The issue of privatisation has gone beyond the concept of its rationale. The question to be answered now is how best can we achieve the stated objective of privatisation.
In is a phenomenon of modern governments to provide public goods and services for their citizenry. Public goods for purpose of clarity, are those goods and services that no individual can be excluded from their use once provided. When there is law and order for instance, tax defaulters cannot be prevented from enjoying the benefits of peace and tranquility that accompany it. The same applies to high ways and roads.
It would have been difficult for a private entrepreneur supplying them to enforce command to pay and cannot prevent any one who did not pay to use them. Hence, it became reasonable for government to provide such goods and services.
Recent happenings show government entering into investment in the production and distribution of private goods (goods which when purchased by individuals, other can be prevented from using it, e.g., cars, food, houses, etc). The provision of private goods is the traditional area of the private sector.
These gods had better be left in the hands of the private sector who can provide them better than government. This is the point of diversion. It is this sector where private investment ranks higher in terms of performance, feasibility and optionally that government is divesting in. This government divesture is what has come to be known in official quarters as privatisation, leaving the production, of private goods entirely in the hands of the private sector.
Presently, fears are being expressed on several grounds. Among such fears the following stand and clearly. That:
•The existing inequities and structural disequilibrium in the economy would lead to concentration of wealth in the hands of goo few powerful Nigerians which will run counter to the egalitarian philosophy of the Nigerian constitution.
•It will be unfair for government to sell companies in which it has invested huge amount of money to few Nigerians.
•Privatisation might aggravate the problem of unemployment as the workers in the orgnisation to be privatised would be left to their fate without protection and any form of security.
•Government might lose control of the economy
•Due to the poor accounting records of some of these companies slated for privatisation, they may not qualify for quotation in the Nigerian Stock Exchange.
It is not the intention of this article to argue out the above mentioned points. Suffice it to say that some of these fears are admittedly genuine. But a careful analysis shows that there are quite a good number of others that allay these fears.
The question that stares us in the face is how best can these enterprises be disposed of that would ensure equity, geographical distribution and a realistic price value of the shares to be quoted.
One way out is to handover these companies to the securities and exchange commission for necessary action. But there is a snag. Under normal circumstances the securities and exchange commission should handle the floating, pricing and allotting of the shares of these companies.
But according to SEC Act of 1979, the commission is charged with the following:
•Price determination of all public companies that has foreign participation. The objective here is to prevent the securities and exchange commission from evaluating the price of shares held entirely by Nigerians. Most of the companies it involved in the privatisation bid are wholly of partly government companies. If the share of these companies are to be valued by the securities and exchange commission, government must set in motion a machinery to make these companies public limited liability companies or armed the SEC Act of 1979.
•The securities and exchange commission was set up to help in the allotment of securities of public companies in order to ensure a wider geographical spread.
The securities and exchange commission will no doubt make it possible for shares of companies to be privatised to be widely spread.
This can only be realised if the companies to be privatised conform with the act that was set up by the securities and exchange commission. That is on the assumption that government will allow it to handle the issue.
The extent the securities and exchange commission would involve itself will depend largely on how many of the affected enterprises are public or joint ventures. Most of the companies involved as at today are wholly Nigerian-owned. A few, however, are public or joint ventures between government and foreign entrepreneur. It is the latter that fall within SEC’s orbit.
To ensure a successful privatisation, the following stages should be followed:
APPLICATION STAGE can better be achieved through mass publicity. The various media houses, the post offices, local government offices, information booths, local languages, market places, royal palaces be used as means and ways through which the people can be informed of what privatisation is all about and the need for them to obtain forms in order to buy shares. This is necessary to prevent a re-occurrence of the experience Nigerians had during the indigenisation which many saw a beneficial to urban dwellers only.
When applications are available, they should not be posted as a result of the poor postal services in the country. Rather the channel of distribution application forms should be public oriented instead of through limited tend to favour the staff in form collection.
Prospectus should also be made adequately available and on time. Because of the observed problems, there should be a wider means of forms distributions. Channels such as banks and their branches, stock brokers, local government offices, state investment companies, post offices, royal palaces, the companies to be privatised offices are suggested.
Due to the poor communication in the country and with regard to the vast land mass of Nigeria, consideration should be given to forms that have to go long distance that might be returned late. A minimum of one month should be given for return of application forms to accommodate such problems.
Those charged with issuing the application forms should be asked to make the forms available well in advance, to their distance offices, of the opening of the offer. Equally important, collecting agent should be given a minimum of two weeks to submit applications after closing.
