By Vincent Ikuomola 2 hours 20 minutes ago

President Goodluck Jonathan yesterday admitted that the nation’s privatisation programme, which began in 1999 has failed and called for sanctions against unserious investors.
He also lamented failures of the private sector to turn around ailing government firms sold to them.
The president said contrary to expectations that government firms will be better managed by the private sector, the reverse has been the case.
He, therefore, advocated sanctions should be built into future privatisation agreement to ensure that only serious investors are involved in the programme.
Jonathan spoke at the inauguration of the National Council on Privatisation (NCP) held at the vice president’s wing of the presidential Villa, Abuja.
The inauguration of a new council was in consonance with the Bureau of Public Enterprise (BPE) Act 1999.
Vice President Namadi Sambo is the Chairman of the council, which also has as members Finance Minister as vice chair, Attorney General of the Federation, Minister of Trade and Investment, Minister of National Planning and Secretary to Government of the Federation. Others are governor of the Central Bank of Nigeria, Special Adviser to the President on Economic Matters, NLC President, Chairman, National Association of Chamber of Commerce, Industry, Mines and Agriculture (NACCIMA) and BPE DG/Secretary.
The president charged the new council to tackle lapses that had hindered the survival of privatised companies in the past.
He also urged the council to ensure that appropriate monitoring mechanism is built into all future privatisation agreements.
“We believe the private sector will handle things better that than the public sector. But the whole story about privatisation has not been as successful as Nigerians expected it to be.
“The feeling is that a number of enterprises that have been privatised by the Federal Government are not doing too well. So, these are the kinds of areas the new council members should address their minds to, the ones that had been done and the new ones that are yet to be done.
“In any agreement or arrangement you will have with the private sector that will take over assets of government, we must make sure that we build monitoring into it and there has to be some sanctions,” he said.

http://www.thenationonlineng.net/2011/index.php/business/14800-privatisation-has-failed-says-jonathan.html

PDP has failed

With the glaring failure of the different privatization programmes not just in the last 12years, i find it worrying that some on this forum (eg Gbawe) still point to the hesitation of the present govt to privatize parastatals as evidence of its failure. GEJ only stated the obvious and I hope people would start putting on their thinking caps before criticizing.

edit

Privatization in which you sell assets to cronies probably won't work, yes. But a transparent bidding process in which international players are allowed to take part?

Can anyone name an example of a failure of that sort?

wesley80:

With the glaring failure of the different privatization programmes not just in the last 12years, i find it worrying that some on this forum (eg Gbawe) still point to the hesitation of the present govt to privatize parastatals as evidence of its failure. GEJ only stated the obvious and I hope people would start putting on their thinking caps before criticizing. 

My brother , you do know that you don't have to automatically defend everything GEJ says and does? Go and inspect my contributions before the elections . You will see that I make it clear that pseudo-privatization is all we will ever get under the PDP. When OBJ was conceding our Refineries, non-transparently, to cronies (Otedola et al) ,while shunning potential world class outfit who have signified interests in the past, what 'success' do you and GEJ expect? The PDP should simply stop playing politics with State asset the FG has shown it cannot run effectively. this is why some of us continue to cite that real reforms of our institutions is the panacea to most of our problems.

We should look at the privatization process itself and how it is heavily compromised, always, by selfish interest.

https://www.nairaland.com/nigeria/topic-521214.0.html

This is the type of woman that will give power supply contract to her semi-illiterate cousin under some pseudo "privatisation" scheme by the GEJ Government that would still lead Nigeria nowhere because of how folks like his own wife will hijack everything good and turn it into their own get rich quick scheme while Nigeria gains nada. We have seen it all before like OBJ and his silly NIPP scheme , that saw Iyabo Obasonjo-Bello and other OBJ cronies winning power generation contracts, with not a single Megawatt added to our grid after many members of the 'in-crowd' became billionaires at Nigeria's expense.

To be fair, Otedola is a crony that actually will make businesses work. So probably not best to give him a sweetheart deal, but at least the end result will be that the business functions.

This is still better than the gov't holding onto it and having the business fail. Not the best of all options, though.

whAT GEJ should have stated is that " THE NIGERIAN KIND OF PRIVATISATION HAS FAILED " Where Public assets are stripped and sold of to cronies. True privatisation has worked for many developed nations - where the bidding process is transparent

ekt_bear:

To be fair, Otedola is a crony that actually will make businesses work. So probably not best to give him a sweetheart deal, but at least the end result will be that the business functions.

This is still better than the gov't holding onto it and having the business fail. Not the best of all options, though.

Irrelevant my brother. Point is that OBJ should not concede any refinery to Otedola while other World class refining outfit have signified an interest. This is a direct analogy of why privatization does not work in Nigeria whereas it is superb elsewhere.

Cynical self-interest always leads the President of the day to embrace selfishness . Vodafone has taken over Ghana Telecom. I don't need to show you that Vodafone is a world class outfit . Despite the noise surrounding the deal itself Ghanaians are now better off for having Vodafone around because Vodafone broadband browsing is excellent and comparatively good value .

I can tell you , as someone working with the reality on the ground, indeed what matters to ordinary citizens most , that Vodafone browsing is far better than anything I have experienced in Nigeria. If we had been similarly placed, I will bet that Vodafone would not have emerged as the replacement fo NITEL . Instead it will be some "Rockford telecoms" ( probably a conduit registered yesterday for use by OBJ, GEJ, Anenih and 'awon boys').

@Gbawe

A friend of mine worked for Vodafone in Ghana - Vodafone is definitely doing big things in GHANA a relatively small country compared to Nigeria - Can you just imagine that effect Vodafone will have on Nigeria if it had taken over NITEL

There is a saying (from Voltaire, it appears), "The perfect is the enemy of the good."

There are four options:
1) Gov't holds on and mismanages/destroys
2) Gov't sells to incompetent crony
3) Gov't sells to competent crony
4) Gov't sells transparently and world-class buyer buys

#4 is of course best. But #3 is nearly as good, and a helluva lot better than #1 or #2. You feel me?

Demanding perfection in Nigeria. . . well, I'm a bit jaded, hehe. I just want a country that works reasonably well.

blacksta:

whAT GEJ should have stated is that " THE NIGERIAN KIND OF PRIVATISATION HAS FAILED "  Where Public assets are stripped and sold of to cronies.   True privatisation has worked for many developed nations - where the bidding process is transparent

My brother , you are correct and that is what I stated above. You are in the UK, so I trust you know Vodafone. It is instructive that Vodafone , one of the best telecom outfit in the World, can be in Ghana providing world class services Nigerians can only be envious of while the Nigerian Government is only ever able to concede our assets to dodgy, non-expert, zero history Companies  in their "pseudo-privatization" scam they will then turn around to condemn in future as GEJ is doing now . We know GEJ is only justifying his action of reneging on his privatization promises. I ain't mad at him because I did not expect anything different from a man committed to the same practices of the past that continue to destroy our Nation.

Someone should go and study the report on the NIPP scheme under OBJ. That was a classic. Even Iyabo Obasanjo-Bello won contracts for the Company she set up 2 days before tenders for contracts were submitted !!!!

What we should be asking is whether or not our market is good enough to attract the so called international players. During the sale of the first set of GSM licenses, OBJ had to literally beg Visafone to come to Nigeria but they declined, though events have proven they made a bad decision, i'm not sure they completely regret doing it. A number of other parastatals that have gone under the hammer no matter how attractive have also failed to attract good international players - NITEL comes to mind - What we r left with are usually second grade coy's so its no surprise that the likes of Delta steel coy went to the Indians that stripped the company bare. While privatisation should not be discarded in SOME cases, i believe monitoring like GEJ said is the key to its success but rushing into it with a history as chequered as ours would be foolhardy.

wesley80:

What we should be asking is whether or not our market is good enough to attract the so called international players. During the sale of the first set of GSM licenses, OBJ had to literally beg Visafone to come to Nigeria but they declined, though events have proven they made a bad decision, i'm not sure they completely regret doing it. A number of other parastatals that have gone under the hammer no matter how attractive have also failed to attract good international players - NITEL comes to mind - What we r left with are usually second grade coy's so its no surprise that the likes of Delta steel coy went to the Indians that stripped the company bare. While privatisation should not be discarded in SOME cases, i believe monitoring like GEJ said is the key to its success but rushing into it with a history as chequered as ours would be foolhardy.

You are lying as usual in your attempt to shift blame away from the FG and thus GEJ. Even in my endeavours ,as a private individual, I have been able to interest a very well-known and award winning UK electronics retailer in a franchised arrangement in Nigeria. The main problem is that the Nigerian Government always shun dealings with Companies who will deliver the goods if said Company is not dodgy enough to 'play ball' the 'Nigerian way' . That is the level of rapacious greed we are dealing with that is holding us back and not readily seen elsewhere.

The Nigerian Government is not ready to give the business guarantees, incentives , pledges and assurances that can attract the best Companies with a proven history of efficiency. This is because , after all is said and done, our "owners" don't want to be accountable and they certainly don't want to work with folks who only know how to do things with total integrity. Our security situation and infrastructural deficiency is a direct turn off but I have found , through personal experience , that many companies will seriously consider the model of far greater profit commensurate with taking more risks and putting up with more difficult conditions. That is what business is about.

Let us say the truth and shame the devil. Successive PDP President have simply used privatization directives as a way to make themselves ,and others , billionaires rather than as an Avenue to seriously begin the drive to move Nigeria forward by ensuring the most competent hands from the private sector are deployed .

Gbawe:

You are lying as usual in your attempt to shift blame away from the FG and thus GEJ. Even in my endeavours ,as a private individual, I have been able to interest a very well-known and award winning UK electronics retailer in a franchised arrangement in Nigeria. The main problem is that the Nigerian Government always shun dealings with Companies who will deliver the goods if said Company is not dodgy enough to 'play ball' the 'Nigerian way' . That is the level of rapacious greed we are dealing with that is holding us back and not readily seen elsewhere.

The Nigerian Government is not ready to give the business guarantees, incentives , pledges and assurances that can attract the best Companies with a proven history of efficiency. This is because , after all is said and done, our "owners" don't want to be accountable and they certainly don't want to work with folks who only know how to do things with total integrity. Our security situation and infrastructural deficiency is a direct turn off but I have found , through personal experience , that many companies will seriously consider the model of far greater profit commensurate with taking more risks and putting up with more difficult conditions. That is what business is about.

Let us say the truth and shame the devil. Successive PDP President have simply used privatization directives as a way to make themselves ,and others , billionaires rather than as an Avenue to seriously begin the drive to move Nigeria forward by ensuring the most competent hands from the private sector are deployed .

You obviously love the sound of your own voice, even to the extent of crudely accusing others of lying. I'm wondering what you are going on and on for, anybody listening to you would think you were the one that advised GEJ that the privatisation methods govt uses need straigtening out, because they don't work.

Is there anything new you are bringing to the table? No, its just the usual partisan dust. If you want to oppose for the sake of it, why not argue that privatisation was successful, instead of daftly reading GEJ's arguments back to him as if they are original to you.

Former Minister of Justice Andonkkaa  or whatever his name was wanted $20 Million ( NIGERIAN TYPE OF PRIVATISATION) before signing documents that will allow a company Operate in Nigeria.  Which forward thinking Company will pay such outrageous amount.

@Gbawe,
You failed to point out which aspect i was 'lying'. Was it that Obj didnt go to London to canvass for investors or didnt he send emissaries to top international telecom firms esp Vodafone? Perhaps its the fact that leading companies have always shunned Nigerian companies that constitutes a lie right? So why not tell us how many top companies have had their attractive bids rejected, tell us how many have even bothered to place bids for any company.

Beaf:

You obviously love the sound of your own voice, even to the extent of crudely accusing others of lying. I'm wondering what you are going on and on for, anybody listening to you would think you were the one that advised GEJ that the privatisation methods govt uses need straigtening out, because they don't work.

Is there anything new you are bringing to the table? No, its just the usual partisan dust. If you want to oppose for the sake of it, why not argue that privatisation was successful, instead of daftly reading GEJ's arguments back to him as if they are original to you.

Dude , get lost.  You are a clown . Stop following me around with the intention of derailing threads mischievously . I have proven, countless times, you are simply an 'Olodo'. Leave this thread and let informed folks discuss free of your shameless and bellicose need to seek attention .

Gbawe:

Dude , get lost.  You are a clown . Stop following me around with the intention of derailing threads mischievously . I have proven, countless times, you are simply an 'Olodo'. Leave this thread and let informed folks discuss free of your shameless and bellicose need to seek attention .

Lol!
"Stop following me!" "Leave this thread!". . . I wonder if you realise how you sound? Like a hunter desperately grasping at rats.

Have you worked in a motorpack at some point in life? Sad.

wesley80:

@Gbawe,
You failed to point out which aspect i was 'lying'. Was it that Obj didnt go to London to canvass for investors or didnt he send emissaries to top international telecom firms esp Vodafone? Perhaps its the fact that leading companies have always shunned Nigerian companies that constitutes a lie right? So why not tell us how many top companies have had their attractive bids rejected, tell us how many have even bothered to place bids for any company.

You lie with this statement ;

What we should be asking is whether or not our market is good enough to attract the so called international players.

Nigeria can be one of the greatest destination of FDI , and many top analysts concur likewise, if our FG gets it's act together. It is lame for anyone to talk as if FG culpability is neglible in looking at the big picture as per why World class Companies shun Nigeria. It is far easier to ask which top Companies are absent in South Africa than to attempt to list those who are present. Direct testimony to prop up an example of what Nigeria should be yet deliberately and self-injuriously rejects to be .

You think World Class Companies don't pay enough big bucks to specialists who can pick up the nuances that show, despite noise to the contrary, that a Nigerian Government is not sincere ? Where other Nations  may have laid the ground rules down for Halliburton, Wilbros , Siemens et al what did we present them with other than Carte blanche to do as they please with Nigeria as long as 'awon boys' got sorted ?

Even now, compare the sanction Siemens, Halliburton et al have received in their home nation for their actions in Nigerian while we , the victims, are happy to let them "bow and go". GEJ, like Yar Adua and OBJ, can send 1000 emissaries , one after the other, across the World to solicit the patronage of World class Companies. Nothing will change and Nigeria will not be a more attractive investment destination if those Companies do not see anything in the actions of GEJ that demonstrates a move away from the cynical practices Nigeria is known for .

^
Poor thing.
---Beaf breaks down in tears, weeping profusely for "you know who."--- LOLZZZ!!!

I wonder what it feels like to take a mans arguments, recite them right back to him and wonder if people think you are clever or honest?
Damn!

ekt_bear:

There is a saying (from Voltaire, it appears), "The perfect is the enemy of the good."

There are four options:
1) Gov't holds on and mismanages/destroys
2) Gov't sells to incompetent crony
3) Gov't sells to competent crony
4) Gov't sells transparently and world-class buyer buys

#4 is of course best. But #3 is nearly as good, [/b]and a helluva lot better than #1 or #2. You feel me?

Demanding perfection in Nigeria. . . well, I'm a bit jaded, hehe. I just want a country that works reasonably well.

What are you talking about ? When has this ever happened i.e government selling to "competent" cronies? That is an oxymoron in case you have not worked out how things work in the desire for some to control our wealth. Please show one example of a "competent crony" in case I am Ignorant . You argued in favour of Otedola without telling anyone why he is best placed to be run a refinery. This is the problem with overt and consumate focus on capitalism. [b]Moral questions , regarding the need to keep expertise and processes purist ,  tend to become irrelevant for some folks . Why should Otedola own a refinery when those who , over many decades, have excelled at refining crude oil , and have shown an interest, are denied a fair chance to have their tender considered meritoriously ?

No one here has argued that he is 100% the best qualified to run it. But he will do a good job, and try to run it profitably (in my opinion.) Will he make as much profit as some big international player? Not necessarily. But the refinery will be viable and functional, not dead.

I'm just trying to be practical here. You can be a purist if you like. . . you are certainly entitled to that pov. But for me the end result is what matters. . . a somewhat functional country.

To be clear, #4 is my first choice. But I'm sure there is some little kid out there who wants a pony for Christmas. Neither of us is likely to get what we want. Sometimes you have to settle for the second best.

Is he admitting that OBJ failed? I think the way it was carried out was what failed and not privatization in itself.

ekt_bear:

No one here has argued that he is 100% the best qualified to run it. But he will do a good job, and try to run it profitably (in my opinion.) Will he make as much profit as some big international player? Not necessarily. But the refinery will be viable and functional, not dead.

I'm just trying to be practical here. You can be a purist if you like. . . you are certainly entitled to that pov. But for me the end result is what matters. . . a somewhat functional country.

To be clear, #4 is my first choice. But I'm sure there is some little kid out there who wants a pony for Christmas. Neither of us is likely to get what we want. Sometimes you have to settle for the second best.

My brother stop obfuscating issues. Surely you cannot be suggesting that "the giant of Africa" and the "biggest black Nation on earth" possessing some of "the most intelligent human beings on Earth" should begin to settle for untested cronies with no history of core expertise in fields where 'trial and error' should not (for many serious Nations) even be a consideration?

I ask you again ;  what qualifies Otedola to run a refinery ahead of others who have signified an interest and actually possess the historically relevant record of success in the Oil Refinery sector? You think Ghana could not have settled for Kwame telecoms (perhaps owned by Jerry Rawlings cousin) when they chose Vodafone? No doubt some too , as you now do, will argue that Kwame telecoms could have done a good job yet smart and uber ambitious money , the type that builds a great nation that is the envy of others, would still go with World class Vodafone that is gamble free with how it is tried and tested.

So in other words, you want "perfect" rather than just "good."

You are entitled to that opinion, that is fine. I just hope you won't be waiting forever for perfection rather than accepting "pretty good" today.

Regarding Otedola and his potential bid to acquire a refinery, I doubt he'd just do it by himself randomly w/o bringing in the appropriate partners/experts to execute the project with. After all, he isn't quite a fool.

You'd also reject Warren Buffett for example investing in a Nigerian refinery, due to his lack of experience in the refinery business too? Heh

Imo, selling to Otedola is different from GEJ selling it off to his driver, housekeeper, wife's hairdresser or something. One has at least a track record of success in business.

Anyway, let's agree to disagree.

EDIT: than->from

Gbawe:

Irrelevant my brother. Point is that OBJ should not concede any refinery to Otedola while other World class refining outfit have signified an interest. This is a direct analogy of why privatization does not work in Nigeria whereas it is superb elsewhere.

[size=24pt]Cynical self-interest always leads the President of the day to embrace selfishness .[/size] Vodafone has taken over Ghana Telecom. I don't need to show you that Vodafone is a world class outfit . Despite the noise surrounding the deal itself Ghanaians are now better off for having Vodafone around because Vodafone broadband browsing is excellent and comparatively good value .

I can tell you , as someone working with the reality on the ground, indeed what matters to ordinary citizens most , that Vodafone browsing is far better than anything I have experienced in Nigeria. If we had been similarly placed, I will bet that Vodafone would not have emerged as the replacement fo NITEL . Instead it will be some "Rockford telecoms" ( probably a conduit registered yesterday for use by OBJ, GEJ, Anenih and 'awon boys').

good points by Gbawe as usual. Thank you.

Gbawe:

Nigeria can be one of the greatest destination of FDI , and many top analysts concur likewise, if our FG gets it's act together. It is lame for anyone to talk as if FG culpability is neglible in looking at the big picture as per why World class Companies shun Nigeria. It is far easier to ask which top Companies are absent in South Africa than to attempt to list those who are present. Direct testimony to prop up an example of what Nigeria should be yet deliberately and self-injuriously rejects to be .

You think World Class Companies don't pay enough big bucks to specialists who can pick up the nuances that show, despite noise to the contrary, that a Nigerian Government is not sincere ? Where other Nations  may have laid the ground rules down for Halliburton, Wilbros , Siemens et al what did we present them with other than Carte blanche to do as they please with Nigeria as long as 'awon boys' got sorted ?

Even now, compare the sanction Siemens, Halliburton et al have received in their home nation for their actions in Nigerian while we , the victims, are happy to let them "bow and go". GEJ, like Yar Adua and OBJ, can send 1000 emissaries , one after the other, across the World to solicit the patronage of World class Companies. Nothing will change and Nigeria will not be a more attractive investment destination if those Companies do not see anything in the actions of GEJ that demonstrates a move away from the cynical practices Nigeria is known for .

So do you agree that 'World class companies' have repeatedly shunned Nigerian companies and ignored our privatization programs? The 'why' is another topic entirely. Now if you agree that world class companies are averse to our privatization programmes, what do you suggest? Further privatization? Perhaps the unfavorable conditions are now favorable right?

wesley80:

So do you agree that 'World class companies' have repeatedly shunned Nigerian companies and ignored our privatization programs? The 'why' is another topic entirely. Now if you agree that world class companies are averse to our privatization programmes, what do you suggest? Further privatization? Perhaps the unfavorable conditions are now favorable right?

See what happens when you talk like a gentleman rather than a blind apologists ? you actually sound intelligent and like a Nigerian involved in the search for solutions. Further Privatization is indeed my submission but only if guided by political will that will ensure , as seen across Africa, that we do not gain 'mutton dressed as Lamb'. [/b]This was one of the reasons why I did not want a PDP President in Aso Rock in the first instance. The PDP is only able to birth 'pseudo-privatization' that is just a glorified get-rich-quick scam ,[b] for it's affiliates, rather than a sincere effort to concede important and mismanaged Government parastatals into competent private hands.

Please do not believe the garbage you are fed by those who want to keep things as they are. If you are ever in the position of introducing a business model to Nigeria you would understand, totally, what I am talking about. The 'egunje' culture, deliberately encouraged by the Government , is totally pervasive and off-putting to all but the most unscrupulous of players.

100% transparency , sincerity and total reform of our Institutions  , which GEJ and others before him have been unwilling to commit to , is the way forward. If any of you , even with our challenges , think that World class Companies , conditions permitting ,  would not be eager to get their foot in the door of a Nation , on paper, predicted to still possess preposterous investment and growth prospects , then please let me point you to someone who will sell you a flat in London for £900.00 !!!

^
GEJ has said everything you are saying. So whats new?
I bet you are simply reading the article or scouring the web for what GEJ said and then reciting it right back in "outrage."

. . .Tiring.

It is the Nigerian way of privatization that has failed.

otokx:

It is the Nigerian way of privatization that has failed.

Simple. When we cannot even admit that to ourselves then what hope for the future? GEJ is clearly attempting to use fraudulent premises to renege on the promises of Privatizations made. I don't think we need to belabour what GEJ said in regards to his ethos of privatization. This announcement is simply consistent with hypocrisy and double-standards first typified by how GEJ directed that the home of corruption NNPC be given 2 years to turn around our Refineries Who expected that announcement before the elections?

It is really sad when those who cause our problems pretend to be part of the solution. Below , in 2010, GEJ assured that the FG will keep away from power Generation and distribution. Guys, make una tell me which Government just dey approved massive contracts for power everywhere cluelessly and in direct contravention of a so-called "masterplan".


http://234next.com/csp/cms/sites/Next/Home/5568523-146/jonathan_promises_to_privatise_power_sector.csp

Jonathan promises to privatise power sector

December 23, 2010 07:27AM
Print print Email email Share Share


Nigeria will privatise electricity generation and distribution next year in a bid to solve the power crisis in Africa's most populous country, President Goodluck Jonathan said on Friday.

Nigeria's power problem, one of the main brakes on economic growth in Africa's most populous country, has become so severe that much of the nation can go without mains electricity for weeks, forcing residents to rely on private generators.

"Next year, the federal government will no longer be involved in the generation and distribution of power, but only in transmission," Jonathan said during his presidential visit to the oil hub Port Harcourt.

"There is no point in generating power if you cannot distribute."

Nigeria has been keen to raise domestic power generation through independent power projects, but the lack of a strong regulatory framework has attracted little new private sector investment.

Jonathan, who was joined by Speaker of the House of Representatives Oladimeji Bankole, said he would work to change any legislation that inhibits the development of the power sector.

The world's eighth largest oil exporter has the capacity to generate around 3,000 megawatts, but generation often plunges to below half that amount, largely due to a lack of maintenance at power stations. South Africa, with a third of Nigeria's population of 140 million people, has over 10 times the capacity.

Nigeria wants to increase electricity capacity to 10,000 MW by the end of next year and has earmarked hundreds of millions of dollars in the 2010 budget to fund power projects.