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The decision of the Federal Government to inaugurate four technical working groups to review and implement a strategic roadmap for the resuscitation of ailing government-owned companies across the country is commendable. Inaugurating the groups recently in Abuja, the Director-General, Bureau of Public Enterprises (BPE), Alex Okoh, disclosed that the initiative was in line with deepening the ease of doing business in the country, as well as in keeping with government’s Economic Recovery and Growth Plan (ERGP).
The four areas of focus include: automobile, housing (bricks and clay), mines and steel as well as the palm oil sectors. According to the terms of reference, the working groups will conduct diagnostic study on the enterprises in order to identify their current status (operational and financial positions) and conditions in terms of ownership, share structure and capacity utilisation. Additionally, they are expected to prepare a business plan that meets the present sectoral requirements, examine the challenges in the sectors and develop a detailed five-year (2023-2027) turnaround programme for each of the non-performing enterprises. Also, the groups have been mandated to review and advise the government on the processes and implementation of the turnaround programme, among others. These are, indeed, crucial areas that will impact the economic development of the country.
It is heart-warming that the event was part of the efforts of the various stakeholders that began in 2018 to revive dying government-owned enterprises. According to the BPE Monitoring and Evaluation report, 16 per cent of privatised companies are comatose. The result of the findings had long been submitted to the National Council on privatisation and the Senate Committee on Privatisation since 2020. This resulted in the meeting of stockholders to fashion out the best way to revive the ailing companies. The members of the groups have their work well cut out for them, which entails deploying their expertise to revitalise the non-performing enterprises.
Without doubt, the listed sectors are critical to the growth of the economy. For example, before the discovery of crude oil in Nigeria in 1956, the palm oil sector was one of the greatest contributors to the economy. But the reliance on crude oil has exacerbated our economic woes. Nigeria needs to build a robust, diversified export basket of other commodities that will create jobs, earn foreign exchange and attract foreign direct investments. The revival of the automotive industry, mines and steel, palm produce and housing, will grow the economy beyond oil. Let there be full implantation of the revival plan.
With adequate strategy, the Nigerian market can equally profit from the businesses in the sub-region and Africa. What is needed is political stability, security and improvement of the ease of doing business. Available records show that Nigeria stands to earn about $50billion (over N2.5trillion) annually from solid mineral deposits and steel. Currently, mining and steel contribute less than two per cent to the nation’s Gross Domestic Product (GDP). Nigeria is endowed with over 400 solid minerals in different states of the federation. However, many of them have not been fully unexploited. It has been estimated that Nigeria could earn about N8trillion from gold annually. The Ajaokuta Steel Complex, which is yet to be completed, is one of the ailing companies that ought to be given priority attention.
Nigeria’s automobile industry can be further encouraged by giving indigenous manufacturing companies tax waivers. In the same vein, the mining, steel and agricultural sectors need urgent reforms. The government can do this by initiating and implementing policies that will stimulate interest in these areas, while some incentives are required to promote private sector participation. In the palm oil sector, we believe that the private investors will do better. This has been proved with the successful revival of Adapalm project in Imo State by private investors. The panel set up to revive these ailing companies must address the factors that led to their non-performance and recommend measures that will make them perform optimally. We also call for a bailout package for the ailing companies and others in need of such interventions. It is also important that the boards of these companies should initiate innovations by introducing new services, recruiting the right staff and reducing their operational expenses. They can also break down their business financial needs into sizeable levels tied to specific needs. In all, reviving the ailing companies will create more jobs and stimulate economic growth and development.
