and the owner returned, they would have not a word of apology to the passengers, indeed if anything only abuse for those of the passengers who dare to question their behavior; (iv) how it was customary, indeed routine, for vehicles to break down in the middle of a journey, a breaking down due to overloading and poor maintenance, only for those in charge to disappear as if to look for a mechanic, which mechanic would come after a long while together with only the driver’s mate and embark on the repair which might involve the vehicle staying in that spot for three days and, all this while, without the passengers having anybody return their fares or getting an apology. Indeed, those of them who had the courage to ask for refund world receive the rude and irrational retort, “has the vehicle gone away and left you here”?
(15) If we turn to hotel services, the story is the same. …..
(16) Perhaps those who would pass off the private sector as efficient would prefer to examine Nigeria’s agricultural development, another terrible basic aspect of our economy that Government has preferred to leave in the ”efficient” hands of the “private sector”, to which Government has ,both directly and through Government- owned banks, advanced billions of naira over the last ten years alone, in addition to building dams, conducting supportive research and experiments, and heavily subsiding fertilizers and agricultural implements. Yet far from the private sector, which dominate our agriculture and which enjoys all this government patronage, feeding the people of this country and supplying industry- itself dominate by the private sector – with the raw materials they need, our import bills for food and industrial raw materials have been rising in direct proportion to the billions lent to bourgeois “farmers” in the private sector. Nor is the private sector efficient even in the distribution of the huge amounts of food imported as a result of its inefficient handling of agricultural production. Thus, this with hard foreign currency provided by Government has become the object of speculative profiteering in the “merciful”, “tender” hands of the “efficient” private sector, speculative profiteering unsurpassed in the annals of mankind. Thus the private sector has doubly sabotaged Government effort to feed the population of this country: (i) the private sector have abused the loans advanced to it, as well as the land taken over from peasants and handed over to it, and has refused to develop agriculture, including food production; (ii) the private sector has sabotaged even the distribution of imported food. What about industry?
(17) For all its vaunted “efficiency”, Sir, and for all its touted “courage and boldness”, Sir, the Nigerian private sector, has by and large avoided industry, where investment takes some time to mature. Instead, the Nigerian private sector – the veritable blood-sucker it is – has preferred to “invest” its stolen and borrowed money in the safety of real estate. Either that or the Nigerian “private sector” has brought themselves – with the aid of Government decrees and Government loans – into “part-ownership” of profitable foreign businesses. And now they want to “buy” – once more with the aid of Government legislation and Government loans – lucrative Government enterprises. Because of this “caution” – caution indeed! – What little industralisation Nigeria has to show for the last 24 years has been the result of direct efforts of Government – in the case of heavy industry, to wit, steel – and of foreign investors, who are out here to capitalize on the laziness and general weakness of “our” private sector, swindle us; make “a quick buck” and bolt, or be deported, if they open their mouths too wide, as in the case of Nagaty of ZIL fame. It has been in a desperate effort to find substitutes for the infantile “Nigerian” “private sector” that successive Nigerian Governments, bereft of imagination, resorted to over-generosity towards foreign “investors”, an over-generosity, that has included: “…tax holidays, accelerated depreciation of capital, compensations for inventiveness and use of local substitutes, etc”, to quote the Fourth Nigerian National Development Plan, 1981 – 1985. So much for the “efficiency” of the Nigerian “private sector”.
“Privatisation”, Professor Ojetunji Aboyade, Professor H. C. Kodlinye, A. A. Ayida, Nigerian Economic Society, UNCTAD, UNIDO, North-South Conference, Leyland Motors, Chile,
(18). It may well be argued, Sir, that at least in certain fields the private sector is more efficient than the public sector, for all the faults of the private sector. A field which may be tempting to hold up as an example of the private sector performing better than the public sector is air- transport. In that case, I beg Government to remind the admirers of the “ efficiency” of private air charter service that (i) it is Government itself that is helping the private charters to make apparently more brisk business, through the policy of forcing the Government carrier, the Nigerian Airways, to extend its services to cover all parts of the country, even though purely commercial consideration might have dictated concentrating on certain routes, while the private charters are allowed to concentrate all their money- making activities on the more lucrative routes; (ii) that the charter companies which lease their planes from foreign Airlines are, everything considered, nothing but pipes through which Nigerian foreign exchange is drained, sometimes which is true of the Nigerian Airways also but to a far lesser extent since the latter owns 22 out of its present fleet of 25 aeroplanes: (iii) that these private air charter companies maximize their profits through “economizing” on maintenance, and by excusing themselves from taking out insurance for the lives of their passengers, “cost saving measures” which, while raking in super profits for these charters and their foreign principals, make flying with them like walking a very high- hanging tight rope “without a net”, (iv) that while Government treats the Airways as a “monopoly”- quite falsely in view of the large number of private charter companies that compete with the Airway on its most lucrative routes- and therefore impose tariffs on the Airways, no real control is exercised on the private charters, who, therefore, while going out of their way to undercut the Airways on Nigeria’s most lucrative routes, charge astronomical sums on the other, out of the ways, routes, when somebody urgently needs their services on these same routes on which the Airways is forced by Government policy to charge very low tariffs; (v) that while the Government impose what amount to political and social service function on Airways, without compensation, and while not imposing the same functions on the private charters when it comes to using Airport facilities and services, the Airways and the private charter companies are treated just the same.
Thus, it should be clear that there is no equal competition between the Airways and the private charterers. The competition is heavily loaded against the Airway and in favour of the private charterers; and this loading of the competition against the Airways is done by the Airways’ own very owner- Government; an irony of ironies, on the surface.
(19) Nor, Sir, is the “competition” between the Nigerian Railways and road transport, which is over 95% in private hands, a free and fair competition. Thus: (i) to start with, whereas the Nigerian Railway Corporation builds and maintains its railroads, motor roads are built for the road transport owners and they use these roads frees of charge; (ii) the Railway Corporation, once again on the false assumption that it is a monopoly- which it definitely is not- has its tariffs imposed by law and these are kept very low while road transport fares are not even regulated, and keep on soaring- on a monthly basis; (iii) despite the much lower tariffs of the Railway which makes it commercially more rational to transport bulky goods by rail—despite all this- Government itself has neglected to use the services of the Railway in which in the period 1979 to 1981 alone, it invested N480 million, and instead, patronises the privately- owned road transport “services” at enormous, indeed astronomical fares; (iv) despite the fact that all countries that have developed, did so on the basis of rail and water transport , successive Nigerian Government – under the pernicious but very powerful influence of the corruptive private sector – have sunk billions of Naira into the construction of such a maze of roads as Nigeria now has while, on the one hands, forcing the Railway to stagnate where the British left them, except for the Bornu Railway Extension but, on the other hand, has both disbanded the inland waterways corporation, formerly based at Lokoja, and allowed our two major rivers each to become a series of pools and lakes, separated by huge island that were definitely not there 20 years ago and (v) Government has adopted the policy of selling petrol at much below the cost of production, a massive boom to private transport operators without at the same time regulating transport fares; a policy that has led to a disgraceful situation in which road transport fares are lower in some of the West Africa countries which import their petrol from Nigeria! Thus it is that Government policy has forced the NRC to record losses instead of profit, losses that cumulatively stood at N631.2 million by the end of 1983: a colossal sum which Government policy has forced the NRC to transfer to the private sector, through open theft, inflated contracts, grafts, and having to operate at much below optimal capacity for lack of Government patronage, which is geared towards the private sector….
(20) As for Nigerian External Telecommunications which provides the private sector with international telephone and telex links with all U.S. and West European cities; services which are available from 10 out of our 19 state capitals, in fact provides this service, whose volume jumped by 117% within 12 months alone, free of charge. I say this because in 1982 for example the NET collected only N10.00 million out of N82.00 million owned to it by the private sector; and this was a year at the end of which NET had only a total of N2.2 million in its bank accounts! A good part of the N72 million it failed to collect in 1982 was said to be owned by subscribers either whose identities could not be ascertained, or had given false addresses before making the calls! Yet, my point is that it was the private sector that, in collaboration with those in charge of the NET, duped that organization. It is this fact that makes selling the NET to the private sector, other considerations, such as national security, apart, highly unethical. It would be like rewarding open theft.
Besides it should be noted, Sir, that the NET depends on the P & T for the telephones and some other facilities that NET’s subscribers use to reach the outside world. The fact is that the P & T is so huge and cumbersome in its size and financial structure that the private sector is not proposing to grab it. Hence in the absence of a twin proposal that the would-be beneficiaries of the “privatization” of NET should also start a telephone company, and build their own earth stations, the extent to which “privatizing” NET would defraud the Federal Government, on a permanent, continuing basis, is too scandalous and mind-boggling to contemplate.
(21) Such a transaction would as a measure of the Government’s lack of business acumen be rivaled and surpassed only by the other proposal – that the Federal Government should “privatise” all the money-making undertakings of the Nigerian Ports Authority while retaining the money-consuming undertakings that yield no direct dividends; and this in spite of the fact that already by the end of 1981 the private sector was owing the NPA N74.3 million in unsettled bills! Lest I be charged with not substantiating my point about a cunningly selective “privatization” of NPA, here are the functions of the Authority that my good colleagues are recommending for “privatizing”, bless that “innocent” word:
- loading and unloading vessels;
- handing of cargo in ports;
- warehousing and dispatching of cargo and
- corresponding documentation and revenue collection;
And here are the functions of the NPA to be left for Government, because, to quote the Report submitted to the Head of State: “These functions are not susceptible to economic viability calculations,” a beautiful and enigmatic way of saying they are not profitable:
- planning and execution (or its supervision) of port infrastructure and its maintenance;
- dredging of waterways and approach channel;
- hydrographic surveying;
- setting of rules and regulations and uniform standards for port operations;
- initiating and enforcing policies on port and cargo handling charges;
- rendering certain marine services (such as aids-to-navigation, lighthousing, harbor master services etc.);
- ensuring of and setting standards for safety and security ports;
- planning and research, monitoring port performance, keeping port and traffic statistics;
- pollution control and setting standards for it;
- manpower development and training and setting standards for it;
- representation of Nigeria in international institutions and public relations…….
(22) Sir, judging from the present economic crises and the recent orchestrated clamour of the private sector for the sale to its members of such potentially lucrative Government properties as the Airways, National Freight, NET, etc, it seems the hour has come, or at least fast approaching, for the collapse of the co-existence of a public and a private sectors in Nigeria’s economy – a co-existence that has been entirely on the private sector’s own terms and to its unshared advantage; it seems the hour has arrived or is fast approaching when one of these two sectors will have to intone the funeral dirge of the other, or at least reduce it to the position of an unmistakable subordinate. Such is the ruthless logic which the “private sector” is now willy-nilly seeking to impose on the Nigerian economy. But should things come to this, then I recommend – indeed ethics, morality and the logic of our economic history, so far, dictate – that Government should opt for the clear-cut subordination of the private sector. This is because, apart from the private sector being abysmally inefficient, poorly managed and of no profit to Nigeria – the private sector has by and large been built on the proceeds of theft from the public treasury. This could amply be demonstrated – in addition to recourse to the findings of probes into the management of various Government financial agencies – from the records of our Marketing and Development Boards which, respectively, were used to surtax this country’s peasantry and then “lend” the proceeds to a few individuals whose hands were too clean to hold a hoe. The fact of theft could also be demonstrated from a careful study of the history of the lending and loan recovery of the various banks set up by the Federal and State governments, all of which banks were set up with the proceeds of Marketing Boards or of the sale of our petroleum…Indeed when the economic history of this country comes to be written “as it was”, nobody will be left in doubt – legitimate, defensible doubt that is – about the fact that what is now so arrogantly throwing its weight about under the sign-boards of “private property” “private sector” etc is nothing but public property – i.e. common-property – masked, disguised and stood on its head.
(23) Hence if one of the present two forms of the property in the country is to be taken over and abolished by the other, then both ethics and needs of the economy demand that it is private property that should be so abolished, for the private property we see around was built up by theft from public property and is today sustained and nurtured, not by industry and hard work, but by the proceeds of further theft from public property disguised as super-profits, commissions, rents, etc; along with very generous subsidies from the public sector in the form of cheap electricity – 80% of whose bills are ignored; telephone and telex services, which, as we have seen above, are largely unpaid for by the recipients; cheap petrol and roads built and maintained by the public treasury and for which no toll is paid; and all this without bringing prices and fares down for the common people.
Yet another very significant way in which public enterprises are made to subsidise private enterprise is by public sector being used as an on-the-job training ground for private sector managers and technicians, who on graduation at the end of an educational career financed with public money, first take up jobs in the public sector; work there for some years; make all the mistakes associated with the transition from theory to practice; gain experience; and are then snatched by the private sector, which offers them much better service condition. In fact it is largely in order to facilitate his brain drain from the public sector to the private sector that the neo-colonial policy of keeping the conditions of civil servants and managers of Government parastatals very austere and frugal and their future bleak when compared to those offered in the private sector is maintained, a policy enforced by people who may be in the public sector but whose loyalties are with the private sector where they themselves hope to “retire” after making an initial capital through abuse of office; after gaining administrative experience; and after making the correct business connections through their official duty intercourse, which, indeed among other things they may use to serve and patronize the private sector, from which they hope later to collect deferred rewards. Worse still, of recent whereas the private sector is treated as a sacred preserve into whose workings Government and its agencies should not pry, private sector practitioners, including men who have spent all their lives unquestioningly serving foreign multinationals have been given ever greater control over the public sector by being appointed on to the latter’s board of directors, being appointed members of commissions of enquiry into the working of Government enterprises and being made Ministers, Commissioners and Special Advisers; all this while they have not severed their links with the private sector, except, perhaps, in a purely formal and highly legalistic sense.
(24) Indeed and morality apart, it is NOT in the interest even of private property itself that public property should disappear; for private property – to the extent that it is owned by “Nigerian citizens” – cannot survive public property by any length of time. Abolishing public property will, for private property, be like the proverbial case of killing the goose that lays the golden eggs. In this sense then, private property is itself hostage to public property. Thanks be to Allah!
(25) Furthermore, Sir, the assault on public property being proposed by the other members of the Study Group, which is, perhaps more unwittingly than wittingly, acting on behalf of private interest, is nothing but a prelude to the outright sale of Nigeria to foreign interests: The proverbial lack of patriotism of Nigerian businessmen apart, the truth of the matter is that Nigeria, as of now, is part and parcel of the capitalist world dominated by the United States; but Nigeria is a weak peripheral part of that capitalist world, nonetheless; and the “universal law” of the capital world is “competition” in which success in any given contest goes to the stronger competitor, even though this “victor” too, will, in his own turn, be defeated in another competition, by a still stronger and more unscrupulous rival. This universal – real jungle – “law” of the capitalist world, “competition”, knows no international boundaries; knows no sovereignty of nations; and knows no tariffs walls, however “high”. For these “higher” tariff “walls” are easily knocked down by cajoling, threats and blackmail at the conference table, e.g. During negotiations for IMF loans, during which the “liberalization” of trade is demanded as a “minimal condition”; or at a country’s often very porous, borders, through bribery and blackmail. Now, then, Sir, whereas for the metropolitan countries of this anti-social “world” with its system of “each against everybody else”, there do exist private capitalist corporations of sufficient economic clout and experience in the “tricks of the game” to withstand and defeat all competition from others, whether internal or external, in the peripheral countries – Nigeria inclusive – the only capitalist that have the slightest chance of holding their own against the metropolitan corporations and their multinational subsidiaries are Governments Incorporated: It is the latter that, on the one hand, invest the economies of these peripheral countries with a measure of autonomy, however small, and on the other hand, through their direct ownership of substantial property, provide the conceited “private sector” some cushion against the mighty blows of the metropolitan corporations and their multinational subsidiaries. Hence when the “private sector”, in a fit of childishness, seeks to destroy this autonomy and this cushion, such as the over-pampered “private sector” in this country has been trying to do in the last 24 months or so, a responsible Government should firmly tell it “No, You shall not” just as a responsible parent would tell a child threatening to put the family house on fire. After rejecting privatization what do I recommend?