It is no gainsaying that government has no business in business. Evidence abounds that most government enterprises perform far below expectations, both in terms of service delivery and the bottom line. Little wonder everyone who cares seems to support the idea that disengages itself from business ventures that can be run more efficiently and effectively by private concerns. Hence, government should involve itself with policies that will enhance the strategic positioning of the economy. The relative success recorded in the Nigerian telecoms industry gives credence to this fact!
Remembering the dark days of telecommunications in Nigeria is not a pleasant story to tell. It was as if that era was never going to change for the better; the era where only few people had access to telephone lines. Multitudes queue up daily at NITEL telephone boots to make calls to their loved ones and associates. Liberalization came to the sector, NITEL was privatized, private firms were allowed to run the show, and here we are today, a country with relatively a better telecoms industry.
Looking at the achievements recorded in the telecoms sector in Nigeria, not minding the challenges presently bedeviling the sector, it can be said that a lot of improvement has been recorded. A large gap exists between where we were and where we are now. Though we still have the challenges of drop calls, bad connections and so on, but the present state of the industry is still a dream come true relative to the ‘dark ages’ of the Nigerian telecoms industry a decade ago. In the whole of this relative success story in the Nigerian telecoms industry, liberalization and privatization play a major role.
Liberalization is an agenda of changes in the direction of moving towards a free-market economy. This normally includes the reduction of direct controls on both internal and international transactions, and a shift towards relying on the price mechanism to coordinate economic activities. In such a system, less use is made of licenses, permits and price controls, and there is more reliance on prices to clear the markets. It also involves a shift away from exchange controls and multiple exchange rates, towards a convertible currency. The extent to which an economy is liberalized can vary greatly since liberalization is a matter of degree.
On the other hand, privatization is the transfer of ownership and control of assets or enterprises which were previously under public ownership. Privatization may be adopted because of a belief that assets will be used more efficiently under private ownership, to reduce the power of central authorities, to raise revenue for the government or to attempt to spread property ownership more widely in society.
Hence, privatization is canvassed for because of the benefits it creates among which is the tendency to enhance the efficiency and profitability of firms, a situation which has been the bane of publicly-controlled enterprises. Privatization brings about the tendency for increased foreign investments and export earnings which also come with job creation opportunities for the citizenry. In addition, it also has the capacity to broaden the base of share capital and stock market thereby providing a larger base for local and international investors.
Furthermore, privatization decreases political pressure which government controlled enterprises have to put up with especially in this part of the world. Private enterprises make more use of latest technologies and know-how which enhance their production both in the short and long run and at a relative lowered cost. The overall benefit of privatization to government is that it leads to decrease in deficit budgeting as it creates a platform for increase in budgetary allocations to infrastructure development. Going by the aforementioned benefits of privatization and the glaring evidence of successes recorded in the Nigerian telecoms industry, one can but wish for such in the Nigerian power sector. Unfortunately, this is not the story right now in this very critical sector of the economy.
The privatization of the power sector in Nigeria has left many wondering what the unbundling of PHCN will offer ordinary Nigerians. The privatization process though long overdue and as some will argue is still in its formative stage, but this argument nevertheless holds no water has there not been any noticeable change in the way and manner the various DISCOs carry out their operations especially in areas such as power supply and pricing. It is not news that power supply since the unbundling has not improved a bit, worst still, it is a fact that the various DISCOs still resort to the exploitative ways of the old PHCN.
Bills then and now were and are always ‘estimated’ and the masses have no choice than to pay this outrageous estimated bill even when power supply is obviously on the downward trend. Consumers are forced to pay at gun point or risk being disconnected even when these firms are said to be privately owned. Power business is obviously a big business in Nigeria where you can supply nothing and force the helpless masses to pay for services not enjoyed. At this junction it is pertinent to say that the job of the power sector regulator is clearly cut out in preventing the masses from the hand of suppliers who refuse to supply a well needed commodity and expected to be paid in multiples every month. The masses had endured this trend under the monopoly of NEPA turned PHCN, it shouldn’t be our lot again under private firms!
Temitope Adamson
