Nigeria – Privatisation Concerns

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As the government pushes forward with wide-ranging privatisation measures, rights groups remain apprehensive. 

Wide ranging privatisation measures are taking place in Nigeria, particularly within the water and power sectors, in a bid to ease pressure on already scarce resources and funds. However, according to one commentator, from the Senior Staff Association of Electricity and Allied Companies (SSAEAC) , the privatisation of the power sector was leading to the casualisation of the workforce, job insecurity, unemployment, and an increased cost of living.

“To date, companies in the power sector have adopted all manners of anti-labour practices, including denial of salaries and sacking without fair hearing,” the source said, reported the Daily Trust.

Earlier, on March 22nd, the Daily Trust also reported that three years after the privatisation of the sector was begun, a number of conflicts over employee settlements have yet to be resolved. Meetings were held in 2013 between the government and the National Union of Electricity Employees (NUEE). While around 90% of workers stated they did received payments, many, including most from the Enugu Distribution Company, said they had yet to see anything.

In Lagos, rights groups, including Environmental Rights Action/Friends of the Earth Nigeria (ERA/FoEN), have expressed concerns over the drive towards public private partnerships (PPPs) for water concessions in the state. The group had launched a campaign in 2014, entitled ‘Our Water, Our Right‘.

“As we have said time and again, the failure of the Lagos State government to open up on the controversial water PPP gives room for us to suspect that something is in the offing and the people are deliberately being kept in the dark,” said Akinbode Oluwafemi, Deputy Director at ERA/FoEN.

“Worse is the fact that the Lagos State government is toying with a failed model of PPP that the World Bank private arm – International Finance Corporation (IFC)  advised it to embark upon even with documented failures in Manila and Nagpur, in the Philippines and India respectively,” said Oluwafemi cited by the Premium Times.

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Source – Nigeria Electricity

A United States (US) lawmaker, Gwen Moore – a representative for Wisconsin -, and also a member of the Monetary Policy and Trade Subcommittee, penned a letter to the World Bank President Jim Yong Kim, which stated that the Bank and its finance arm the IFC had inadequately considered the conflicts of interest it had created upon taking stakes in water corporations.

“I am increasingly uneasy with water resource privatisation in developing countries and do not believe that the current ring-fencing policies separating the investment and advising functions of the IFC are adequate‎.”

“I would respectfully urge the World Bank and IFC to cease promoting and funding privatisation of water resources, including so-called PPPs in the water sector, until there has been a robust outside evaluation of the IFC’s conflicts policy and practices”; Moore said that the trends of water privatisation indicated an “improper mingling” of the World Bank and IFC advisory and investment functions.

In March many women marched in Lagos against the proposed plans to privatise the Lagos public water works, reported the Premium Times.

In the airline sector, the former Federal Airports Authority of Nigeria (FAAN) Managing Director Richard Aisuebeogun has urged the federal government to privatise the 22 federal airports under the auspices of the agency. He claimed that privatisation would enhance income generation and boost efficiency.

Aisuebeogun explained that the airports should be encouraged to look to aeronautical revenues to make them “more business minded, rather just being operations…we need to encourage private investments to cone into the airports and develop it in terms of non-aeronautical activities, so that the unviable airports will become Strategic Business Units (SBUs).”

In recent years there has been great demand for the privatisation of air facilities, due to scarce resources and demand in other sectors, particularly education, health, road and rail infrastructure, reported This Day.

According to campaigns and advocacy group Global Justice Now, there are serious concerns not only with the increasing informalisation, casualisation and increasing precariousness of the workforce engendered under privatisation, but also the huge amounts of money that are being directed at the move, which some have said is doomed to failure. According to the report the United Kingdom (UK) has contributed £50m towards the privatisation of Nigeria’s energy sector.

Find out more in the Africa Research Bulletin

NIGERIA: Rising Hopes, Falling Revenues
Economic, Financial & Technical Series
Vol.52, Issue.4, Pp.20811A–20812B

POWER: General
Economic, Financial & Technical Series
Vol.52, Issue.2, Pp.20727A–20729C

Nigeria’s Forgotten Crisis
Economic, Financial & Technical Series
Vol.51, Issue.11, Pp.20634A–20634B

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