As Onagoruwa Gets The Sack At Last, Experts Weigh Implications

02 Dec 2012

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Ms. Bolanle Onagoruwa

Reactions have continued to pour in, in torrents, over last week’s sack of former Director-General, Bureau of Public Enterprises (BPE), Ms. Bolanle Onagoruwa. However, opinions are as diverse as the number of economic affairs commentators who weighed the pros and cons of her sack, reports Festus Akanbi

As the curtain was drawn over the tenure of former Director-General, Bureau of Public Enterprises (BPE), Ms. Bolanle Onagoruwa last week, economic affairs commentators were divided over the implications of the decision of the Presidency to dispense with the services of the privatisation regulator. Although no reason was given for her removal, keen watchers of the combative relationship between BPE and the leadership of the Bureau of Public Procurement (BPP) early in the month over the engagement of Canada’s Manitoba Hydro Electric to manage the Transmission Company of Nigeria had every cause to believe that Onagoruwa’s exit was a matter of time.
However, reactions to the change of baton at the BPE were still pouring in by the weekend.

Head of Research and Intelligence, BGL Plc, Mr. Olufemi Ademola, said contrary to the fears expressed by some members of the public that Onagoruwa’s sack could derail the all-important privatisation programme of the Federal Government, the decision of the government to hand over the baton to the officer next in command should be seen as a proof of government’s determination to ensure there was no vacuum.

“In relation to the sack of the DG of the BPE, I don’t think it creates any gap that cannot be filled by the Acting DG Benjami Dikki. There have been a lot of criticisms of Ms. Onagoruwa before her sack and I understand she had also planned to resign earlier,” the BGL official said.

When asked if the sack could engender a suspension of the bureau’s activities, he warned that such a consideration could delay the privatisation of some corporations. Ademola said: “We have a number of corporations that require privatisation which the BPE is working on, suspending the bureau will lead to avoidable delays that can eventually derail the programmes.
“I am not in favour of any suspension of the bureau but for continuity, which the appointment of Dikki indicates.”

Will Privatisation Agenda Still Continue?

But an Abuja-based management and financial consultant, Mr. Odilim Enwegbara, argued in favour of the suspension of the privatisation programme.

He told THISDAY that, “There’s the need to suspend the ongoing privatisation until the house of BPE is put in order so as to ensure the credibility of the outcome.”

Throwing his weight behind the National Assembly probe report, Enwegbara said, “Lawmaking is never based on narrow issues. That is based on careful evaluation of diverse interests. That’s why we have 360 House members and 109 Senators.”
Why Keeping Mum

However, investment analysts are querying the federal government for the failure to disclose the nature of infraction that caused Onagoruwa her job.
Managing Director, Financial Derivatives Company Limited Mr. Bismarck Rewane said, “All over the world, you don’t remove people of such calibre from their position without disclosing why such action was taken.”
On the assumption that the former BPE boss was sent packing in line with the recommendations of the National Assembly, Rewane said the National Assembly has no executive power to get public officers out of office and that the president cannot be compelled to yield to their pressure.

By firing the BPE boss at the peak of the ongoing privatisation, government, he said, had unconsciously heightened the degree of uncertainty over the privatisation programme.

“Since government hasn’t disclosed her sins, nobody knows what is going to happen. The timing is at best curious; no information about the sack; it appears arbitrary, if she has done something bad, the government should say so,” he said.
Rewane stated,“It’s a curious development in terms of the timing and very disturbing from an investor perspective, “It is a major setback and would make international investors more wary.”

The federal government, is selling majority stakes in power plants and letting private investors buy as much as 60 percent of 11 distribution companies spun out of the former state-owned utility as it seeks private investment to curb power shortages.
Demand for electricity in the country is almost double the supply of about 4,000 megawatts and the government plans to boost output to 14,019 megawatts by 2013.

Bids from companies including Siemens AG (SIE) and Korea Electric Power Corporation for 10 state-owned power distribution companies were approved by the National Council on Privatisation headed by the vice president on October 29. Buyers are required to provide bank guarantees for 15 percent of the price within 15 days and complete payment within six months.

The privatisation agency is also yet to resolve conflicting claims to the ownership of Aluminum Smelter Company of Nigeria it sold to United Co Rusal, with the Abuja-based Supreme Court ruling in July that another company, Bancorp Financial Investment Group, had “a valid contract” for the smelter in 2004.

“What investors would like to see is a sustainable and entrenched privatisation process that is not episodically reversed in specific cases and subject to political influences,” Samir Gadio, a London-based emerging markets strategist at Standard Bank was quoted by Reuters as saying.

In his opinion, Chief Executive Resources and Trust Company, a leading strategy and business advisory group, Mr. Opeyemi Agbaje, said in spite of the manner of her removal, the former BPE boss did well while in office.

“I will say she did Ok. But there has been a long- standing attempt to make her a scapegoat for the deficiencies of the privatisation process, especially those that occurred long before this administration came in. I see her sack as part of broader anti-privatisation agenda,” he said.
“I wonder what signals it will send to investors both within and outside the country, monitoring the privatisation process,” he added.
Managing Director Cowry Asset Management Limited Mr. Johnson Chukwu said it was unfortunate that she is leaving unceremoniously, given her length and level of service to the bureau. “I, however, do not think that her exit will affect the ongoing privatisation programme, most especially the privatisation of the power sector,” he said.

Harvests of Speculations
Speculations were rife that the presidency came under pressure to remove Onagoruwa following the recommendation of the Senate after its investigative hearing into the non- performance of privatised firms.  The Vice-President and Chairman National Council on Privatisation (NCP) Namadi Sambo had last year passed a vote of no confidence on the bureau.

Sambo had declared that, “the situation got worse in September when the National Assembly was locked in a battle with the Presidency over alleged poor implementation of the 2012 budget”.

Part of the conditions of the lawmakers, was the implementation of their report, which recommended the removal of Onagoruwa and Abdulrahman Maina, Chairman, Presidential Task Force on Pensions.

Onagoruwa, who took over from Irene Chigbue in 2010, had received knocks over the implementation of the power reform.
Apart from the Manitoba contract saga, some observers believed that the President might have bowed to pressure by the National Assembly. The Senate had recently adopted the report of its ad hoc committee on privatisation and commercialisation, which called for Onagoruwa’s sack for alleged gross incompetence in the management of the process and for alleged illegal and fraudulent sale of the five per cent of Federal Government’s residual shares in the Eleme Petrochemicals Company Limited.

While reacting to the development on Tuesday, the Chairman, Senate Committee on Public Accounts, Senator Ahmed Lawan, commended the President for finally removing Onagoruwa.

Lawan was the chairman of the ad hoc committee that probed privatisation of government enterprises since 1999 till date and recommended the sack of Onagoruwa as BPE director-general. The committee also recommended the criminal investigation of past directors-generals of BPE and their appropriate sanctions.

Onagoruwa’s alleged sins, according to the committee, included her role in the attempt to fraudulently sell off Federal Government’s five per cent equity in the Eleme Petrochemicals. Lawan further cited the recent Supreme Court judgment, which invalidated the sale of the Aluminium Smelter Company to Rusal, saying that it was a fraudulent deal between BPE and the Russian firm. He said the judgment also confirmed the recommendation of the Senate that the sale be revoked.

He added that Onagoruwa showed gross incompetence in the handling of the privatisation process and ought to have lost her job a long time ago.

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