Speech Delivered By Oyo State Governor, Sen. Abiola Ajimobi, At The Official Handover Ceremony Of The Ibadan Electricity Distribution Company To The Integrated Energy Distribution And Marketing Limited

BEING TEXT OF A SPEECH DELIVERED BY HIS EXCELLENCY THE GOVERNOR OF OYO STATE, SEN. ABIOLA AJIMOBI, AT THE OFFICIAL HANDOVER CEREMONY OF THE IBADAN ELECTRICITY DISTRIBUTION COMPANY TO THE INTEGRATED ENERGY DISTRIBUTION AND MARKETING LIMITED, TODAY NOVEMBER 1, 2013 IN IBADAN, OYO STATE.

Protocols.
I am very delighted to be at this occasion today, which is the official handover ceremony of the Ibadan Electricity Distribution Company Plc (IBEDC) to the Integrated Energy Distribution and Marketing Limited. This is a major demonstration that the Nigerian government is in tune with the current trend of global economics which advocates the transfer of ownership of government enterprises to the private sector.
2. Privatization policies are being carried out with renewed vigour in virtually all the countries of the world. Perhaps one of the greatest exponents of privatization in the world was the late Prime Minister of Britain, Mrs. Margaret Thatcher. In 1979 when she came into office, government ownership of enterprises accounted for 11.5 of Gross Domestic Product, but by June, 1987, the figure was down to 7.5 per cent. This led to the transfer of over half a million employees to the private sector and the resultant push in the economy of Great Britain.
3. This privatization policy which has become the in-thing in the world is a product of the economic theory of Scottish moral philosopher and pioneer of political economy, Adam Smith. In 1776, in his classical book entitled The Wealth of Nations, Smith argued that when Crown lands are sold in the monarchy of Europe, it will produce a very large sum of money which could be used to pay public debts and that the Crown lands, in the course of few years, would be well maintained and well cultivated. This indeed is the foundational philosophy of privatization.
4.  Like Adam Smith counseled, the Nigerian government has also realized that, to make way for improvement in the operations of our own Crown lands, one of which, in this case, is electricity and its distribution, there is the need to leave the whole process in the hands of private operators.
5. Private ownership of enterprises is very important and will positively affect the performance of such enterprises. Throughout the world, it has been proved that state ownership of enterprises encourages indolence, massive corruption and ultimately, meager production. I want to agree that our challenge over the decades in Nigeria in the energy sector can effectively be countered with an efficient and highly professional private sector organization.
6. To buttress this assertion, studies of the Nigerian government ownership of enterprises between 1970 and 1983 revealed dwindling returns on investment and acute under-performance. By 1983, the Federal Government had invested about N23 billion equity and loans in its state-owned enterprises. Indeed, about 40 per cent non-salary recurrent expenditure and 30 per cent of its capital investment budget were devoted to them. Alas, in spite of these huge investments, the overall performances of these state-owned enterprises were nothing to write home about. The returns on the investments that accrued to the government were in fact less than N500 million annually.
7. The world is moving towards privatization and Nigeria cannot afford to be left behind. Private enterprise reforms evenly distribute income and broaden ownership of assets, as well as providing greater opportunities for entrepreneurship.
8. As we all know, energy is key in the desire of any nation for economic advancement. Once Nigeria gets past the challenge of her acute energy crisis, she may be said to have effectively moved up on the ladder of becoming a country to be reckoned with in the comity of nations. This was apparently the consideration of the Federal Government in the privatization of the eleven successor distribution companies that were created out of the Power Holding Company of Nigeria.
9. I was told that the Integrated Energy Distribution and Marketing Limited, which is now the owner of the Ibadan Electricity Distribution Company (IBEDC), emerged out of that exercise after submitting the most financially and technically competitive bid. This led to its selection as the strategic investor to acquire majority stake in the issued shares of IBEDC.
10.  I congratulate the Integrated Energy Distribution and Marketing Limited for its success in that endeavour and the ultimate acquisition of the IBEDC. I have no doubt that the process of your emergence as the preferred bidder of this company is an affirmation of your great antecedents and pedigree of hard work.
11. I enjoin you to bring to bear all those superlative qualities which led to your choice as the preferred bidder of the Ibadan Electricity Distribution Company on the energy distribution of Ibadan and environs that are under your jurisdiction. The efforts of this administration at changing the lives of our people and ensuring better condition of living for them are premised greatly on the availability of power to run the people’s different enterprises. I am convinced that you would not disappoint in this regard.
12. I also urge you to take into consideration that being a greatly rural environment that is gradually shedding that toga, the economic power of our people is still very minimal. In this consideration, I canvass a relatively relaxed billing system relative to the economic empowerment level of our people from you.
13. Distinguished ladies and gentlemen, let me congratulate us all who make up the Federal Republic of Nigeria and indeed, the Federal Government of Nigeria, on this great milestone. I have no doubt that if implemented to the letter, this policy of privatization will bail the Nigerian nation out of its economic challenges, faster than we ever imagine.
14. I thank you for listening. God bless you all.