Economic Confidential, June 28, 2009

EXCLUSIVE

BPE Never Privatize Ajaokuta Steel Company - DG

…To Ensure job security and retraining of workers in Privatization Process

The Bureau of Public Enterprises (BPE) has exonerated itself from the privatization of controversial Ajaokuta Steel Company in Kogi State saying that the process was executed by a Federal Ministry just as it now focuses on employment generation and retraining in subsequent privatization exercise.

The Director General of Bureau of Public Enterprises Dr. Christopher Uloneme Anyanwu told Economic Confidential, an online economic intelligent journal that BPE did not privatize Ajaokuta, it was done by a Ministry. He pointed out that “No Ministry has the institutional capacity to carry out a transparent and effective concessioning or privatization of any public enterprises. The ministries are not institutionally equipped to ensure a smooth and transparent privatization, commercialization or concessioning of enterprises. They are only institutionally equipped to help government formulate policies and execute them. And I would assure you that any privatization carried out by the ministries is bound to have problems.

“Remember that I had first admitted that there has been flaws in the ones we have done due to learning process, but one difference you may draw between ours and theirs is that we cannot ask government to bring a penny to pay banks for the NGN70billion they contributed to buy NITEL, we cannot do that because we tied the agreement up neatly, so that if it goes sourly, the government the government does not loose and we will have an opportunity to correct the mistake.

Perhaps in the case of Ajaokuta which was done by the ministry, the government may be called upon to make compensation or take responsibility for one liability or the other. Ajaokuta case is in the Arbitration Court in the United Kingdom, anyway I am not in that picture, but my emphasis is that, we at BPE cannot accept this; whatever we do cannot bring liability to government even if things go wrong. “

Dr. Anyanwu who succeeds Mrs. Irene Chigbue as the DG of BPE in March 2009 from the University of Nigeria, Nsukka, where he was the Head of Public and Private Law Department, also cautioned against the rush to privatise government institutions. According to him “if you allow the ministries to use the ICRC to carry out privatization (as they are all rushing to do now), there are bound to be more problems. And what happens when the minister is replaced? The new minister will try to find the flaws in the past arrangement and try to correct them and the problem will keep recurring, but the process is more likely to work if the BPE which is a neutral professional body carries out the privatization.  If we place the two institutions side by side – Ajaokuta and NITEL, you will see that the difference is clear.”

On the allegations that privatization is synonymous retrenchment of workers, Dr. Anyanwu bluntly pointed out that “We may have to refocus the entire privatization process, so that, when you privatize any enterprise, the workers are retrained in order to find relevance, by so doing their careers continue. It is not a question of pay them off. In Russia and Ukraine, they give you the whole enterprise, perhaps for one dollar, then invest in it, get it working, employ the workers and make profit for yourselves and pay the government its own dividend.

“The purpose of government is not to sell enterprises to people and let them stagnate or die; it is not the purpose in any part of the world. In places like Ukraine, Russia or China the purpose is to get these enterprises to work again and employ the people who were there and make money for government, so, it is not for government to make money from them. One thing we have gotten very wrong is the idea of selling enterprises in order to put money in the pocket of government and sending workers away, it is not proper, what does government need the money in its pocket for, if the workers are sent away in the streets? This scenario is not proper.

Watch out for full detail of the exclusive interview with this academic and lawyer on his mission in BPE on the website www.economicconfidential.com from July 1, 2009