21 April 2014

Nigeria: Labour Cautions FG Against Adoption of IMF Privatisation Policies

The organised labour has called on the federal government to take a critical view of the economic prescriptions of the World Bank and the International Monetary Fund (IMF) before the adoption of such policies.

Speaking against the background of plans by the federal government to privatised the nation's refineries, the Trade Union Congress of Nigeria (TUC) cautioned government against adopting policies that will further hurt the economy and impoverish Nigerians.

Chairman, Rivers State Council of TUC, Mr. Chika Onuegbu, who made this submission, argued that the fact that the prescriptions of IMF are working in Europe and America does not necessarily mean that the same policies will work for the Nigerian economy.

He said: "It is no longer news that SAP gave a fatal blow to Nigerians and the Nigerian economy. Some of these prescriptions like SAP are like seeds that grow well in Europe and America but when planted in Nigeria, die and poison the ground."

Onuegbu, who is also the Public Relations Officer (PRO) of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), argued that much of the gains ascribed to privatisation by the proponents of the policy are actually gains from other reforms.

"For instance in Nigeria, the government did not privatize NITEL for MTN, Econet(now Airtel) etc to sprout and grow. They simply created the enabling environment and the GSM companies reacted appropriated. The rest is now history," he said.

Regarding the planned sale of the nations refineries, Onuegbu explained that labour have consistently advised government to create the enabling environment that will enable private business invest in refineries.

He suggested that effective incentives should be granted to allow for the development of private refineries alongside the existing refineries stressing that a framework should be articulated that will make available required crude for effective functioning of local refineries.

"There is need to incentivise and/or compel IOCs to refine an agreed percentage of crude oil in the country. A suggestion is to tie upstream licensing to downstream investment. In addition, private ownerships of Jetties should be encouraged.

"We also suggested that the nation's four refineries should be stand-alone entities independent of the proposed National Oil Company (NOC).The NOCs will hold the government shares. The management of each refining company should be autonomous and fully responsible for its success and failure," he emphasised.

Speaking further, he said the debate on the impact of privatisation is still ongoing, noting that the Economist Magazine had on February 2014 conducted a debate on privatisation and the result still affirms that there are divergent views by economists on privatisation as a policy.

This, he said underscores the need for Nigerians and Nigeria to take a critical view of the economic prescriptions of the Breton wood institution before adoption its policies.

According to him, whilst the arguments for and against privatisation rages, one thing is clear, privatisation "remains widely and increasingly unpopular, largely because of the perception that it is fundamentally unfair both in conception and execution."

Moreso, he said, politicians have many a times used privatisation as a vendetta against trade unions.

Citing example of Margaret Thatcher's administration in the United Kingdom, Unuegbu said: "Whether as a deliberate policy to victimise unions or not, privatisation of state owned enterprises has several implications for trade unions, the sum total of which has been the decline in the role and influence of trade unions."

The situation, he said, is made worse by the inability of trade unions and union leaders to also restructure and transform themselves.

"There appears to be an agreement among scholars that privatisation of State Owned Enterprises (SOE) has some adverse effects on workers and their trade unions. This should not be a surprise as the politicians have in many cases used privatisation as a punitive action against trade unions.

"It is therefore very important that the labour movement restructure and transforms itself to be better prepared for changes in the environment of labour relations such as privatisation. As aforementioned, this restructuring and transformation of unions can only be driven successfully by the leadership of trade unions," Onuegbu added.

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