Realnews 2nd Anniversary Lecture

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BENJAMIN Dikki, director general of the Bureau of Public Enterprises, BPE, is a discussant on the topic: “Economic Implications of Getting the Right Leadership” at the Realnews second anniversary lecture which held on November 19, at Sheraton Hotel, Lagos. Below are his talking points.

• The Technical Committee on Privatisation and Commercialisation (TCPC) which gave birth to the National Council on Privatization (NCP) and it’s Secretariat, the Bureau of Public Enterprises (BPE) was established vide Decree No. 25 of 1988.
• In 1999, the Enterprises (Privatisation and Commercialisation) Act No. 28 of 1999 replaced Decree 25 which created the National Council on Privatization (NCP) and its implementation arm, the BPE.

The Public Enterprises (Privatisation and Commercialisation) Act 1999 established:

• The National Council on Privatisation (NCP)
• The Bureau of Public Enterprises (BPE)

The NCP:

• Determines political, economic and social objectives of the programme
• Approves policies
• Approves public enterprises to be privatised or commercialised
• Issues directives to the BPE

The BPE:

• Implements Council’s policies and decisions
• Responsible for implementing the day-to-day Reforms, privatisation and commercialisation activities

• The TCPC/NCP/BPE were established first and foremost to carry out reform and privatization in key sectors of Nigeria economy
• It must be noted that in the nearly three decades of carrying out this assignment; reform and privatization has been the cornerstone of economic policy of every government, except the Abacha years from 1993 – 1998
• This succinctly illustrates the theme of this lecture “The economic implications of getting the right leadership” or the wrong leadership as the case maybe.
• In that period, Nigeria suffered the real economic implications of wrong leadership.
• There were little or no injection of foreign capital in any sector of the national economy
• Power sector was the worst hit by absence of reform and investment
• As soon as democratic leadership was enthroned in 1999, strong foundations began to be laid for economic reform and attraction of private capital to the national economy.
• The first key foundation was the inauguration of the National Council of Privatization; made up of key ministers and critical private sector players in the economy
• The Council began with initiation of reforms in the following key sectors of the economy:
• Electric Power Sector;
• Oil and Gas Sector;
• Telecommunications Sector;
• Agriculture and Water Resources Sector;
• Hospitality/Tourism Sector;
• Industry/Manufacturing Sector;
• Insurance Sector;
• Transport Sector;
• Solid Minerals Sector;
• Aviation Sector; and
• Basic Metals Sector
• the Pension Reforms in Public Enterprises,
• the Cross Debt Determination and Resolution; and
• the Competition and Anti-Trust Reform.

Government believes that the effective implementation of the proposed reform programs will:

• Attract private capital.
• Reduce government and political interference in the running of the economy.
• Clearly define role and functions of participants in the economy.
• If I may remind us that the improved telephony which the nation is presently enjoying is a result of such reforms in the sector which produced Telecom Policy and law which the NCP/BPE championed in 2000.
• Through the reforms carried out in the telecommunications sector, Nigeria has moved from about 400,000 telephone lines in 2001 to about 134 million lines in 2014; and
• The Teledensity has increased from estimated 2.5% to 95 percent in a space of 12 years
• Nitel would be sold to a core investor this year through guided liquidation process
• NERC now playing the same role NCC is playing in the telecom industry, to the power sector and in a few years; we believe, power will surpass the telecom sector as the main growth driver of the economy.

Other Reform Programmes

• We are relying on the Transport Policy of the federal government, for which the Bureau was the key driver, to commence transaction on the Railways pending the passage of the pending sector bills.
• The enterprises requiring reforms were slated for privatisation in the third phase, which is why we have consistently harped on the fact that this is a critical period in the privatisation exercise
• The challenge for us at the NCP/BPE is to ensure that these reforms continue to be at the centre of the federal government’s economic policy agenda which presupposes the fact that a lot is required from the Bureau
• The reform and privatisation programme continue to be the hub of the present government economic policy agenda
• We make bold to say that the three phases so far implemented have been successful in spite of the criticisms and oppositions from a section of stakeholders and Nigerians
• Privatisation being a reform programme has always drawn opposition anywhere it is introduced
• Long term benefits for the nation has always been the rationale for continuing

CURRENT INITIATIVES

• Housing: Reviewing the policy, legal and regulatory framework to encourage private sector participation
• The 7 National Parks – Reviewing the policy, legal and regulatory framework to encourage private sector participation
• The 3 DFIs (i.e. BOI, BOA & FMBN) – Working on creating a mega whole sale DFI like the ones in Brazil and Germany
• The 12 RBDAs – Reviewing the policy, legal and regulatory framework to encourage private sector participation
• Health Sector
• Sports Sector

Targeted Privatization

• The Federal Housing Authority is currently being restructured and commercialized to position it to meet up with its challenges
• The enterprises pending passage of the PIB in the Oil & Gas sector
• The Refineries
•  PPMC
• NGC
• Other enterprises are
• Ajaokuta Steel Company
•  NIOMCO
•  Nitel/Mtel
• Old Warri Terminal “B”

CONCLUSION

• We are working to expand private sector participation in our economy
• Nigeria will continue to take measures to attract quality foreign investors & capital that will boost technology transfer, economic development, & Forex in-flow
• Provide assurance and comfort to investors on the viability of recovering their costs and having a reasonable return on their investments; and
• Redirect funding by Government to other key sectors of the economy that are socially imperative such as health, education, etc. and encourage the private sector to be the engine room for economic growth and development. — Dec. 1, 2014 @ 01:00 GMT

— Dec. 1, 2014 @ 01:00 GMT

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