CONTENTS | ANB-BIA HOMEPAGE | WEEKLY NEWS
by Joseph Seydou Allakaye, Niger, May 1999
THEME = SOCIAL CONDIT.
A difficult pill to swallow. For and against privatisation
Ever since the structural adjustment programmes began to be imposed on African countries by the Bretton Woods Institutions, Niger has not been able to escape the trap. The workers said "no" to privatisation but eventually had no choice but to submit. The Nigérien Textile Company (SONITEXTIL) was privatised in 1997, to be followed in 1998 by the Nigérien Milk Marketing Board (OLANI) and the Nigérien Cement Company (SNC).
From the eighties onwards, millions of companies have been privatised throughout the world and this continues to take place more or less successfully both in Europe and in Africa. But why has privatisation had to take place? The reality is simple: In spite of major State support, companies were not able to make any headway. The main reasons for this were weak management and interference on the part of the State.
Most countries wanted to pull out of state intervention in trading and business enterprises, in order to concentrate on such important issues as financing national infrastructures such as health, education, providing clean drinking water and sufficient food. All this so as to ensure the well-being and development of the general population.
In these areas, poor countries such as Niger are sadly lagging behind with their blatant insufficiencies. With a level of scholarisation of 29%, illiteracy at 83%, health cover at only 32% and drinking water for only 41% of the population, Niger is classified among the poorest countries in the world. A growing imbalance between the rate of demographic growth (estimated at 3.3 % per annum) and the Gross National Product (GNP) (evaluated at 1.7 % on average during the years 1983-1994), adds to the continuing impoverishment of the population of whom 63% are classified as "poor" and 34% as "very poor".
These negative factors have brought on a substantial reduction in public expenditure for investment, fallen from 25% of the GNP in 1980 to 5.1% in 1993, thus causing a cut-back in the effectiveness of the social services in a country where there is an extreme need for such services. Consequently, it was deemed necessary to take measures aiming at reviving the economy through a better distribution of functions.
Why should State enterprises come under attack? In spite of everything, Niger has considerable possibilities which could be converted into assets, as long as appropriate policies are drawn up and applied in view of economic growth and social progress. For that reason, the State decided to get out of business activities (i.e. anything to do with production and distribution), in order to consecrate itself to essential public services and to the upkeep of those massive national infrastructures which cannot be taken on by the private sector.
This changing to a different course is all the more pertinent in that the public sector can't escape from the effects of the economic crisis (chronic deficit, treasury difficulties, lack of control over expenses, excessive debts, freezing investments, dilapidated state of production methods, etc.). Nonetheless, this sector is an important lever in the development of the national economy. In fact, in 1996, despite the sorry state of the economy, sixty enterprises accounted for 57% of the number of all businesses in the modern business sector.
According to the data given in national statistics, this number dropped by 32% from 1986 to 1992, and the total value of the businesses by 40% during the same period. The average output per worker also dropped by 22% in nine years (1986-1994), while the average individual salary increased by 30%. At the same time, the debt accrued, leaving aside the mining sector, increased by 90%. All this creates serious problems when it comes to managing clients' portfolios, with the risk involved therein for the very survival of certain companies.
As might be expected, all this sounded warning bells for those responsible for ensuring the well-being of the national economy. Obviously something had to be done to revitalise the public sector. So what's been happening? The State has undertaken to "cut off the dead branches", by eliminating non-viable entities; pruning those still capable of profiting by some restructuring, and transferring many enterprises to the private sector. Thus, a dramatic effort has been made to revitalise the public sector in many of its essential areas so that the economy's downward trend can be halted.
The World Bank is backing Niger's privatisation programme. The main objective is to make the concerned sectors more competitive, effective and accessible to as many as possible. At the moment, it's a question of privatising eleven enterprises. The programme will reach its optimum level during the period 1999-2000 with the final stages of the following state-run companies' privatisation programmes: the Nigérien Water Company (SNE), the Nigérien Electricity Company (NIGELEC), the Nigérien Telecommunications Company (SONITEL), the Nigérien Petroleum Distribution Company (SONIDEP) plus other smaller state-run enterprises.
Expected effects of all these operations:
What's the legal framework for Niger's privatisation programme? There are three legal texts which form the juridical basis: Statutory Instrument number 96-062 of 22 October 1996 which determines the list of enterprises to be privatised; Statutory Instrument number 96-075 of 11 December 1996 on the general conditions of privatisation; Decree number 96-464 of 11 December 1996 on the modalities of applying the general conditions of privatisation. Also, the State has set up structures to oversee the creation, the execution and the supervision of the privatisation programme. In order to make secure and to guarantee the integrity and quality of the privatisation operation and to show a positive image of Niger potential to investors, those in charge of the programme work along the lines fixed by the government, i.e.:
With this in mind, the privatisation procedure as put into practice today, takes the following steps: first of all a series of studies; then implementation of the privatisation strategy; this is followed by selecting the new owners; then comes the negotiation and signing of the transfer documents; finally, the actual transfer of control to the new owner.
Despite all these apparently tempting guarantees, Niger's government considered it necessary to launch an in-depth campaign to inform the people and eventual potential investors, of the soundness of privatisation. The reason for this is that the majority of the trade unions, especially the Niger Workers Union, refused to have anything to do with privatisation and condemned it, lock, stock and barrel.
According to the workers, the State is simply selling-off public enterprises to relatives, friends and acquaintances. Moreover, they say that the State, in freeing itself from the enterprises, is doing nothing other than simply opting out of its responsibilities. Many Nigerian nationals, who work in the enterprises already targeted, fear for their employment and of finding themselves on the street.
Even in the case of compulsory privatisation, the employees demand they should be part of the negotiations to avoid being tricked by the State. Once the die is cast, who knows! Many citizens live in the hope that privatisation will at least oblige the new owners to provide quality service with competitive prices. For, as they say, competition brings with it binding conditions.
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CONTENTS | ANB-BIA HOMEPAGE | WEEKLY NEWS
PeaceLink 1999 - Reproduction authorised, with usual acknowledgement