Reforms change the status quo and people are resistant to a change for a number of reasons. One: there are those who are benefitting from the status quo. If you change the status quo, you cut them off from their income base. There are those who are philosophically opposed to private sector doing anything. They believe that government must continue to nurture its citizen: providing telecoms, health and education. They ask you what is the role of government is if not to fend for its people. So, there are those who are philosophically opposed to it based on their ideology. The reform is not by accident. It was based on empirical evidences.
In the 60s and 70s, for instance, government was into banking, insurance, cement manufacturing, petroleum, railway, education, health etc. Government was in every sector and Nigeria had then at the Federal level over 600 state owned enterprises. They were supposed to do business and return profit to government, but not only did they not make profit and return dividends to government, they were also talking from the treasury. So Nigeria Government then under Obasanjo looked at it and reviewed it said no, every businessman or woman that makes investment in business is expecting dividends. But here we are; we are not getting dividends, we are losing tax revenue because those enterprises that are government owned did not pay tax. So that brought in the reforms we are seeing in the past 16 years till date. If you remember First Bank, UBA, Afribank and Union Banks when they were government owned and now, you can see the difference. In those days, those banks operated only in Nigeria and in some states; there was hardly any of them having any branch out the country. But today, because they are under private sector, most of the banks have branches in Africa, UK, China, and so on. This is because they are driven by private sector capital and private sector entrepreneurial spirit.
The problem with government owned enterprises is that there is no entrepreneurial spirit driving them. So, government now realized like I said that even if I invest so much, I will not get anything in return. Then let us stop the losses. Then come privatization. Companies owned by Government have been privatized and after privatization, the reforms started. And they started with the telecommunication sector and we see the impact today. Remember in those days when it was only NITEL (Nigeria Telecommunications Limited) government owned, if you wanted to make an international call, you have to enter your car or bus or cab, bike to get to the city, get to business centre and wait for hours. Even you did not make the call, they will still charge you an amount. In those days when government was controlling the telecom sector, we have about 450,000 lines. Today, with the private sector investment, we have over 120 million GSM lines and the companies have invested cumulatively over 50 billion dollars in the sector alone. And they are investing more because Nigeria has the market with its population base. That is the beauty of reforms once you create a conducive environment for the private sector to thrive and you create an enabling environment for them to invest, you make the sector bankable.
Nigeria National assembly owe this nation a great deal by passing enabling laws that will make it easier for investors to invest in our country. For example, each time you want to privatized NITEL, the National assembly will say do not proceed. With the reforms and with the liberalization of the telecom sector, nobody remembers NITEL again. We are not missing NITEL because the sector has been liberalized and competition has been introduced and there are players in the sector. Two, the issue of mode of privatization of NITEL is purely a legal matter. NITEL owes over 400 billion in debts. If this company is to be run by government as some people have suggested, it then means that government has to cough out money to resolve those liabilities. N400 billion in healths, in education, road construction can do Nigeria a lot of good. Why should we put such money for a government to revive NITEL when it is no longer a critical infrastructure in the Nigeria economy? If NITEL does not come up again at all, Nigerians will still survive in terms of access to telecommunication.
Another area which government can focus its attention now is our Oil and gas sector, most importantly Nigeria refineries. Like president Obasanjo said, his greatest regret as a President of Nigeria is not privatizing NNPC and our refineries. Many people may not like the face of the man called Obasanjo, but most of his economic policies, is what we are benefitting as a Nation today. Successive Governments have not built on those achievements. There is urgent need to privatize our refineries so that we can enjoy the benefits of what we are enjoying on telecom sector. I believe once there are a lot of players in a sector and there is competition among them, then Nigerians will have to options to choose from. When government announced that they were considering the privatization of refineries, the National Union of petroleum and Natural Gas (NUPENG) and Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) threatened to shut down the refineries. Government met them. They told government that they were not averse to government looking for options and business model for handling the privatization,
After that, there were some conflicting statements by branches of the same NUPENG and PENGASSAN to the effect that they opposed to privatization. And government is now conscious that if we do not have a unified voice between NUPENG and PRNGASSAN about the privatization, then there is a risk. This is because they can shut down the economy and no responsible President will want to create pains for his people. But I believe to privatize this sector is long over due. Like I said earlier, : there are those who are benefitting from the status quo. If you change the status quo, you cut them off from their income base. There are those who are philosophically opposed to private sector doing anything. They believe that government must continue to nurture its citizen: providing telecoms, health and education. They ask you what is the role of government is if not to fend for its people. So, there are those who are philosophically opposed to it based on their ideology.
Let me categorically say this, PENGASSAN and NUPENG have all agreed that there is need to privatize. They have realized and they have said on many occasions that Turn Around maintenance (TAM) is not sufficient, that government should bring the refineries back on stream. In the last 16 years, TAM was awarded to our Brother Company, Sir Emeka Offor Company for the TAM. What has happened with the contract? There are other investments that need to be in place and we understand that government is not in a position to make such investment, or rather it is not government priority to raise those kinds of monies that will completely revamp the refineries. Even the Labour unions have realized also that privatization is imminent. I understand their fear. What they craving for is that government should have LNG model, which is to say that government should still have a stake, labour should still have a stake in the refineries. I believe government should not be opposed to this idea. I strongly believe that this has been a long standing policy of NCP that Labour Unions should have stakes in the companies privatized. So government and Labour unions should be on the same page so that Government should kick start the privatization of the refineries because it is long overdue. From my own understanding of the sector, in this oil and gas sector, Nigeria has locked up a lot of potentials that our economy has. There are more than 10 industries that can spring up using the by-products of the refineries. Most of these items we do not see them. Most of them are being imported, thus putting more pressure on naira. Once we get our refineries working, there will be other spinoff industries that will come up from there. It will create jobs, manufacture products that Nigeria will sell locally and internationally and grown our economy.
This now brings me to the issue of Petroleum Industry Bill (PIB). The National Assembly needs to expeditiously, aggressively handle the issue of the Petroleum Industry Bill (PIB). The PIB is critical because presently, the regulatory powers are dispersed; Ministry of Petroleum Resources has regulatory powers, the Department of Petroleum Resources (DPR) has regulatory powers, the Petroleum Products Pricing and Regulatory Agency (PPPRA) has regulatory powers, NNPC has regulatory powers and that is why over the years, many investors have collected licences for refineries, but none of them has set up expect one or two. Now, all this while, why have not they made investments in these refineries? It is because the regulatory environment is not clear and the major challenge for Nigeria now is the issue of fuel and gas. I believe if we have the PIB passed and create a regulator that has all the power of regulating the industry concentrated in one place like NCC in Telecom sector, that regulatory agency will now conduct an industry study and set cost reflective prices for gas and for other related products which will now provide clarity for investors to invest. So, I want to appeal to the National Assembly and to all stakeholders to come together and quickly pass the PIB. Let us remove those controversies clauses that have stalled the passage of the bill. Nigerians stand to gain more from the passage of that bill than we stand to oppose. Let us move our people from poverty with this singular bill.
Otimkpu Paschal, a graduate of International studies and Diplomacy, University of Benin, a Public affair analyst writes from Awka Anambra State.