Federal Government yesterday attributed its public assets’ privatisation to lack of corresponding returns on investment.
It said, it had invested N1.6trillion over the years to create 600 public enterprises in all sectors of the economy before privatization, yet there were no corresponding returns on investment to the Nigerian
economy, describing the enterprises as drain pipes.
The Director General of the Bureau of Public Enterprises (BPE), Mr Benjamin Ezra Dikki who made the disclosure said in addition, only 500,000 jobs were created even as these enterprises had over 5,000 board seats.
In a statement by the Head, Public Communications,BPE, Chigbo Anichebe, Dikki disclosed that a substantial part of the then non-performing debts owed to the London and Paris Clubs were mostly
loans to these enterprises which also owed salaries and left huge pension liabilities amounting to over N2 trillion to the be borne by Federal Government.
He added that the “public enterprises consumed over $3billion (about N480billion) annually in subventions and subsidies, tax deductions at source were not remitted to the tax authorities and no dividends were received or reasonable service provided by them despite their monopoly status”.
The BPE boss noted that the twin policies of government direct investment in the Nigerian economy and an attempt to indigenize the economy did not produce the desired economic results as these
enterprises could hardly break-even and became a huge burden on the government budget.
“Nigeria’s economy experienced declining growth, increasing unemployment, galloping inflation, high incidence of poverty, worsening balance of payments, debilitating debt burden and increasing
unsustainable fiscal deficits”, he stressed.
Disenchanted with the poor performance of the PEs, Dikki said that the Federal Government, from 1969 to 1984, commissioned several studies whose findings revealed that the PEs were inefficient, corrupt, misuse monopoly powers, depend heavily on treasury, have defective capital structure and suffer incessant political interference.
He said the setting up of the Technical Committee on Commercialization and Privatization (TCPC) in 1988 which later metamorphosed into the Bureau of Public Enterprises (BPE) was to free government from businesses and to bring in private hands.
The DG listed the gains of privatization as the utilization of proceeds for other socio-economic objectives, non-allocation from the treasury to privatized enterprises, payment of corporate tax and heavy investments by the new owners that grew the Companies and the economy.
On the power sector reform, the DG said that an estimated 90 million Nigerians were living without access to electric power and government did not have the resources to reach them, thus the need to privatize the Power Sector to increase the reach.
Dikki added that the reforms carried out in telecoms, pensions, debt management and other sectors were impacting positively on the Nigerian economy even as he informed that the Bureau had lined up several reforms in the years ahead.
