We won’t reverse power privatization on any grounds, says Fashola

Babatunde Fashola, minister of power, works and housing, says the ministry of power, under his leadership will not cancel power privatisation on any grounds.


Aliko Dangote, president of Dangote Group, had asked that the power privatisation process be revisited and reversed into the “right hands”.


“We should be as open as we can if government doesn’t  intervene by taking back these assets and giving them to people who really have money that they can really inject, we will not be able to deliver on power,” Dangote had said.


“We should ask, how many people, who and who are these guys that have actually gone into the power sector then you will know when you see the quality of people, are they really serious, because they went in to just make money, power business is not just about money, it is a huge business when you invest heavily you will reap at the end of the day.”


Speaking at the fifth EU-Nigeria business forum in Lagos on Thursday, Fashola said those who want to get out of the agreement could, based on terms of agreement signed at the beginning of the deal, but added that total cancellation is not to be considered.


“I have heard discussions about revisiting the privatisation of power, honestly, I don’t know what it means. I’d like those who made the arguments to be specific; let them come out. Let us have a discussion; does revisiting means cancelling it?If it does, I don’t support it,” he said.


“The investors who took the plough, must have the assurance that government will not flip flop, and contracts that fail, have consequences.

Fashola Begs Nigerians To Accept Hike In Electricity Tariff, Faults Jonathan’s Privatization Of Power Sector

The Minister of Power, Works and Housing, Mr. Babatunde Fashola, SAN, has noted that the increase in electricity tariffs is the first major policy the administration of President Muhammadu Buhari is coming up with, describing same as “a painful pill,” which consumers have to “swallow.”Fashola disclosed this Monday during the second monthly meeting with stakeholders in the power sector in Lagos, where he also inspected some projects at the Alagbon Transmission and Distribution Complex.

Fashola’s comments came at a time Nigerian workers under the aegis of the Nigerian Labour Congress, NLC, Trade Union Congress, TUC, joined by Civil Society Organizations embarked on peaceful protests against the policy which has grounded commercial activities in several cities in the country.

His words, “Importantly, I understand that people who have been disappointed over a long time will feel a sense of concern that again tariffs have gone up. But the truth is that these tariffs ought to have been there from day one. I don’t know why the government of yesterday was not courageous enough to tell us this was the price.

“It is a painful pill that I must appeal that we swallow. It is like quinine and malaria. It’s painful; it’s not sweet, I know that, but I do it because we are not left with many choices. This is the first major decision in power that this administration has taken. There are other problems.

“I can only appeal for some understanding and some trust that we do this in the best interest of our country. It is a hard decision, but I think down the line, we will have cause to look…”

The minister, who faulted the way the privatisation of the power sector carried out by the immediate past administration of Goodluck Jonathan, said the sector was being plagued by several problems including gas supply shortfall and transmission issue.

Credit: Vanguard

Union Cautions FG On Railway Privatization

Federal Government has been cautioned against taking hasty decision on the planned privatization of the Nigerian Railway Corporation, NRC, which may further deplete the fortune of the organization.

Rather, the government was advised to formulate, for guided implementation, a long-term rail transport investment policy that would achieve for the nation integrated transport development, which ultimately would guarantee major future infrastructure renewals.

The Nigerian Union of Railway workers, NUR, stated these in a letter signed by its General – Secretary, Comrade Segun Esan to President Muhammadu Buhari, copied the Vice President Yemi Oshinbajo and made available to journalists in Lagos.

The letter warned that the privatization of the railway system by the government would only achieve increasing inequalities in the redistribution of wealth, which would deepen gap between the rich and poor.

Esan insisted that privatization of railway negates the great expectation of the citizenry and the “Change your great political party, All Progressives Congress, APC, promised Nigerians.”

Credit: NationalMirror

Adagboyi Damian: Privatization Or Cronyism? The Case Of Benue State

The relevance of public infrastructure has been a debatable issue in Nigeria since independence, owing to the growing demand on governments to provide rapid social development and economic growth. As a result, both past and present governments have expended huge financial resources on these infrastructures through annual subventions to the public enterprise sector. Nevertheless, a worrisome trend has drawn more concern; they continue to witness huge losses due to presence of gross inefficiency, massive looting and unprofitability. All these have made most of the infrastructures a revolving-debt-asset.

Orokpo, & Ejeh (2014), noted that while the boom in the world market for oil and petroleum products lasted, no one complained about the wastes and inefficiencies of the public enterprise sector in Nigeria.

This same boom era recorded the highest number of public enterprises establishment in the country even when their commercial financial viability was questionable. However, the fall in the world market for oil, the early 1980s economic recessions and the quest for most developing countries to align themselves with the global trend has exposed the ailing condition of public enterprises in Nigeria.

It is against this backdrop that most economists argued that one prominent rationale for privatising public infrastructure is to make money available to governments. In order words, cash trapped in such infrastructure can be used to fix ailing infrastructure and perhaps build the much needed new infrastructure by creating an enabling environment, therefore shifting future financial risk from the public to a private sector.

A visit to Makurdi, the Benue State Capital of Nigeria would reveal how well the state has fared since it was created on 3rd February 1976. The Capital does not stand out among its equals in terms of infrastructural development. It prides itself as the food basket of the nation. Yet you will agree that a good deposit of resources must allow participation from the community through employment and thereby improving the economy of that community. This is what is assumed as development and growth.

The good deposit of resources in the state prompted the establishment of infrastructures like Taraku Mills, Otukpo Burnt Bricks, Benue Breweries, Kastina Ala Fruit Juice Company, Makurdi Sheraton Hotel, and the “privatised” Benue Cement Company (Now Dangote Cement Company) among other establishments.

Most of these establishments in the State were affected in the second round of privatization scheduled to commerce in 1999. Some of the establishments that were privatised are today, in various stages of liquidation, abandoned or shut down since they have failed to meet their economic and social objectives. As a result, the people are yet to feel the impact despite their eventual privatization. And cash recovered has not been used to build new infrastructures.

However, various excuses have been given for these shortcomings. First, the age of the plant and equipment, perhaps that was not properly assessed to enable preparation for turnaround maintenance. Second, harsh macro-economic environment and rough economic terrain characterized by erratic electricity power supply. Third, there exist an intermittent or acute shortage and high price of petroleum products. Fourth, there is also a low purchasing power due to infrequent payment of salaries, and by extension very weak economic activity.

However, as outlined by Orokpo & Ejeh (2014), most core investors declared as winners of the bids generated sporadic response by the people of Benue State accusing investors’ company of lack of managerial skills and technical capacity to handle the company. Legal proceedings were even instituted against the National Council on Privatization seeking to restrain it from selling the shares to most companies. Moreover, there were complaints of lack of transparency in the entire transactions which were shrouded in secrecy and that the majority of the investing public were ignorant of the sale of the shares.

Therefore, one can conclude that although privatisation is good having acknowledged that government business is not business. However, the process of privatisation must be properly followed in order to curb the perceived culture of cronyism that exists in the process.

Orokpo F.E & Ejeh A. W. (2014), An Assessment of the Privatization of Benue Cement Company Plc, Gboko, Benue State Nigeria: 1986- 2011 International Journal of Public Administration and Management Research (IJPAMR) 2(2):88-97

FG Warns Buhari Not To Reverse Privatization Of Power Sector

The Federal Government on Wednesday warned the incoming government of the President-elect, Gen. Muhammadu Buhari (retd.), to avoid reversing the privatisation of the power sector carried out by the outgoing administration.

Minister of Power, Prof. Chinedu Nebo, said this in an interview with State House correspondents after the weekly Federal Executive Council meeting.

Nebo also attributed the poor power supply being witnessed across the country to those he called demon-possessed Nigerians who he said derive pleasure in vandalising gas pipelines for no just reason.

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