PEOPLE AND POLITICS BY MOHAMMED HARUNA

NITEL’s Privatization Saga

Last week I took the reader through how the simple exercise of producing a national identity card for the nation’s citizens since 1967 has been cynically converted by a relay of cabals of private/public partners into a long running and highly profitable mega-scam – profitable, that is, for the PPPs. We saw in my article how an exercise which was to cost the country 10 million Naira in 1979 has gulped over 70 billion Naira so far, still with virtually no result.

Then came last month’s announcement by the Minister of Information, Mr. Labaran Maku, that another 30 billion Naira will soon be poured down this black hole. Coming at a time the authorities have said the country could ill-afford a minimum wage of 18,000 Naira, never mind their decision to remove the so-called fuel subsidy at one fell swoop, come rain, come high water, I, personally, thought this was really stretching the patience of Nigerians to breaking point.

However, bad as the 34-year national identity card scam has been, it can only play second fiddle to the terrible mess that the ten-year privatization of Nitel, Nigeria’s erstwhile public telecommunication monopoly, has degenerated into.

And like the national ID card scam, there seems to be no end in sight to its sad and tragic story. Sad and tragic for its 4,500 workers that are owned billions of Naira in wages, sad and tragic for its 10,000 or so pensioners whose five-year buy-out pension plan has been in limbo, and sad and tragic for Nigerians to whom no transparent account of the sale of many of its assets, including the controversial one to former Speaker of the House of Representatives, Mr. Dimeji Bankole, has been rendered.

Two months ago a Senate adhoc committee held a public hearing on the performance to date of the Bureau for Public Enterprise (BPE), the agency in charge of privatizing government owned companies. Not surprisingly, the star witness was its pioneer and most visible director general, Malam Nasir el-Rufa’i. He was DG between 1999 and 2003.

By no means a stranger to hostility from federal legislators as BPE’s boss and subsequently as minister of Federal Capital Territory, el-Rufa’i rejected the committee’s stance that the country’s privatization exercise has been a failure.

The mandate of BPE, he said, was not to create jobs. Its mandate was to end the massive drain pipes government owned companies had become for the public treasury, and “to make them more efficient (and) open up the market for competition so that other operators can come in.” To that extent, he said, privatization has been a success.

Certainly most of the 23 public companies he privatized out of a total of 122 that were eventually sold, he said, were doing well and a few of them have even gone international, quoted as they are on the South African stock exchange. Before privatization, he said, government had invested about 100 billion US dollars (1.6 trillion Naira) in those companies between 1970 and 1999 but had received a miserable return of only 0.5%. Government, he also said, had spent 265 billion Naira to maintain them.

In contrast, he said, most of the companies he privatized not only went on to become successes. BPE under him, he claimed, earned a revenue of 57 billion Naira from the sales.

His secret, he said in not so many words, was that he resisted every attempt by his principals – Olusegun Obasanjo as president and Atiku Abubakar as vice-president and his immediate boss as the chairman of the privatization council – to interfere with his work.

“All I can say is that during my tenure in BPE we tried to do everything by the law. We tried to resist every attempt at political interference... Privatisation was a mechanical process and there was never a time that we deviated from that process...In the 33 transactions that we did we followed the book.”

El-Rufa’i’s record at the BPE was impressive no doubt. Even then it was stretching credulity beyond breaking point for him to have claimed that he sold every one of the 23 enterprises he privatised strictly by the book and in total defiance of his bosses. If, as he told the Senate hearing, he and the president “were always quarrelling over privatization,” it is incredulous that he prevailed over his boss in most, never mind each and every one, of those quarrels.

As he himself admitted, he did not prevail over his boss in the privatization of the dead but unlamented Nigeria Airways. Instead, he said, the president took sides with the minister of Aviation, Mrs. Kema Chikwe, with whom el-Rufa’i was constantly at loggerheads over the sale of the airline whose monicker was an oxymoronic Flying Elephant (who ever heard of an elephant flying?).

And as we all know the Flying Elephant was not el-Rufa’i’s only transaction that failed to fly. Another, and a far more disastrous failure, was Nitel.

Three years ago the former BPE told a Senate committee hearing on the privatisation of the company that he had no regrets over the apparent failure of its privatisation. Indeed, he did not believe it was a failure. What was important, he said, was that his boss saw his tenure at BPE as a great success, which was why the boss promoted him to the job of a minister of the Federal Republic.

Three years on the man has turned round to accuse his boss of interfering with his job and blame him for the failures of the exercise while claiming credit for himself for its successes. This sounds to me rather disingenuous.

No doubt el-Rufa’i did well against the dismal record of the public sector companies before their privatization. But his yardstick ought to have been the world’s best practices like the privatization of British Telecom, which was done in phases over a period of 11 years and which has since resulted into a more efficient and more profitable company.

Five times since 2001 BPE has attempted to sell Nitel and five times it has failed. In between the first and the last attempt this year, BPE under him had given it to the Danish Pentascope to manage. That management deal proved worse than the failed attempts to sell it.

Today, with huge arrears in wages and pensions and stripped of many of its assets, Nitel is hardly any investor’s idea of a potentially profitable company.

Even then it still has the potential given the huge opportunities of the telecommunication industry. There are speculations that the Chinese are willing to pay a premium for the company in spite of its seemingly dismal state. On the other hand, there are also speculations about domestic telecommunication companies wanting to exploit its dismal state to pick it up practically for peanuts. Some of these companies are said to have the support of some powerful politicians in the country.

President Goodluck Jonathan’s challenge today is to make sure that the sad and tragic story of Nitel ends on a happy note before the end of his current term. And all it would take is a will to put an end to the opacity that has been at the root of what most people believe is the dismal record of this country’s privatization exercise.

The Nitel saga may not have been as long drawn and as brazen in its fraudulence as that of the national ID card. But the stakes in it are higher as a telecommunication company. And even with only 11 years behind it its story has dragged on for too long.

NPN not NPP

It must be the printer’s devil when you referred to the ruling party during Shagari as the National Peoples Party in place of National Party of Nigeria (NPN).

YZ +2348056180208.

The reader is right but he should have blamed it on my poor proof reading rather than on the poor devil.