by Peace Oluwadara, AJALA

Policy Issues: Public Health, Institutions and Development.

The Medical and Health Workers Union of Nigeria on Wednesday kicked against the decision of the Federal Government to withhold the April and May salaries of its members over government’s No Work, No pay policy. The MHWUN also alleged that the FG was planning to privatise public health institutions, vowing to resist the move. “We are also opposed to moves to privatise public health institutions because we know privatisation is not the solution. Corruption should be eliminated from the system. We have indices of how public health institutions run abroad. But in Nigeria, over 78 per cent of health institutions are privately owned, yet we have poor health statistics.”

Comments       

“The Revenue forecasts in the macroeconomic framework, however, do not take into account ongoing initiatives to increase revenue via privatisation of selected public enterprises/assets as well as some tax review initiatives aimed at expanding the tax to GDP ratio.”[2]

  • Page 49, Nigeria Economic Recovery & Growth Plan 2017-2020

The concept of privatisation dates back to the 19th century, beginning with the Germans and gradually became adopted by economies round the world.[3] This newfound faith in privatization has spread to become the global economic phenomenon of the 1990s. World over, governments began turning over control of everything to private managers, from electrical utilities to prisons, from railroads to education.[4] For decades now, developing countries have hastily joined this fray for privatization, most often to raise revenue. The same intent lies at the core of the ERGP Policy document, where it highlights privatisation of select public enterprises as one of its goals.

There however seems to be a challenge with this intent; other important variables seem to have been jeopardized for this sole desired outcome. True, privatization is an easy means to reduce the financial and administrative burden of the government, particularly in undertaking and maintaining services and infrastructure and in promoting competition. There is however one important variable that ought to be concern of every stakeholder in government – the interest of the people. If a public enterprise seems to be failing in its delivery of a public good or service, although privatising it may bring immediate revenue, is there any guarantee that the interest of the people will be better represented? There are diverse other ways via which the Nigerian government can generate revenue; revenue generation is in fact, a laughable subject matter seeing as there has been no consistently apparent proof of work done with already-generated revenue. This is by no means an opposition of the ERGP’s highlighted goal; it is rather a call for a focus shift. Trade-off is a daily feature of decision-making processes in governance. Though privatisation may yield immediate revenue, what is the long-term implication of same, on the economy on the delivery of vital services to the people?

Should the emphasis perhaps be on bettering public accountability and transparency rather than wealth amassing? Where priority is given to retraining civil servants and putting in place effective mechanisms to enhance service delivery, the public sector may be able to ensure greater efficiency in achieving the public and national interest. The failure of public enterprises may simply be narrowed down to the weakness of our institutional structures and the players therein. Leakages can be controlled; public-sector waste and borrowing can be reduced to its barest minimum; excessive allowances paid to public office holders can be cut down; promotion and benefits should be incentives for diligent and efficient work, not mere statutory entitlements that flow whether or not work is being done. Unfortunately, the opposite is the rhetoric and initiating a move beyond this rhetoric seems an arduous task.

Privatization may postpone a fiscal crisis by temporarily reducing fiscal deficits, but the public sector would lose income from profitable public sector activities, and be stuck with financing and subsidizing unprofitable ones. Going by recent years of experience, the fiscal crisis may even deepen if the new owners of profitable SOEs avoid paying taxes with creative accounting or due to the typically generous terms of privatization.[5] The interest and welfare of the people ought to be at the heart of policy and decision making. Privatization gives priority to profit maximization, typically at the expense of social welfare, equity and the public interest. It tends to adversely affect the interests of public especially poorer consumers who may not be able to afford costs imposed on healthcare for instance if all government hospitals were to be privatised.

One reality that is worthy of note is that private ownership does not necessarily translate into improved efficiency. A profit-seeking enterprise may not, for example, choose to provide health care to the indigent or extend education to poor children. Efforts to make such services equally enjoyed may require the re-introduction of government intervention. The result of this may be less appealing than if the government had simply continued to provide the services in the first place. What is the proper role of government in a capitalist economy? Is Nigeria a capitalist economy at all? Or is there a conflict of philosophical ideologies governing the Nigerian state? Are we a capitalist state, socialist state or a hybrid of both? What is the prescribed role of the government in any of the three instances and where does our clime fit in?

While several privatized enterprises have flourished and served the people, certain sectors may be too delicate to fully place in the hands of profit-seeking capitalists, lest the life expectancy situation in the state exacerbates beyond its current state.

 

[1] This article was taken from The Punch Newspaper. Available at: https://punchng.com/55-year-old-father-allegedly-molested-daughters-for-nine-years/. Date Accessed: 04/07/2019.

[2] Ministry of Budget and National Planning; Nigeria Economic Recovery & Growth Plan 2017-2020.

[3] Kämmerer, Jörn Axel; Privatisierung: Typologie Determinanten Rechtspraxis Folgen. Available at: https://books.google.com/books/about/Privatisierung.html?id=zjt9XGhhVjcC. Date Accessed: 04/07/2019.

[4] Harvard Business Review; Does Privatization Serve the Public Interest? Available at: https://hbr.org/1991/11/does-privatization-serve-the-public-interest. Date Accessed: 04/07/2019.

[5] Inter-Press Service News Agency; Privatization the Problem, Rarely the Solution. Available at: http://www.ipsnews.net/2016/10/privatization-the-problem-rarely-the-solution/. Date Accessed: 04/07/2019.