Is privatisation helping the Nigerian economy?

Even though privatization may not be suitable to the Nigerian economy, some of the arguments that have always been used to promote it and use to counter the argument for equity is the argument that the private sector is more efficient, that it reduces government bureaucracy, reduces state monopolies and ensure level playing fields. It […]

Even though privatization may not be suitable to the Nigerian economy, some of the arguments that have always been used to promote it and use to counter the argument for equity is the argument that the private sector is more efficient, that it reduces government bureaucracy, reduces state monopolies and ensure level playing fields. It is also believed to reduce bad management, increase competitiveness, increase the quality of goods and services,

reduce corruption and control by government, create employment and expand local business. The fact is that all these are also achievable by the public sector through good governance.

In many countries, state ownership has been an important tool in bringing cheap water, energy and transportation to the people. This is why civil society activists who are concerned about the philosophical basis of privatization argue that privatization is a neo-liberal approach to development, which is imposed by the Bretton Woods institution as part of globalization that can only favour rich countries and influential individuals. They argue that privatization is anti-labour and will always lead to unemployment.

How many Nigerians have interest in private employers today? There had been complains of high interest in maximizing profit with little regard to the welfare of the employees. Interest in ‘’private-public migration’’ also manifests in demand of pensionable and fruitful retirement jobs. It is anti-poor as it is clear that in most cases privatization particularly of public utilities like road, electricity, water, etc will always lead to increase in prizes, thereby widening the gap between the rich and the poor.

There is also the concern for the disregard for the constitution and rule of law in the whole privatization process. The 1999 constitution not only provides that the state operates in a way to prevent the concentration of wealth or the means of production and exchange in the hands of few individuals or group but also that the state should operate and manage the major sectors of the economy. The privatization process in Nigeria is therefore to the detriment of this provision of the constitution.

The problems with privatization include the facts that private firms concentrate on profit making to the detriment of essential public services, it also renders more expensive services, private companies are interested in short term profits which exercise usually creates wealth for the and making poor poorer. In view of the forgoing, it is therefore pertinent to say privatization or an inclination towards privatising the major sectors of Nigeria economy is sabotaging the socio-economic growth of this nation.

Mohammed Usman Ebbo, HNDII Mass Communication Dept., Federal Polytechnic Bida