Nigeria: the rich profit from Obasanjo's privatisation plans as the workers get poorer

We are publishing an article sent to us from the Editorial Board of the Nigerian Marxist journal, the Workers' Alternative and is to be published in the next edition of their paper. It argues the case against the privatisation plans of the Obasanjo regime and poses the need for planned economy in Nigeria.

The following article was sent to us from the Editorial Board of the Nigerian Marxist journal, the Workers' Alternative and is to be published in the next edition of their paper. It argues the case against the privatisation plans of the Obasanjo regime and poses the need for planned economy in Nigeria.

Privatisation in the ordinary meaning is the State Policy whereby State-owned companies are sold out to private individuals. In other words, it is the process whereby collectively owned properties are auctioned out to the moneybags, who naturally are the ones that can afford effectively the cost of such ventures.

Presently in Nigeria, the Obasanjo regime is carrying out wholesale privatisation of Government-owned companies, many of which function to provide social services like electricity, water, telecommunications, transportation, petroleum products, recreational facilities etc. The arguments proffered as reasons for the on-going sales of these companies are apparently not tenable in the fairest sense.

IMF Agenda

However, it needs to be mentioned that the regime is merely carrying out the policy of privatisation under the dictation of the International Monetary Fund (IMF). The IMF is the imperialist agency that fronts for the numerous foreign creditors of the Nigerian Government viz., the Paris Club, the London Club, among others. The agenda of the IMF is to push the Nigerian government to drastically reduce spending on so-called 'unprofitable' social services, so that more money can be available for the servicing of the over $30 billion foreign debts - and also to be better placed for the procurement of more loans.

According to the Bureau of Public Enterprise, the body in charge of the auction sales of the public properties, in its mission statement:

"The primary goal of the privatisation and commercialisation programme of the Federal Government of Nigeria is to reduce the dominance of the public sector in the economy and allow the private sector to play its proper role as the leading engine of growth. Over time, through direct massive investment and participation, Nigeria has developed a large public enterprise sector. As at May 1999 the Federal Government investment in these public enterprises was in the region of US$100 billion.

"In spite of these massive investments, however, public enterprises have woefully failed to perform the functions and attain the objectives for which they were set up. The gross failure of these enterprises to live up to expectations is partly responsible for the current move towards economic liberalization, competition and privatisation".

Whose Fault?

There is no doubt that over the years billions of dollars have been spent on public enterprises like NEPA, NITEL, Health and educational institutions, recreational facilities like the Stadia, National Theatre, among others. One side of the story is that this spending comes from the collective money extracted as taxes from the sweat of the working masses and from the sales of naturally endowed resources extracted by the labouring masses, especially crude oil, agricultural products etc.

Another side of the story is that the 'inefficiency' of these enterprises as widely acknowledged even in government parlance is due to long term neglect by the successive capitalist governments in Nigeria, both civilian and military regimes. Over the years, majority of these enterprises became inept because of lack of required serious funds for the maintenance of existing facilities. In the same vein, funds are not made available for the expansion of such facilities, in order to meet up the demands from an ever-expanding population.

Many examples of such cases of neglect are quite glaring before our eyes. NEPA, the electricity company, for example, has suffered abandonment in terms of required funding; to the extent that transformers and overhead cables which, according to the manufacturers' specification, have been due for replacement twenty years ago are yet to be replaced. The same goes for the generating stations, which for many years have degenerated in the face of disrepair. The problem with NEPA becomes even bigger in the face of the fact that the Obasanjo regime's claim of spending almost one billion dollars (over N100billion) has not resulted in any appreciable increase in the efficiency of NEPA.

The story of the Nigeria Railway Corporation is another pathetic one. The collapse of the Railway over the years has reduced what used to be the biggest mode of transportation, and the largest employer of labour, in Nigeria, to almost a naught. No serious investment has been put into the Railway in the recollectable past; the single rail-track that linked the south to the north, built during the colonial days is yet to be improved upon. The same goes for the other infrastructures in the industry. The massive lay-offs that accompany the collapse of the Railway have further compounded the unemployment crisis in society.

This is the situation with virtually every enterprise being listed for auction sale. The government under-funds, runs them down, and claims that no other alternative exists other than selling them cheap to private owners, who have a common interest with the ruling elite.

The Ruling Class Should Take Responsibility

Contrary to the hypocritical mission statement of the B.P.E., quoted above, it is the endemic under-funding that breeds corruption in the aforementioned enterprises. Moreover all the Management Boards of these enterprises were appointed by the government, past and present. And of course, the bulk of officials-cum-policy makers of the past also occupy the present government. In other words, the quote is a self-indictment on the ruling elite and other government personnel.

On the other hand, the B.P.E statement further confirms the long-time assertion of Marxists, organized around the Workers' Alternative, that official bureaucratisation pulled the life out of these enterprises. However, the alternative is not to sell them cheaply to the capitalist private hands. But to put the control of these companies under the democratic control and management of workers; where their resources can be utilized for the advantage of the whole of society rather than for the private pockets of individuals.

Who benefits from privatisation?

Quite commonly major roads are posted with billboards sponsored by the National Council on Privatisation deceptively saying that " the people benefit as the nation privatises". The question however is: who are the people that actually benefit from the privatisation programme? Certainly, not the ordinary people and workers of the sold companies - who have subsequently lost their jobs, and left their numerous dependents with a bleak future.

No doubt, friends of Obasanjo and Atiku are the prime beneficiaries of the privatisation exercise. Speculation is plentiful as per individuals fronting for key Government personnel in the sell-off proceeds. Recently, the National Assembly on the motion for impeachment of the President, revealed that Gbenga Obasanjo, his son, is a major contender for the purchase of the Mint Company. This is also the case with Alico Dangote, the billionaire merchant who donated heavily to the Obasanjo Campaign Fund in 1999; but has now bought the government's Benue Cement Company.

On the other hand, the mass of workers and the ordinary people stand to lose out from the privatisation programme. For one, the driving force of private ownership is maximisation of profits. With this in mind, the immediate concern of the buyers of the newly privatised companies will be to cut down overhead costs. The first casualties will be workers of the affected companies, who will lose their jobs in droves, and their numerous dependents who stand to suffer thereafter.

In the same vein, the poor people in the society also stand to be the final losers. For one, the production and distribution polices of private ownership is to be geared towards maximum profit making, and not necessarily towards the needs of the people. The implication of this is that, availability of products and existing social services like electricity, water, telecommunications, health, education, petroleum products, agricultural fertilisers, recreational facilities etc., presently been produced/offered by the concerned public-owned enterprises, will now be offered at very high cost to the public. And of course to the deprivation of the ordinary people in the society, who apparently will not be able to afford such highly provocative costs.

This means that these products may be 'available' but will be mainly not affordable. If for example, a privatised N.E.P.A. comes into being, it is not ruled out that electricity supply may be more regular than now, to those who can pay but the mass majority will left be out. Your next door house may be connected, while you will be in perpetual darkness not because there is no 'light', but because you cannot afford to be connected. Already in a number of cases this is taking place. Telephone lines exist in some places unconnected because the cost of obtaining one is rather prohibitive. The miserable experience with maintaining a GSM line also comes to light here. Many ordinary people are already exempted from the 'GSM CLUB' because of the high cost of maintaining a line; many stay connected only to receive calls but cannot afford to make calls!

Miserable Experience In Other Countries

Moreover it is important to state, without fear of contradiction, that contrary to the impression being passed around, experience with privatisation in other parts of the world is not as rosy as is being painted here.

For example, in Great Britain, experience with the privatisation of the British Railway is now generally acknowledged to be a miserable one. Very commonly avoidable disasters regularly occur; the new owners care less to maintain facilities required for adequate security against accidents, promptness of trains at the stations, among others.

The situation was so bad that in the last Mayoral election in the year 2000, that we witnessed a massive turnout of voters against the Government's candidate who supported privatisation of the underground train services, leading to the election of an independent candidate, Ken Livingstone, who was earlier rigged out of the nomination process in the Government's Labour Party because he was against direct privatisation.

The Russian Debacle

In Russia, the introduction of wholesale privatisation of the hitherto nationalised economy has not led to new glorious havens as earlier promised by the apologists of capitalism. Instead Russian society is now witnessing a scandalous transformation into barbarism, characterised by increasing destitution; high rate of unemployment; voodoo economy, that is driven by the Mafia; unprecedented violent crime rate and a hopeless future for the vast majority in society.

The problem with the nationalised economy in Russia, as with other Stalinist misnamed-communist Eastern European Countries etc., was the bureaucratised mode of control of these economies, that is completely strange to the idea of communism, as outlined by the founding fathers of Marxism. What was required to save the situation then, was the revolutionary overthrow of the then ruling bureaucrats, who were anything but communists. With subsequent introduction of Workers' Democratic control and management of the nationalised economy, and not the counter-revolutionary return to capitalism, which is now a misery for the Russian workers and the poor.

All over the world, the policy of privatisation has been a disaster for society from one country to the other, being miserable for the working class and the ordinary people. Incidentally, this has also led to massive revolts against the policy and the various governments who introduced it. The situation in Argentina; Indonesia; Pakistan; South Africa; Ecuador, among others, are pointing examples of such revolts.

Collapse Of Private Companies

In related development, many private enterprises, worldwide, are facing enormous crises; recording monumental collapses and revelation of fraudulent practices. This is particularly exemplified by Enron, Arthur Andersen, Worldcom, the previously privatised but now bankrupt Swiss Air etc. This goes a long way to show the real meaning of privatisation, and how it will turn out in future - lay-off of the workers of the privatised companies and loss of life-long savings of ordinary people invested in their stocks.

Opposition Is Growing

Interestingly in Nigeria, there have been some pockets of opposition to the on-going privatisation process. Although, it is yet to be transformed into a major all-encompassing movement, it is already building up. So far, workers of some of the affected companies are rearing opposition to the privatisation agenda. This especially includes the NITEL and NEPA workers.

The NEPA workers are particularly militant it their opposition. Earlier in the year; after a strike notice, action was due to commence if the agenda to privatise NEPA was not withdrawn. The strike, however, didn't commence because B.P.E took the Workers' Union to the law Court, where a reactionary injunction was granted against the strike action commencing. In a similar development, NEPA workers in Lagos, during the May Day rally demonstrated with coffins proclaiming the death and burial of Obasanjo's Privatisation agenda.

Incidentally, at the highest level of law making, the National Assembly, there has been open criticism against some aspect of the privatisation exercise. The House Of Representatives even went to the extent of passing motions against the privatisation of some enterprises, and placed adverts, expressing such, in some international magazines. This development is a mere reflection of the underlying restive mood, expressing itself as an open conflict at the top, which should be seen as a prelude to a major protest movement from below.

Collaboration Of The NLC Leadership

The most unfortunate scenario, however, is the open collaboration of the leadership of the Nigeria Labour Congress (NLC) with the Obasanjo regime in its anti-worker privatisation agenda. The NLC President, Adams Oshiomhole, along with other Labour bureaucrats, is a key member of the National Council on Privatisation, under the chairmanship of the Vice-president, Abubakar Atiku. Worst still, NLC secretariats serve as selling centers for the privatisation forms!

The above situation has subsequently placed the Leadership of the Congress on the other side of the barricade, against the interest of the working class, which they are supposed to be representing.

Build The Campaign Against Privatisation

It is therefore deducible from the enumeration above, that ultimately the on-going privatisation exercise is antithetical to the interest of the labouring masses in society. To this extent, all hands must be on deck in the campaign against the on-going agenda.

There is no room for double-dealing or vacillations as is presently the case with the NLC leadership. The firm and militant position of the NEPA workers (members of the National Union of Electricity Employees - NUEE) against the privatisation of NEPA is commendable. However, we must add that the doctrine of 'full commercialisation' , as being canvassed by a section of the NUEE , to replace the privatisation agenda is equally off the mark. The idea of 'full commercialisation' presupposes the fact that tariffs must be geared up, towards making profits at the expense of the poor who will not be able to afford the prospective high tariffs.

We must take up the issue from the fundamentals. For one, the essence of governance is traditionally the provision of social services for the populace, this cannot be rationalized otherwise. What is required is serious funding of the ailing companies to revive their state of dilapidation, and their management placed under the democratic control of the workers.

To this extent, what is required is for the NLC to take up the campaign against privatisation totally; No halfway measures. The campaign must entail the demand for an immediate halt to further privatisation; the renationalisation of the already privatised enterprises and indeed, the nationalisation of the topmost 100 companies, all placed under the democratic management and control of the workers and the majority of poor in society. This is the path of progress, the privatisation alternative will only end up in misery for the vast majority in society.

September, 2002