Of privatisation and progress

For various reasons Nigeria has long experienced difficulties running public ventures efficiently and profitably. The country’s critics, at home and beyond, will blame this chronic incapacity on factors like lack of efficient manpower and systemic corruption in the public sector, poor public sector work ethic, low motivation for public sector workers, and a general apathy among public sector workers to excel in the workplace where the receipt of one’s wages and promotion on the job are not necessarily linked to productivity.  And the productivity of any organisation is the aggregate of the productivity of its individual members.

Thus, the productivity of an organisation is directly proportional to the productivity of the individuals it employs. In effect, its productivity increases or declines at the same rate that the productivity of its workers rises or dips. And, by extension, the progress of any nation, especially its social and economic progress, is directly proportional to the productivity of the organisations that employ its workforce whose productivity is in turn directly proportional to the productivity of their individual workers. In effect, the workers are the lowest common denominators of national productivity, the essential drivers of social and economic progress.

However, it is hardly controversial that, to be able to deliver optimum productivity, even the most conscientious worker needs a certain minimum level of encouragement beyond self-motivation and an environment conducive to profitable exertion, besides the necessary push of a competitive organisation – which inspires healthy completion among its workers while also competing with other organisations in the economy in which it is operating, especially those in the same line of business.

It is also hardly controversial that, in Nigeria, a certain lack of orientation toward competitiveness is partly responsible for the low productivity in the public sector, compared to the private sector where such competitiveness is stronger due to the profit motive and a more intense rivalry to gain and control market shares in an environment where survival basically depends on factors such as hard work, output, sales and efficient management of resources, practically a swim or sink environment.

One commonplace and rather symbolic phenomenon should suffice to illustrate how, in Nigeria, the private sector is generally a better manager of resources and ventures intended to produce quality work and yield profit. And I make this illustration to bring a complex idea in economics to the understanding of experts and laymen alike: Quite often we are witnesses to vehicles written off as scrap by public sector institutions are sold to private individuals who proceed to repair them and return them to various forms of productive use, including making them sources of steady income. This illustrates what I call the enhancement of resource utility and productivity through resource migration from public to private hands, which basically informs the business of privatisation as coordinated in Nigeria by the Bureau of Public Enterprises (PBE) and the National Council on Privatisation (NCP), and the inherent profitability of the migration.    

In fact, as the secretariat of the NCP, the summary role of the BPE as expressed in its function of “implementing the NCP’s policies on privatisation and commercialisation” can be summed up as migrating public sector organisations to private ownership for improved management and profitability; for improved results generally.   

One of the areas where such improved results had shown and continue to show is with the privatisation of the power sector, an exercise concluded by the BPE in 2013, which the United States Deputy Assistant Secretary of State for Energy Transformation, Robert Ichord, acknowledged as “the most comprehensive and most transparent transaction in recent history” in his “over 30 years’ experience in privatisation”.  

For instance, before the power sector reform that ushered in the privatisation of the power sector, Nigeria’s peak power generation was roughly 2,800 megawatts. But this value rose to 4,517.6 MW in December 2012, during the reform and while the BPE was fine-tuning the process for the privatisation of the successor companies of the Power Holding Company of Nigeria (PHCN). This represents a 61.3 percent increase in the value of peak power generation in a space of roughly two years (from August 2010 when the power sector reform was launched to the December 2012 date of the new peak generation value).

And there is better news even with the coming of the Buhari era; for, on July 14, 2015, less than two months after the inauguration of President Muhammadu Buhari, Nigeria recorded a new peak power generation value of 4,545 MW. This latter figure of peak power generation and the progress it represents are indications that the past and the privatisation of the power sector it instituted were not wasteful. More importantly, it is a sign that the present bears genuine prospects for hope in the future, that the promised change is not a mirage. It also provides a basis for one to infer that privatisation can be inextricably linked with progress.

Olabisi Adelugba