In the third and final conversation of the series, we examine the processes that have led to the modernisation of the commercial sector of Nigeria.
The modernisation of the sector has been characterised by the divestment of government holdings in several sectors, and the introduction or reform of laws. Much of these activities have been carried out pursuant to the activities of the Bureau of Public Enterprises (BPE).
The Bureau of Public Enterprises was established by the Public Enterprises (Privatization and Commercialization) Act 1999 (the ‘Privatization Act’).
It acts as the secretariat of the National Council of Privatization (the ‘NCP’), also established by the same Act. The NCP is the executive body established to generate policies and action plans to execute the privatization and commercialization objectives of the Privatization Act. The BPE executes the policies generated by the NCP.
The origins of the BPE can be traced back to 1981, when the Report of the Presidential Commission on Parastatals (the ‘Onosode Commission’) outlined the challenges of public enterprises in Nigeria.
At the same time, the International Monetary Fund (IMF) had imposed conditionalities for considering the loan sought by the Shehu Shagari administration. One of the conditionalities was the divestiture of ownership, management and control of some public enterprises. The factors precipitated a debate on the need to increase the role of the private sector in the economy. The debate on privatization continued across several regimes until 1988 when the General Babangida regime introduced the first legislative instrument on privatization and commercialization in Nigeria, i.e., the Privatization and Commercialization Act No. 25 of 1988 and the Structural Adjustment Programme (SAP). Under the Privatization Act 1988, the Technical Committee on Privatization and Commercialisation (TCPC) was introduced. TCPC was the precursor of the Bureau of Public Enterprises (BPE). The Bureau of Public Enterprises Act was promulgated under the Abacha Administration to replace the Privatization Act 1988. However, not much was achieved by this enactment until the Privatization Act 1999 was introduced, under which the NCP and BPE were introduced.
The sectors listed for privatization and commercialization include:
- Telecommunications Sector – NITEL, Nigeria Mobil Telecoms Ltd
- Electricity Sector – NEPA
- Petroleum Sector – The two Refineries in PH, Petrochemicals in Kaduna, Warri, EPCL, NNDC, etc
- Fertilizer Companies – Federal Superphosphate Fertilizer Company Ltd, National Fertilizer Company Nigeria Ltd,
- Gas – NGC
- Steel and Aluminium – Steel Rolling Mills in Jos, Katsina, Oshogbo, ASCL, DSC, ALSCON
- Mining & Solid Minerals – Nigeria Coal Corporation, Nigerian Mining Corporation, NIOMCO
- Media Companies – DTN, NNN Ltd
- Insurance Companies – NICON and Nigeria Re
- Transport & Aviation Companies – FAAN, Nigerdock Limited, and NAL
- Paper Companies – Nigerian National Paper Manufacturing Company Ltd, Iwopin, Nigerian Newsprint Manufacturing Coy Ltd – Oku Ibokun, Nigeria Paper Mills Ltd
- Sugar Companies – Sunti, Lafiaji, Nigeria, Bacita
- Cement Companies – Ashaka, Benue, Northern Nigeria, Nigeria Cement, Nkalagu, Calabar Cement, West African Portland Cement
- Commercial Banks – Afribank, Assurance Bank,
- Motor Vehicle and Truck Assembly Plants – ANAMCO, Leyland, PAN, Volks, Steyr
- Hotels – Nigeria Hotels Limited, FESTAC 77 Plc
- River Basin Development Authorities in Cross River, Lower Benue, Nigeria, Ogun-Osun, etc
- National Parks in Old Oyo, Yankari, Cross River, etc
- Miscellaneous – NIWA, NRC, NPA, International Trade Fair Complex
The quest to privatize and commercialize led to the establishment of enabling and regulatory frameworks.
Thus, the NCP and BPE contributed to the modernisation of the commercial law and sector. The NCP, in the exercise of its powers under the Privatization Act, s.11(k), established 19 Implementation/Steering Committees to formulate sector policy, reform the sector and draft appropriate legislation, including:
- Oil & Gas Implementation Committee (April 2000) – drafted the Policy for the sector and PIA, 2021
- Telecom Sector Reform Implementation Committee (January 2000) – drafted the NCC Act, 2003
- Electric Power Sector Implementation Committee (2000) – drafted the EPSR Act, 2005
- Industry/Manufacturing Sector Steering Committee (2000)
- Transport Sector Steering Committee (2000)
- Aviation Sector Reform Implementation Committee (2000) – was involved in the drafting of the Civil Aviation Act, 2006
- Solid Mineral Sector Steering Committee (2000) – was involved in the drafting of the Mineral and Mines Act, 2007
- Steering Committee on Competition and Anti-Trust Reform (2001) – drafted the Federal Competition and Consumer Protection Council Act, 2019.
- Steering Committee on Pension Reform in the Public Service (2001) – drafted the Pension Reform Act, 2004.
Acts that have been passed under the aegis of the NCP and BPE include:
- The Nigerian Communications Act, 2003
- The Debt Management Office (Establishment, etc) Act, 2003
- The Pension Reform Act, 2004
- The Electric Power Sector Reform Act, 2005
- The Civil Aviation Act, 2006
- The Minerals & Mining Act, 2007
- The Federal Competition and Consumer Protection Council Act, 2019
- Petroleum Industry Act, 2021
Prof Idornigie SAN states that he is proud of the modernisation work that the BPE has done.
This work encompasses the Bills that were drafted, the Acts passed, as well as the privatization of the former NICON NOGA Hilton Hotel, Eleme Petrochemicals, and the concessioning of the ports in Lagos, Calabar, Warri and Port Harcourt. He states that contrary to the popular view that BPE only sold public enterprises, BPE has contributed to creating appropriate regulatory environment for commercial activities in Nigeria. Nevertheless, he is disappointed with the fact that there are still several outstanding Bills that have not been passed into law, many of which have become orphans in the National Assembly. He attributes to the conflicting interests of stakeholders and government reservations about regulators.
To know more about the objectives and challenges of privatization and commercialization, as well as the thoughts of Prof Idornigie SAN on the Nigerian experience, see the full interview below.