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Privatisation
A continuos challenge offering so much potential for investors and government
Years of neglect have caused public sector enterprises to fall into a condition of disarray, and a broad programme of privatisation is now seen as an essential tool in the reinvigoration of both the public sector and the Nigerian economy as a whole. Building on work started by his predecessor, President Umaru Musa Yar'Adua is continuing to pursue a programme of privatisation, with mixed levels of success. Since 1999, Nigeria's privatisation programme has been governed by two bodies. The National Council of Privatisation (NCP) oversees and approves policies on privatisation, while the Bureau of Public Enterprises (BPE) carries out the privatisation process.
Privatisation under Previous Administrations
The first privatisations took place at the start of the 1990s, while Nigeria was still under military rule. General Ibrahim Badamasi Babangida's government brought in a structural adjustment programme, but this round of privatisation involved only a few commercially viable enterprises.
In July 1999, President Obasanjo's government oversaw a more wide-ranging programme aimed at tackling those state-owned enterprises that suffered from 'excessive bureaucratic control or intervention, inappropriate technology, gross incompetence and mismanagement, blatant corruption and crippling complacency'.
Most of the 1'000 enterprises involved in this round of privatisation required annual subsidies to remain operational. Tax exemptions and soft loans that were never repaid more than doubled the cost to the national treasury, with estimates from the Adam Smith Institute suggesting that the Nigerian Ports Authority, for example, cost the government USD558m between 2000 and 2003 in subsidies and other lost revenues.
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