On the commercialisation of the NNPC: My take, by Isa Ali Mukhtar
Ordinarily, in more saner economies and under a working system, the commercialization of a PUBLIC ENTITY is a good development and it’s done mainly to achieve two ends; improve EFFICIENCY and increase PROFITABILITY.
A commercialized entity, even if still owned and regulated by the public (often government), is allowed to generate INTERNALLY all the funds needed for it’s own operations and expenses, at the same time meet its own financial obligations and render its financial statements to the public.
Needless to say, the same entity would be required to remit its tax returns to the concerned authorities as and when due. Of course the operational infrastructure and equipment remains public owned, in a form of ‘lease agreement’. This is a model adopted by many countries to manage key institutions like power generating companies, water recycling facilities and even transport units.
The government merely performs more of supervisory/regulation functions. Now, this is the exact model adopted for managing the NNPC, if President Buhari’s recent launch is anything to go by.
However, knowing the peculiarities of the Nigerian system which conforms neither to the world accepted definition of ‘a working economy’ nor the globally accepted standards of regulation of public owned entities, I think we’re still running around in circles. The ‘commercialization’ of NNPC is neither here nor there, as far as I’m concerned.
The biggest problem of NNPC and the entire system is of of course CORRUPTION. Deeply entrenched and even institutionalized. This corruption and propensity to corruption will surely DEFEAT the whole purpose of the exercise. Accountability cuts across all sectors, public, private, commercial or whatnot. Where there’s no accountability, there’ll NEVER be progress.
The point is, NNPC might break-even or even make profit, as anticipated at the end of the financial year. Revenues will be generated from the ordinary course of business, revenues will be remitted to FIRS as usual. I don’t see any problem in that end.
But you see, the same profit will be looted away by the management of the NNPC and the board. Again, the same returns remitted to FIRS will be STOLEN by thieves within the government circles and the FIRS. At the end of the day, there’s zero work done! Our ineffectual government will then set up bogus committees to inquire into the excesses of NNPC, FIRS or whatever. These phantom committees will submit some vague reports which the government collects with a lot of fanfare and then proceeds to SIT on and do nothing. No one gets indicted, no one gets prosecuted and the circus continues. A futile end!
Meanwhile, this same commercialization will come with its attendant consequences such as REMOVAL OF SUBSIDY and of course, rise in prices of all petroleum products and the poor masses will be the ones to suffer increased transport/logistics fare and rising prices of foodstuff. No infrastructure and or social amenities will be provided with the returns from this futile adventure, simply because the same funds meant for capital projects or economic activities have been stolen and or diverted by a few gluttons.
I apologise if I come across as a PESSIMIST. The truth is, I have seen this same scenario play out numerous times always throwing up SAME RESULTS.
We’re talking of a country where administrators borrow huge amounts of money for the sole purpose of LOOTING same. What more of the funds that are generated internally?
Corruption and PREBENDALISM are our biggest problems and they’ll continue to stand in our way and stop us from developing.
Commercialization of the NNPC has already been decided and executed of course, whether I’m Ok with it or not. Even my ranting on this space is neither here nor there.
However, a “quick fix” to our economic woes, according to popular school of thought, I see lies in EMPOWERING THE PEOPLE to generate money from daily economic activities. Let the government work on providing an ENABLING ENVIRONMENT for SMEs to thrive vis-a-vis a robust source of funding for start-ups. We can do the rest ourselves. Nigerians are an industrious and hard-working people.
We are not lazy and laid-back. Generation of sustainable power alone takes care of 50% of the problems of SMEs and start-ups. When SMEs are truly up and running, there will be a lot of money being circulated around from a lot of economic activity. The average youth won’t be on the streets creating mischief.
VALUE ADDITION will cut across all sectors, from the woman operating a salon down to the man buying corn from local farmers to process and package pop-corns. Economic activities will naturally give birth to other economic activities all interrelated and dependent on each other. Wealth of course, will generate itself.
Of all the world economies I know, Nigeria is by far the HARSHEST environment for SMEs to prosper! The only useful tool at the disposal of SMEs in Nigeria is POPULATION to be used for workforce and to create demand. Every other factor is inadvertently SKEWED against the enterpreneur. You are either being hounded by draconian government policies, incapacitated by epileptic power sources or heavily handicapped by security challenges often cutting off production. It’s harsh out there!
Rather than embarking on seemingly white elephant (mis) adventures like commercialization of poorly regulated institutions, let the government work towards empowering SME’s.
Isa Ali Mukhtar (B.eng) is a father of one, a social critic/analyst and a keen sports enthusiast who works in the Banking Industry. He can be reached via email@example.com.