Summary

          Nigeria’s government has kicked off a privatization programme that promises to be one of the biggest in Africa and to help mend the country’s strained relations with international financial institutions. In early October 1998, the Bureau of Public Enterprises, a state agency, invited local and international investors to flag their interest in more than two dozen state-owned companies slated for privatization. Companies up for sale ranged from giant state telecommunications and power utilities, to cement, sugar and vehicle plants, as part of what the government says is a comprehensive programme of privatization and commercialization of public enterprises. Government officials say the aim is to turn around poorly managed and cash-strapped state enterprises whose inefficiencies have hampered economic development in Africa’s most populous nation. By handing over management control of public enterprises to strategic investors, the government hopes to repeat the success of its partnership with oil multinationals, which hold minority shares in joint ventures that produce more than 95 per cent of Nigeria’s crude oil output.

          Besides enhancing efficiency, privatization is seen as a way of increasing foreign investment and drawing Nigeria more fully into the global economy.

          Not all Nigerians are convinced of the wisdom of selling off state assets or giving foreigners control of crucial utilities.

          Nigeria has already carried out one successful privatization programme which to a large degree accommodated the various concerns of different interest groups. This programme used a scheme that sought to ensure an equitable spread of ownership among different social classes, and ethnic, and regional groups. As a result, the exercise created well over half a million new shareholders in Nigeria. The Bureau of Public Enterprises helped to establish the Shareholders Association, whose aims include educating shareholders on their rights and obligations, as well as promoting their interest in the activities of their companies. The organization has played an important role in developing a culture of shareholding in the country.

(Africa Recovery, Vol. 12 H3 December 1998, page 4)