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Don cautions against sale of nation’s assets

By Roseline Okere   |   07 October 2016   |   2:34 am


Francis Ogbimi is a professor of technology management at the Obafemi Awolowo University, Ile-Ife. In this interview with Roseline Okere,
he objected to the proposed sale of national assets.

Given the controversies it has generated, do you think it is the right to sell off Nigeria’s assets to cope with economic recession?
Aliko Dangote, Africa’s richest man and industrialist’s comments as to what he would do if his company is faced with challenges is correct, because he was talking of himself and his company.

But Nigeria is a nation, which may last much longer than any company and through many generations of people; a nation of about 170 million people. Nigeria has had 13 other governments; some established the assets that one government is thinking of selling.

It will be unwise to literally apply the comment to Nigeria, a nation, because wise people do not manage the affairs of a nation like a company. Nigeria remains a traditional society.

In traditional societies, no child sells the family’s house when he has a problem. Unfortunately, for about 30 years now, since Nigeria adopted the Structural Adjustment Programme (SAP), including its privatisation programme, the economy has been managed like a company.

Nigeria is still implementing SAP today because the economy is still being managed based on the fundamental principles of SAP.

SAP is responsible for the very bad state of the Nigerian economy today.

SAP lacked growth elements and it was only promoting unemployment and poverty and de-industrialising Africa.

The African SAP introduced to many African states by the World Bank and International Monetary Fund (IMF) early in the 1980s had always been sustained by fallacious claims.

Some of the fallacious claims, which the financial institutions and Nigerians used to introduce SAP to Nigeria, were: mandatory devaluation of the African currencies, which make them convertible currencies and improve the balance of payment.

There is also the privatisation (sale of public companies at give-away prices to the rich Africans and foreigners); and deregulation, which create strong private sector and promote growth in African nations.

Implementation of SAPs in Africa was expected to increase aid and foreign investments inflow into Africa; privatisation and deregulation was also expected to eliminate corruption; It was to enable African nations pay foreign debts; and others. Which of these claims turned out to be truth after 30 years in Nigeria? None! Nigeria must not sell public assets anymore. Are there any reasons for continuing with SAP and its privatisation element? None!

Many nations have gone through the process of privatisation. What were European nations’ privatisation experiences like?
Our analysis also examined the experiences of European and Asian nations’ privatisation.

The Conservative Government of Mrs. Margaret Thatcher elected in May 1979, staggered towards the privatisation programme of Britain as they encountered difficulties in financing capital programmes.

There were no scientific studies that showed that Britain and other European nations would be well-off after the privatisation of public enterprises.

British privatisation was the most popular in Europe. European nations followed the decision of Britain to privatise without any intellectual basis that showed that privatisation was the solution to the problems of large deficits and rising deficits and rising unemployment.

The British economy after the radical privatisation programme was in many respects in a worse mess than it was before the privatsation programme.

The bad economic situations in Spain, Portugal, Italy and Greece are consequences of the European SAP. If privatisation left industrialised Europe worse-off, what should a cautious observer expect for the artisan/craftsman economies of Africa?
The African sad experience with SAP was predictable. The wise thing to do now is to stop privatisation in Nigeria and other African nations and embark on efforts that can reflate the economy. That is, employ en-mass all able persons to work, increase the intrinsic values and competences of the individuals and nation to promote industrialisation, create wealth and solve problems.

What do you think the country stands to gain by privatisatising its viable assets?
Learning is the primary basis for promoting competence-building growth and industrialisation. All the great European and Asian nations and the United States of America were village-nations with agricultural/artisan economies like those of African nations today. Our historical research in Obafemi Awolowo University, Ile-Ife, showed that they toiled 2000 to 3000 years before they were transformed into industrialised nations.

European scholars claimed that Western nations accumulated capital and invested and became transformed, because they were brought to believe so.

Nations which invests in structures (roads and bridges, real estate, rail roads, etc.), invests in Depreciating Assets (DAs) and in decreasing investment functions, whereas nations which invest in learning (education and training), invest in appreciating assets and increasing functions, because the learning people appreciate in intrinsic values and are called Appreciating Assets (AAs).

So, the intrinsic value of the learning man may be modeled by any growth function, the compound interest formula as example. Scaling such function and determining the variables at critical state of the function, showed that five learning-related variables determine the state of industrialisation of a nation.

Privatisation promotes retrenchment and decreases these industrialisation variables. The progress of nations has always been characterised by one society learning from a more scientifically advanced one. Britain the first nation to achieve the modern Industrial Revolution (IR), learnt much from the Great Medieval Civilisations of China, India, Arabs and Africa.

America learnt from Britain and Africa. Japan learnt much from European nations and America. Japan in learning from the West built many industries for the citizens to use in learning.

The industrial plants lost money for a long time, but the wise Japanese leaders did not sell the public enterprises till the citizens had acquired sufficient knowledge and skill to set up their own plants and the nation was truly industrialised.

Japan set up a framework for intensive learning which enabled the nation to accelerate its industrialisation in the 20-year period 1886 to 1906, after toiling for the period about 300BC to 1886, about 2200 years.

So, there are no advantages in greedily selling public assets to a few rich people. There are only disadvantages. What Nigeria needs today is to build up industrial infrastructure for learning and accelerating the nation’s industrialisation endeavour.

A Nigerian suggested many years ago that the nation should sell the crude oil in the soil so that Nigeria can pay her debts. The suggestions that Nigeria should sell public assets at give-away prices, prematurely and pay debts derived from lack of knowledge of the development experiences of the great nations of today. Nigeria needs to be careful to make it.

Government has been toying with the idea of unbundling the Nigerian National Petroleum Corporation (NNPC) and the oil and gas infrastructure; how much time is left to get things working well?
Unbundling NNPC will increase the cost of running it. So, NNPC should be left as it is. NNPC’s rottenness is an offshoot of the rottenness of the Nigerian government and a consequence of the idleness of NNPC workers.

An observer once said that NNPC is the organization which the highest number of people with Ph. D. degrees who are idle in the world. Government enterprises should serve as learning infrastructure to promote rapid industrialisation in Nigeria.

NPPC should promote knowledge and skill acquisition in the oil and gas industry. This will reduce the corruption in it.

The private sector is not a substitute for government. The most corrupt government still promotes the interest of all Nigerians than the most efficient private sector.

The private sector does very little to promote national development. Our industrialisation theory shows that there are five learning related variables that determine how healthy an economy is.

The private sector does very little to build-up these variables. European and Asian nations suffered 2000 to 3000 years before achieving the modern industrial revolution because they did not have governments to organise learning for that long.

With the introduction of SAP in Nigeria the rich people took over the nation and began to promote the death of Nigeria. Today, the building industry is complaining that Nigerian artisans in the industry are not as good as those from Benin Republic and Ghana.

Before SAP, artisans in Nigeria used to be graded through trade test. When deregulation and market forces (painlessness and no one is in-charge) replaced government, planning and regulation, trained artisans disappeared.

Wealthy men should build plants to make profit and leave government ones to promote national development. Whereas companies need profit to survive, government needs industrialisation and development to survive.

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