Wednesday, 29 July 2015

PRIVATISATION OF PUBLIC ENTERPRISES REFORMS: US$3B of National Resources Identified as WASTAGE on Inefficient Public Enterprises.

Problem: Inefficient and unproductive public enterprises were consuming US$3 billion of national resources annually by way of grants, subventions, subsidies, tax exemptions and so on. They had more than 5,000 board appointments controlling funds in excess of ₦1 trillion.
Reform Actions:
  • Public Enterprises (Privatisation and Commercialisation) Act 1999
  • Establishment of the National Council on Privatisation (NCP)
  • Establishment of the Bureau of Public Procurement (BPP)

    Main Achievements: This policy divested the government of many moribund and unproductive public enterprises that were a drain on the public purse. The privatisation of the telecommunications sector, the divestiture of government interests in hotels and airlines, the sale of federal government houses, and the unbundling of the power sector are perhaps the most notable achievements of this reform. The transport sector reform has greatly reduced the cost of doing business in the Ports and the Power sector reform has been described as transparent and credible. Most significantly the reforms significantly reduced the cost of governance and reduced the red tape associated with government provision of certain services.

    Key Challenges: The early phase of the privatisation exercise was marred by accusations of opacity and a lack of transparency. Although transparency has since increased, there is a need to do more to protect the interest of consumers once services are privatised. 

    Reference:  Public Service Reforms in Nigeria (1999-2014) - A Comprehensive Review

    Click to view Compendium 

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