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DECREE 25
In line with the Igbo proverb popularized in “Things Fall Apart“ that a man who does not know where the rain began to beat him cannot say where he dried his body”, we must begin to think of where this heavy rain began to beat us in Nigeria so as to know what exactly went wrong and how best to address it. As many Nigerians already agreed which I discussed two weeks ago on this column with the title “A Journey to Yesterday”, the first rain started beating us after the discovery of crude oil in commercial quantity in 1956 in Oloibiri and we ungratefully ta-ta agriculture as the mainstay of our economy. In the article, I discussed that the havoc the act of leaving agriculture as our economic mainstay has done to this nation can only be reversed with a deliberate decision to returning Nigeria into an agricultural export-driven economy as it then was.
Adding to the lost agricultural sorry glory, was the implementation of a free market economy which according to Babatunde Fashola during the 2024 edition of Pastor Poju Oyemade’s The Platform, started with Decree 25 of 1988 which was amended in 1999. This Decree which was called Privatization and Commercialization Decree gave birth to the Technical Committee of Privatization and Commercialization (TCPC) that was legally empowered to commence changing ownership restructuring of government enterprises in favour of private involvement and likely take-over. This according to Fashola led to the commencement of Nigeria’s free market economy that was started by the military. So, the concept of privatization and commercialization that led to free market economy was where the second rain started beating us judging by the way the privatized and commercialized enterprises were mismanaged.
Breaking it down at The Platform to those too young to understand where Nigeria was before privatization and commercialization began, Fashola explained to the audience that at one time in this country, banks, newspaper companies, radio, television, telephone and other businesses that are now run by the private sector were formerly in the hand of government but Decree 25 led to the journey of privatization decree where government started yielding the space. It was this process that led the Bureau of Public Enterprises (BPE) which is the agency of the national council of privatization to undertake the selling, privatizing and concessioning of about 234 public enterprises.
Among such enterprises according to Fashola were 32 agricultural mechanization businesses, 31 banking and insurance companies, 15 cement companies, 14 energy construction and service companies, 13 hotels, 9 industrial and manufacturing companies, 13 oil and gas companies, 31 ports were concessioned or sold, 22 power companies, 32 mine and steel businesses, 8 automobile companies, 4 paper and package businesses, 4 sugar making companies and one telecom company which is NITEL.
So, the glorious day of Nigeria with free education, gainful employment, quality social services and others that the present crop of leaders enjoyed was the period government was in charge of these businesses before advocate of market economy came to subvert that smooth process and everything began to fall apart. Upon this however, the major feature of market economy which is the unhindered cooperation of the forces of demand and supply, where consumer reign supreme became illusion. Industrialists then took over the country as their private properties and fix prices of commodity at will without government being able to do anything and also leaving consumer with no choice than being subjected to daily inflation of prices of commodity.
Freedom of participation which is supposed to increase innovation that will create new products and other services in free market economy was not generous at all in Nigeria’s case. Rather, it was restricted to the friends of government who now control consumers’ choices instead of consumers driving choices. The aged long monopoly in both production and distribution of cement is a typical example in this direction where Dangote Cement controls about 60.6%, Lafarge Africa Plc 21.8 while BUA Group controls 17.6%. This has recently made Cement Producers Association of Nigeria to call on the government of Bola Ahmed Tinubu to end the monopoly in the sector because profit margin of these three companies is well over 300% which is a far cry from what obtains in developed economies like Taiwan, China, Switzerland, Mexico and others with only 13% to 17%. This undoubtedly bears so many burdens on Nigerians.
Sad also is the demand by CEPAN of government to probe alleged utilisation of N13.2 billion Cement Technology Funds that was initiated during Yar’Adua administration as part of the effort of government to reduce the price of cement in order to ensure price stability across the nation. This similar natural monopoly that makes it hard for other business to enter the market in a free market economy like ours, has left the control of the country and Nigerians in the hand of some of these individuals without government being able to arrest the situation and to help its people.
In a free market economy, government plays integral role of promoting the system by enforcing legislation that limits activities that will detract from a competitive environment, supporting business efficiency as well as regulate how business treats consumers and worker to maximize efficiency. This process will in turn lead to increase productivity that motivates workers to earn more money in order to supply their needs and to live comfortably. But this is not so in Nigeria because of the absence of any form of government regulation that is tailored towards the masses but only towards the rich. In addition, a free market economy gives freedom, stability, security, growth opportunity, justice and securities to consumers but these are however absent in Nigeria’s situation? Our security system is zero, justice is not justice-able, everything is unstable as prices of commodities increase on daily basis whereas growth is an illusion. Where then is the freedom from free market economy?
As Fashola pointed out the example of Singapore which is considered to be free economy according to the 2024 index, the foundation of Singapore’s economic freedom is sustained by strong protection of property rights and effective enforcement of anti corruption laws. According to Fashola, we must begin to apply Singapore model which is a model of “tough love,” a process whereby once the price of any commodity rises including global oil or energy prices, within 90 days, government indexes it either up or down because of its sufficient knowledge, education and enough time to integrate into the practice of democracy and the reality of market economy. This is what we need in Nigeria at this time.
Nigerian government should be alive to its responsibilities and not leave its function to individual. For instance, the responsibilities of Price Control Board of Nigeria are to regulate the prices of all commodities and ensure that the marketers comply with the prices which must be comparable with the income of the civil servants but this function has been long abandoned as marketers now fix prices as it please them with no government intervention. Government should therefore make effort to revamp the Price Control Board of Nigeria without delay.
Another important sector government should take over is the Power Holding Company of Nigeria which was unbundled in 2013 and 18 utility firms sold to private investors. Despite the long year of unbundling this sector, between 2017 and 2020, the total intervention fund to the sector from governments and other international bodies was about N3trn. Yet it is a privatized sector! This is definitely unsustainable because no practical improvement has come from the sector to Nigerians so far.
Also, government should try at all cost to avoid monopoly like in China. There is no reason State Owned Enterprises (SOE) cannot exist side by side with private in order to avoid monopoly. China for instance with his commercialization model has about three SOEs in telecoms services, three in oil and gas and many other with stringent laws against corrupt SOEs directors and managers. Nigerian government should therefore be deliberate and critical in this direction.
There is no law no matter how potent or business policy that can work without a genuine enforcement system that is devoid of sentiment with absolute disregard to the culture of impunity as it currently operates in Nigeria. Therefore, some of these policies which Fashola refers to as “tough love” which work in Singapore, China and others like Brazil can also work in Nigeria if government can be sincere with itself and the people it serves.
Olushola Omogbehin a public affairs analyst writes from Abuja
