During the presidential campaign rally of the PDP held recently in Lagos, the front runner and presidential candidate of the PDP Alhaji Atiku
Abubakar reiterated that if he was elected into office, he will privatize all the refineries and make the proceeds of the sales available to fund small and medium scale enterprises as part of his plans to reinvigorate the Nigerian economy. With this move, he will be able to turn assets that have become liabilities and drainpipes on the resources of the country into a pool of funds that will be available to uplift millions of Nigerians out of poverty.
As laudable as the privatization program is, a lot of Nigerians have developed misgivings about it due to politically inspired misinformation and deliberate distortion of facts by those who benefit from the rot in these government-owned enterprises.
The truth is that “government has no business in doing business” and the government’s role is primarily to take care of the security and welfare of the citizens. However, governments all over the world venture into business enterprises for strategic reasons or when certain investments are needed and the private sector doesn’t have the capacity to undertake such investments as was the case with Nigeria when the government built the refineries and many other government-owned enterprises.
As a result of the then weak capacity of our private sector, the federal government justifiably invested over $100 billion in business enterprises between 1970 and 1999. However, owing to the fact that the government is not configured to run business enterprises, most of these enterprises had been run aground before 1999 and had become a major drainpipe on the resources of the federal government.
According to the erstwhile Director General of the Bureau of Public Enterprises (BPE) that was put in charge of the privatization program Mallam Nasiru El Rufai, Nigeria was spending (wasting) over N265 billion per annum to supplement none productive public enterprises.
With the sale of the distressed companies, not only was the government able to save billions of Naira being used to support these none productive companies, the government was able to generate revenues from the asset sales which were put into more productive use for the benefit of Nigerians.
At the tail end of the Obasanjo administration in 2007, the government was able to sell the refineries which for years had been operating far below their installed capacity to a consortium of private investors led by Alhaji Aliko Dangote who had committed to injecting the much-needed funds and managerial competencies needed to turn around the fortunes of the refineries. However, the privatization exercise was short-lived as hawks in the succeeding Yar’adua administration who felt that they would be losing a major source of sleaze if the company was left in private hands were able to convince the president to reverse the sale of the refineries.
The Yar’adua administration then promised to revamp the refineries and get them to start producing at full capacity within a couple of years. Sadly, this was never to happen as the output of the refineries that were then between 40 and 60% installed capacity dwindled regressively until a few years ago when they finally stopped production even after government had wasted billions of dollars on “Turn Around Maintenance” exercises in futile attempts to revamp the refineries. Consequently, we now have to depend on imported products for 100% of our fuel needs. For how long do we continue to use good money to chase after bad investments?
To make matters worse, the current administration now spends over N100 billion a year to maintain the refineries that are not producing any fuel.
Realistically speaking, they have become a drainpipe to the country’s resources because instead of being assets generating income and adding value, they have become liabilities through which the government is losing hundreds of billions of Naira every year.
With the Atiku plan to privatize the refineries and other rundown public enterprises, not only will we save Nigeria billions of dollars used in sustaining these liabilities, the government will be unlocking the value in them by allowing the private sector that is more equipped to run these enterprises to take over them, increase the productivity in the economy and create more jobs for the people while government raises billions of dollars from the sale of these enterprises.
By making these funds available to support the private sector along with a number of other proposed policy initiatives of the Atiku plan, the Atiku administration will be able to create 3 million jobs for Nigerians annually while lifting 10 million Nigerians out of poverty every year into the bargain.
This will also have a positive multiplier effect on those of us who are not unemployed or in the poverty trap as the increased economic activity from the millions of Nigerians now getting employed and pulled out of poverty will mean more patronage for our various businesses and our employers, and more tax revenues for government to pay civil servants even better wages.
The trick is to get our assets to start working for us while turning our liabilities into resources. We can thus empower small and medium-scale enterprises and increase productivity within the economy for the benefit of all. These were part of the policies implemented by the Atiku-led National
Economic Council which resulted in Nigeria becoming the fastest-growing economy in Africa during the Obasanjo administration.
Fortunately, the man who was in charge of our economy during our golden years of economic growth is presenting himself to us and asking that we give him the opportunity to return us to the days of growth and prosperity for all. Let us follow the man who knows the way.
Atiku / Okowa Campaign Organization