Nigeria’s N1.6 trillion investment on 600 privatised firms ineffective – BPE boss

Public enterprises gulp over N480 billion annually in subventions and subsidies.

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The Federal Government said on Monday that over N1.6 trillion spent on about 600 public enterprises across all sectors of the country’s economy prior to privatisation was not achieving the desired results.

This was made known by the Director-General, Bureau of Public Enterprises, BPE, Benjamin Dikki.

Mr. Dikki said government arrived at this ugly conclusion following no corresponding returns on investment on these enterprises over the years.

According to Mr. Dikki, the public enterprises gulped over $3 billion (about N480 billion) annually in subventions and subsidies, while tax deductions at source were never remitted to the tax authorities, neither were dividends paid from their operations, despite their status as monopolies.

Mr. Dikki said a substantial part of Nigeria’s non-performing debts to the London and Paris Clubs were mostly loans taken by these enterprises, even as they were still indebted to their workers in salaries and pension benefits of over N2 trillion.

He said it was even more disheartening that these enterprises generated only 500,000 jobs despite having over 5,000 board positions.

The Director-General was speaking on the theme, The Nigerian Reforms & Privatisation Policy, Processes, Gains, Challenges and Prospects, to members of the IBB International Golf and Country Club, Abuja.

The privatisation agency boss expressed disappointment that the twin policies of government direct investment and indigenisation of the Nigerian economy failed to yield the desired dividends owing to the inability of these enterprises to break-even and stay afloat.

“The Nigerian economy has continued to experience declining growth, increasing unemployment, galloping inflation, high incidence of poverty, worsening balance of payments, debilitating debt burden and increasing unsustainable fiscal deficits”, he stated.

He said several studies commissioned to find out what the problem showed that the inefficiencies of these enterprises were as a result of massive corruption, abuse of monopoly powers, over-dependence on treasury government, defective capital structure and incessant political interference in their managements.

He said the establishment of the Technical Committee on Commercialisation and Privatisation, TCPC in 1988, prior to the coming of the BPE, was to free government from involvement in running businesses and to transfer same to the private sector.

Mr. Dikki nevertheless noted gains of the privatisation programme. He said the proceeds were used to meet other socio-economic objectives, while enterprises that were not paying taxes began to pay corporate tax under their new private owners.

On the power sector reforms, Mr. Dikki said an estimated 90 million Nigerians were living without electricity, despite the Federal Government’s efforts to privatise the operations of the industry and turn around its fortunes.