0lumide: OBJ's campaign for privatization started as soon as he came in to office in 1999. I think 13 years is more than enough to access the the effectiveness of economic policies.

As for me, privatization will concentrate the common wealth of the nation in the hands of a few. If not, how can Mrs Alakija, Oduah, Danjuma and all these oil well thieves get wealthier? Save Mrs Alakija who's father is very very rich, I don't see how Stellah Oduah, Adenuga, Danjuma and many other oil well thieves can justify their claim to Nigeria's common wealth if not for "privatization" wrapped up with privatization

The only reason the above mentioned people are able to corner the nation's wealth is because of privatization. How is Danjuma able to have more oil well than South Sudan if not for privatization coupled with corruption?

Privatization in the oil sector is nothing but giving the nation's natural wealth to few. Nigeria is not ripe for privatization. The gap between the rich and poor is too wide for such economic policy. It's better for government to control wealth than for individuals to.

Nigerian government is used to changing a good policy instead of probing the corruption of those in office.

Nairalanders, how can we access the effectiveness of privatization in since 1999?

My own analysis goes as follow:

minimum wage is 18k. Now, lets say gari is one of our natural resources and the federal government decides to privatize/deregulate gari sector. Let's say Dangote and adenuga bought licenses to produce gari. Now, gari is a common household commodity for all Nigerians rich and poor. This means the demand for gari is very high for a population like Nigeria's. Since the demand for gari is high, and whether the price is high or low, people will have to buy gari to go about their daily business, it means that the producers Dangote and Adenuga can increase the price of gari without fear of a drop in demand for gari. The demand for gari is inelastic but supply can be. Any economist will tell you that high demand equals high price and even higher if demand is inelastic. Now, if Dangote cuts gari supply and Adenuga does the same, Price goes up and even when both suppliers return to normal supply quantity, price will remain the same because the demand won't change!

in 18k/month minimum wage economy, should there be a cap on what price of gari should be? if so, why deregulation? It's human nature to seek benefits and we can't blame the private sector for seeking more profit even if it means Nigerians won't survive.

replace gari with oil and you'll understand why deregulating/privatizing the oil sector is bad for an emerging economy like Nigeria's. since oil is a needed commodity for 95% of Nigerians, both direct and indirectly, Nigerians will spend more money on oil and there will be less money for other commodity which means many other sectors of the economy will die because of high price of a necessary commodity.

The reason many sectors will suffer the oil price increase is simple and can be explained as follow: Oke gets 18k/month, before fuel price increase, Oke spend 3k/month on transport, 2k/month on refreshment... The money is divided into different uses giving revenue to different sectors of the economy. Now, after fuel price increase, Oke uses 7k/month on transport. The money for transport will have to be gotten from money used for other stuffs meaning Oke will have to stop spending or spend little on some things to make up for transport. Oke's situation is same for all Nigerians who don't get wuru wuru money (95% of Nigerians). Now, because of Oil price increase, other sectors will get little revenue killing the sectors and jobs provided by those sectors. All this because the government is not willing to take on it's responsibility to the people of an emerging economy. No emerging economy can survive with deregulation and privatization unless credit is pumped into it. But why borrow when you can make do with what you have with the right policies?

I asked, what has privatization done for Nigeria since 1999? it is killing the middle class, the lower class has taken to crime for survival, poverty has ravaged the land, minds of the youths are idle because their brilliant ideas aren't given chance to manifest as their intuitions desires. What do we get with privatization? The rich gets richer and the poor gets poorer.

All the American mugus that want Nigeria to copy the "american way" should also note that the gap between the rich and poor in the USA has widen over the years. And America is the chief supporter of privatization. Their rich are getting richer and poor getting poorer too. Again, unless credit is pumped into it. So are we suppose to hand our future generations over to bankers simply because privatization is being touted by some rich and mighty folks? Let's do what's right for this nation.


This is not an article. Thanks

Jarus: Privatization success stories:

Oando - formerly owned by government as unipetrol. Privatized 2002. Now a formidable African brand.

Conoil - from National oil. Now a better managed private concern.

Except those sold to Jimoh Ibrahim (notorious for buying a dying business and speeding the death), most other privatized government businesses have been successful.

And of course, in any privatization exercise the world over, new millionaires would be made.


I spent 4 years in Oando before moving on. Without privatization, I may never have had the opprotunity to work in that company. When run by government, merit was a taboo. Just another government-owned business to place children, relatives and tribesmen of those in authority.

Krucifax: Your opinion is thoughtful but fundamentally flawed! The summary of your write up is this "Do not privatize because of unfair monopolies and business practices,government should therefore retain all control!"

To understand why this ideology is flawed all you need to do is look at nations that have tried it i.e CUBA.
This concept you suggest stifles enterprise,kills creativity,is highly inefficient and ensures a lack of progress in any society it is implemented!

I see you have some understanding of Economics in your reference to elasticity, then you must surely also know that investors and ventures capitalists(the life blood of economic growth) run away from countries with overbearing government control on business.

Privatization is the exact opposite of what you have written about. Privatization as opposed to Nationalization is the concept that actually ensures economic growth.
Privatization ensures competitiveness and efficiency (as companies fight to out do each other for market share).
Privatization ensures innovation.
Privatization "generally" ensures minimal political collusion and profiteering.
Privatization increases revenue to government in the form of tax and license receipts.
Privatization "should" lead to lower prices as a result competition and market share scaling by companies.
Privatization "should" ensure better standard as Nationalization means govt regulating themselves (very bad idea).

Privatization does come with down sides as all things,but these have to be factored in as normal with every economic plan. The problem in Nigeria is not the Privatization per se but the business environment.There are issues with;

Unnecessary bureaucracy
Poor infrastructure
Skill shortage
Little investment incentives
Poor leadership

These need to be addressed,however it shouldn't be done with govt calling the shots because a Politician is not a Business Man!

mayoroflag: The OP is evidently ignorant and giving a dog a bad name. Is OP an economist or financial expert or well read in these matters....?

Krucifax: Your opinion is thoughtful but fundamentally flawed! The summary of your write up is this "Do not privatize because of unfair monopolies and business practices,government should therefore retain all control!"

To understand why this ideology is flawed all you need to do is look at nations that have tried it i.e CUBA.
This concept you suggest stifles enterprise,kills creativity,is highly inefficient and ensures a lack of progress in any society it is implemented!

I see you have some understanding of Economics in your reference to elasticity, then you must surely also know that investors and ventures capitalists(the life blood of economic growth) run away from countries with overbearing government control on business.

Privatization is the exact opposite of what you have written about. Privatization as opposed to Nationalization is the concept that actually ensures economic growth.
Privatization ensures competitiveness and efficiency (as companies fight to out do each other for market share).
Privatization ensures innovation.
Privatization "generally" ensures minimal political collusion and profiteering.
Privatization increases revenue to government in the form of tax and license receipts.
Privatization "should" lead to lower prices as a result competition and market share scaling by companies.
Privatization "should" ensure better standard as Nationalization means govt regulating themselves (very bad idea).

Privatization does come with down sides as all things,but these have to be factored in as normal with every economic plan. The problem in Nigeria is not the Privatization per se but the business environment.There are issues with;

Unnecessary bureaucracy
Poor infrastructure
Skill shortage
Little investment incentives
Poor leadership

These need to be addressed,however it shouldn't be done with govt calling the shots because a Politician is not a Business Man!

Adejoro74:

Like the Babalakin Management Company (Bi-Courtney) which embezzled billions of fed money earmarked for Lagos-Ibadan road,and still remains one of the most respected Yorubaman by Yorubas, abi? You lots are very shameless.

0lumide:
First of all, your Analysis of my analysis on privatization in Nigeria is so flawed, I doubt you read my full post at all. Here is what I will try to explain to you again:
Before we go into your full nonsense of non "privatized" economies being unsuccessful. As successful as the Chinese economy is today, It started first with publicly owned enterprise. It didn't start with privately owned enterprise. Even as China is moving towards capitalism, they are currently practicing state capitalism which is still against fundamental issues of privatization and leavving public amenities in the hands of private owners.

0lumide:
AIG isn't government owned but it is public owned but they are insuring the best insurance policy in North America which is government owned. What stops our rich men from offering management services to oil sector, tel com sector, etc.? You really are not learned in economics at all. If we don't have oil in Nigeria, do you think the government projects will survive on taxes from 18k minimum wage? The government will have to dabble into investments too. And selling public assets isn't a good idea.

0lumide:
Why not use Iran, Libya and China with publicly owned enterprises and a sound economy? Using a straw man's argument to support privatization is just simply flawed and lame. Extremely lame, it gave you off as someone who know nothing about global economy.
Do you know about Sovereign Wealth Funds? Do you know the countries that have SWF? what do you think the money is been used for? China just created MGM resort/casino in Las Vegas publicly owned with China's money. What do you think governments do with SWF? they use it to buy up companies. Is Nigerian economy better than that of China? China is investing in not only China but outside China and they are not private enterprises.

0lumide:

Take for example, a major road needs to be constructed, no private company will be interested in constructing road but Nigerian government can construct the road and toll it making money for the government that way, the road will not only pay itself off in the long run, it will also create revenue adding to our revenue index. Economics have basic theories, nobody said those theories should be copied practice for practice, you need to modify those theories to fit into your nation's economy not lift. That is why an economic policy that worked for America will not necessarily work for Nigeria or Libya or Russia or Sweden etc... You modify it to fit your situation. Learn bro. Don't be bitter.

Krucifax: Mister your rant is lacking in even a basic grasp of Economic principles. But as this is forum for discussion i will tell you why you are incredibly wrong.
Firstly let me introduce myself. I’m a Major of Law first degree and MBA Masters all from London and have worked in two continents in large business and economic capacities. It’s not to blow my trumpet put to into context who you are talking too, and settle your mind so you may learn a thing or two there’s no shame in that buddy,now that’s out the way let’s get cracking!


If you understand economics then you’ll also know a large state (i.e massive govt control)is bad for economic growth. You have inadvertently proved yourself wrong by yourself. You admit China’s move to more liberal forms of business. Also you are confusing state capitalism with nationalization which is what you are suggesting. What China is doing is ensuring Chinese companies get first bite of the pie before foreign investors. It’s still privatization but with a bias for local companies, and not your suggestion public enterprise(whatever the hell that means)


What!!!!! You should really cover your head in shame about the above. AIG for your information is a “multinational” it’s based in different countries. Still answerable to “whoever” (i.e investors)invests in it. And what in God’s holy name has Privatization got to do with 18k minimum wage? No disrespect but you are rambling here no coherence at all!!.


Alas with the above the source of your confusion becomes clear! You seem to have confused the meanings of Privatization, Nationalization and Public Liability Company.
For your information the countries you have listed above are one of the biggest investors in Private Enterprise !! I’m shocked you can even expose yourself by saying this. Did you know that Libya had Billions of pounds invested in the U.K and Swedish Capital Markets and Real Estate(Private Enterprises)?
Same thing with Iran in Russia and China. Why do you think Russia and China constantly veto any U.N Security sanctions by the U.S?



Damn this is where your rant goes from comical to ridiculous. Let me ask you a simple question my friend. Have you ever heard of the term “contractor” or “sub-contractor”??
Using your example above i want you to answer this question if the Nigerian govt decides a road needs building do you not know that it will still give the job out to a “private company”?
What the govt decides to do with the road after the work, toll or not has no basis in this discussion.
Seriously buddy it’s not even discussed at any serious level everybody knows privatization is a tonic for economic growth. Nationalization is always extreme and counter productive and never lasts history is full of the examples. Also i want to leave you with something, you mentioned China a lot using it as an example for Nationalization. I implore you to look again. Whilst this may have been true in the times of Mao Zedong (great China man and champion of Nationalization) it also represents the dark ages of China since all that was reversed China has since become a great world economic power. Not because of Nationalization but because of the opposite, carefully managed Privatization!!!

Krucifax: Mister your rant is lacking in even a basic grasp of Economic principles. But as this is forum for discussion i will tell you why you are incredibly wrong.
Firstly let me introduce myself. I’m a Major of Law first degree and MBA Masters all from London and have worked in two continents in large business and economic capacities. It’s not to blow my trumpet put to into context who you are talking too, and settle your mind so you may learn a thing or two there’s no shame in that buddy,now that’s out the way let’s get cracking!


If you understand economics then you’ll also know a large state (i.e massive govt control)is bad for economic growth. You have inadvertently proved yourself wrong by yourself. You admit China’s move to more liberal forms of business. Also you are confusing state capitalism with nationalization which is what you are suggesting. What China is doing is ensuring Chinese companies get first bite of the pie before foreign investors. It’s still privatization but with a bias for local companies, and not your suggestion public enterprise(whatever the hell that means)


What!!!!! You should really cover your head in shame about the above. AIG for your information is a “multinational” it’s based in different countries. Still answerable to “whoever” (i.e investors)invests in it. And what in God’s holy name has Privatization got to do with 18k minimum wage? No disrespect but you are rambling here no coherence at all!!.


Alas with the above the source of your confusion becomes clear! You seem to have confused the meanings of Privatization, Nationalization and Public Liability Company.
For your information the countries you have listed above are one of the biggest investors in Private Enterprise !! I’m shocked you can even expose yourself by saying this. Did you know that Libya had Billions of pounds invested in the U.K and Swedish Capital Markets and Real Estate(Private Enterprises)?
Same thing with Iran in Russia and China. Why do you think Russia and China constantly veto any U.N Security sanctions by the U.S?



Damn this is where your rant goes from comical to ridiculous. Let me ask you a simple question my friend. Have you ever heard of the term “contractor” or “sub-contractor”??
Using your example above i want you to answer this question if the Nigerian govt decides a road needs building do you not know that it will still give the job out to a “private company”?
What the govt decides to do with the road after the work, toll or not has no basis in this discussion.
Seriously buddy it’s not even discussed at any serious level everybody knows privatization is a tonic for economic growth. Nationalization is always extreme and counter productive and never lasts history is full of the examples. Also i want to leave you with something, you mentioned China a lot using it as an example for Nationalization. I implore you to look again. Whilst this may have been true in the times of Mao Zedong (great China man and champion of Nationalization) it also represents the dark ages of China since all that was reversed China has since become a great world economic power. Not because of Nationalization but because of the opposite, carefully managed Privatization!!!

Adejoro74:

Like the Babalakin Management Company (Bi-Courtney) which embezzled billions of fed money earmarked for Lagos-Ibadan road,and still remains one of the most respected Yorubaman by Yorubas, abi? You lots are very shameless.

Akanbi_edu: Saying corruption killed government-run enterprise is an oversimplification of the issue, it is much more complex than that. At the of the problem is ethnic disunity, Nigerians have so much been divided that its almost impossible to rally the people around a common cause i.e fighting corruption. I believe a private sector lead economy reduces the friction that disunity causes in the government.

In recent times, we have heard and read about nepotism in the aviation ministry, immigration and the army. It is like that everywhere in the Federal government. I am not advocating privatizing the Nigerian army thoug, but I hope you understand that privating business-like entities like PHCN, Nitel, Banks etc will help in reducing ethnic tension, create a competitive market which is good for the economy in the long run. A good economy will eventually make Nigerians forget their differences and maybe then we can talk about government having bigger control of the business environment.

A classic example is the case of Nitel. The Nigerian government spent over $20 billion over a period of 28 years only to give us less than one million lines, with very poor service if not non-existent. you needed to be a 'big man" before you can get a Nitel line(Same with PHCN now). But the private in less than ten years were able to provide over 90 million mobile lines investing about just ten billion dollars. Apart from when last did you hear hausa complaining about igbo or igbo complaining about Yoruba in MTN, Econet etc. Private companies most likely will hire based on requirement and not some primordial sentiment. But in government, what we have is a situation whereby a change in government brings about a new set of people trying to reverse what the previous one did or trying to bring "his/her people" to "right" the wrongs of the past.

How long are we going to continue with that?

Krucifax: Your opinion is thoughtful but fundamentally flawed! The summary of your write up is this "Do not privatize because of unfair monopolies and business practices,government should therefore retain all control!"

To understand why this ideology is flawed all you need to do is look at nations that have tried it i.e CUBA.
This concept you suggest stifles enterprise,kills creativity,is highly inefficient and ensures a lack of progress in any society it is implemented!

I see you have some understanding of Economics in your reference to elasticity, then you must surely also know that investors and ventures capitalists(the life blood of economic growth) run away from countries with overbearing government control on business.

Privatization is the exact opposite of what you have written about. Privatization as opposed to Nationalization is the concept that actually ensures economic growth.
Privatization ensures competitiveness and efficiency (as companies fight to out do each other for market share).
Privatization ensures innovation.
Privatization "generally" ensures minimal political collusion and profiteering.
Privatization increases revenue to government in the form of tax and license receipts.
Privatization "should" lead to lower prices as a result competition and market share scaling by companies.
Privatization "should" ensure better standard as Nationalization means govt regulating themselves (very bad idea).

Privatization does come with down sides as all things,but these have to be factored in as normal with every economic plan. The problem in Nigeria is not the Privatization per se but the business environment.There are issues with;

Unnecessary bureaucracy
Poor infrastructure
Skill shortage
Little investment incentives
Poor leadership

These need to be addressed,however it shouldn't be done with govt calling the shots because a Politician is not a Business Man!

0lumide:

First of all, your Analysis of my analysis on privatization in Nigeria is so flawed, I doubt you read my full post at all.

Here is what I will try to explain to you again:

Before we go into your full nonsense of non "privatized" economies being unsuccessful. As successful as the Chinese economy is today, It started first with publicly owned enterprise. It didn't start with privately owned enterprise. Even as China is moving towards capitalism, they are currently practicing state capitalism which is still against fundamental issues of privatization and leavving public amenities in the hands of private owners.

I will tell you an example of some of the most successful public institution.

MPI: The company is owned by the province of Manitoba in Manitoba (public). Investors are allowed to come in but you will have to buy franchise not buy out the company lol. Manitoba Public Insurance (MPI) Has the best insurance policies in North America and are insured by the biggest insurance company in the world(AIG). AIG isn't government owned but it is public owned but they are insuring the best insurance policy in North America which is government owned. What stops our rich men from offering management services to oil sector, tel com sector, etc.? You really are not learned in economics at all. If we don't have oil in Nigeria, do you think the government projects will survive on taxes from 18k minimum wage? The government will have to dabble into investments too. And selling public assets isn't a good idea.

Do you remember Manitoba Hydro? The company Barth Nnaji brough from Canada? Do you think it's privately owned? Manitoba hydro is also a government owned power company in the province of Manitoba. Another telecom company is owned by the same provincial government in Canada and it's called MTS. It's the most successful tel com company in the province. Dude, you have no idea economics dude. You brought Cuba as an example of how public enterprise can go wrong? Why not use Iran, Libya and China with publicly owned enterprises and a sound economy? Using a straw man's argument to support privatization is just simply flawed and lame. Extremely lame, it gave you off as someone who know nothing about global economy.

Do you know about Sovereign Wealth Funds? Do you know the countries that have SWF? what do you think the money is been used for? China just created MGM resort/casino in Las Vegas publicly owned with China's money. What do you think governments do with SWF? they use it to buy up companies. Is Nigerian economy better than that of China? China is investing in not only China but outside China and they are not private enterprises.

I shouldn't be debating you dude. You know nothing of economics.

upper: So wot is the difference between management contract and concessioning. If there is no difference then it might interest u to know that 60% of concessioned public coporation have failed because the concessionaire r interested only on quick profit they will make from the coporation instead of improving facilities on ground. I think privatisation is still the best.

upper: So wot is the difference between management contract and concessioning. If there is no difference then it might interest u to know that 60% of concessioned public coporation have failed because the concessionaire r interested only on quick profit they will make from the coporation instead of improving facilities on ground. I think privatisation is still the best.

kalokalo: It will be unfair competition to set MTN or Glo to compete with Nitel. First, there will be a conflict of interest since the government (through) NCC will regulate itself (Nitel). Also, the government will use taxpayers money (obtained from companies like MTN and Glo) and use it to invest in a competing company (Nitel) Is that fair? Do you think investors (local or foreign) will have confidence competing against the government? Don't you know that government owned companies get better lending rates from banks as they have an implicit sovereign debt guarantee and you believe its fair for them to compete with privately financed (at higher rates) companies?

The government is better off remaining strictly a policy maker / regulator as opposed to regulator and participant at the same time. It inspires confidence in the fairness of the business environment. Additionally, Nigeria's peculiar environment makes government owned enterprises a disaster. It will be plagued by the usual Nigerian factor i.e quota/federal character, corruption, nepotism, incompetent kleptocrats/politicians appointed as managers, the company becomes a piggy bank for the ruling party e.g. NNPC, poor maintenance of facilities to mention a few.

You cannot just appoint managers to run it without having them have a stake in the success or failure of the venture. The only way it may work is if you are able to attract a world-class company willing to invest partially in the company and then cede management to that company without political interference. This is the reason Nigeria's oil industry functions. The IOCs are minority shareholders in the JV companies but they have management responsibility. In any case, the government has no choice as the only way the government can get the IOCS to invest their money in oil production in Nigeria is to cede operatorship. They will NOT put their shareholder's billions under the management of kleptocrats in NNPC/Aso Rock.

A sad reminder that the average Nigerian is not honest or altruistic enough to run a government owned enterprise without looting it, or appointing relatives/friends/ethnic groups as employees disregarding competence,

0lumide:

I gave an example of public company,(MTS) it competes with bigger Canadian tel coms like Rogers, Telus and Bell. It doesn't mean the government will bend the rules for it's own company. Other company have the right to sue if that is so.

kalokalo:

Can you vouch that the scenario you mentioned can work in Nigeria? That it worked in Canada does not mean it will work in Nigeria. To catch you on the bolded above, how much did Nitel pay for its GSM licence when its private competitors paid 285 million dollars? Where can nitel get that kind of money if not from the FG paying itself taxpayers money on Nitel's behalf. In other words, no net gain for the government and an unfair competitive advantage for Nitel.

Additionally, look at the history of public enterprises in Nigeria. What makes you think our attitudes to government property has changed or will ever change? Nigerians treat their personal property better than they treat public property.

A Nigerian will maintain his own private assets but will never maintain public ones entrusted in his care. He will rather loot the money. Look at the issue of the police colleges. Every year, money is appropriated for their maintenance yet they remain in disastrous state. What happened to the monies? Your guess is as good as mine.

Can you vouch that the scenario you mentioned can work in Nigeria? That it worked in Canada does not mean it will work in Nigeria. To catch you on the bolded above, how much did Nitel pay for its GSM licence when its private competitors paid 285 million dollars? Where can nitel get that kind of money if not from the FG paying itself taxpayers money on Nitel's behalf. In other words, no net gain for the government and an unfair competitive advantage for Nitel.

0lumide: How are the privatized public infrastructures doing?

eliment: ignorance is a great disease, privatization is the best form of economics system albeit in Nigeria where it was poorly and corruptly executed none the less it has achieve better results than what communism would ever have a good example is the communication sector I bet 90% of you lots who are here ranting about privatization would ever have been able to do that cos communication would have been mainly for the rich. I also have strong believe that other sector will catch up soon imaging if our power sector had been privatized since year 2000 will it still be all blackout has it is today or which private company would invest #20b without any substantial results