By Chineme Okafor
The country representative of the United Kingdom (UK) Department for International Development (DFID), Mr. Richard Montgomery has stated the need for Nigeria’s government agencies responsible for the implementation of the privatisation programme to ensure an objective and transparent dealing in the process leading to the conclusion of the exercise.
He stated that the process should transform the country’s socio-economic fortune if properly executed.
Speaking at the 2nd edition of the Nigeria Energy and Power Summit (NEPS) in Abuja recently asked Nigeria to exercise absolute restraint in the last days of her planned privatisation of the Power Holding Company of Nigeria (PHCN).
Montgomery observed the efforts by Nigeria to privatise the PHCN and subsequently liberalise the power sector was gradually coming to a crescendo with a scheduled conference on transaction processes initiated by the Bureau of Public Enterprises (BPE) and Nigerian Electricity Regulatory Commission (NERC) at the State House this week to explain to stakeholders some of the essential details in the process.
The UK envoy however asked Nigeria to trade PHCN assets slated for sale with care, noting that there was no need for hasty disposal of assets to incompetent investors that would not add real economic value to the exercise after all.
Montgomery noted that the success and failure of the privatisation process would not be judged by the number of transactions that take place considering the overwhelming interests from prospective investors but by the quality of transactions to be conducted by the government.
To this end, he said, “the most critical phase of the reform now beckons with the implementation of the transition market and submission of detailed bids for those companies being privatised. We should not judge the success or failure of privatisation by the number of transactions that happen but by the quality of those transactions.
If bids of sufficient quality are not received for some assets, it will be far better to retain those assets and have a second round of sales later than to sell to bidders who may not deliver on their commitments.”
In his analysis of Nigeria’s chances of evolving a credible and enduring privatisation regime for her power sector, Montgomery said, “The coming weeks will be crucial in the reform process and by implication for Nigeria as a nation. Despite the efforts that have been made, there is still much to do before the government can be confident of attracting good investors.
“The government must ensure bidders have both the policy framework and information needed and there can be no successful reform without a realistic tariff for electricity, it will also be hard to attract good bidders unless there is a resolution of outstanding labour issues but I now the government and its agencies are working hard to deal with these issues.”
He also commented on organised labour’s opposition to the privatisation exercise, which he described as a normal development associated with such large scale reform process.
According to him, “The reform process will see much of the sector coming under private sector control. This shift of ownership is not welcomed by all but more private sector involvement in Nigeria’s power sector represents the best hope of attracting the enormous amount of investment needed by the sector, but the process must also reflect absolute transparency and genuine competitiveness.”
“I would ask all those involved to remember every day just how much this reform matters to Nigerians. The failed reforms of the past have left millions more in poverty in this country than would have been the case had the country had better power supplies, getting the reform right is key to stronger businesses, a growing economy across the country with more jobs and better incomes in the years ahead,” Montgomery added