PRIVATISATION IN NIGERIA: GUIDELINES FOR THE FOREIGN INVESTOR OUTLINE 1) 2) 3) 4) 5) BACKGROUND THE FOREIGN INVESTOR: WHO IS HE?

OBJECTIVES OF PRIVATISATION IN NIGERIA LEGAL REGIME FOR PRIVATISATION VIS-A-VIS THE FOREIGN INVESTOR PRIVATISATION INSTITUTIONS IN NIGERIA 5.1 5.2 5.3 5.4 6) 7) 8) 9) 10) National Council on Privatisation Bureau of Public Enterprises The Stock Exchange Privatisation Advisers

WHICH ENTITIES ARE TO BE PRIVATISED? PROCEDURES FOR THE DIVESTMENT OF GOVERNMENT INTERESTS TIMING OF IMPLEMENTATION WHAT THE FOREIGN INVESTOR SHOULD WATCH OUT FOR:OTHER MATTERS 10.i 10.ii 10.iii Competition and Regulatory Policy Avoidance of Conflicts of Interest Transparency of Transactions

11)

CONCLUSION

PRIVATISATION IN NIGERIA: GUIDLINES FOR THE FOREIGN INVESTOR

1.

BACKGROUND There is no doubt that the twin principles of liberalisation and globalistion have now come to be the new catechism of international political economy, reinforced by several treaties and protocols which nations have adopted, in order not to be isolated in the international scheme of things. Concepts such as foreign direct investment (FDI) and mega cross-border mergers and acquisitions are now the acceptable barometers by which the attractiveness and progress of nations financial systems are measured. This latter is indubitably the case going by the undertones accompanying the release of the World Investment Report recently by the United Nations Conference on Trade and Development (UNCTAD), particularly on the segment dealing with foreign direct investment, mergers and acquisitions. All these underscore that while national boundaries may exist in the physical and geographical realm in financial terms, the world has been perceived increasingly as a global hamlet where goods and services must be allowed to move freely and fully across domestic boundaries, and all manners of trade restrictions and inhibitive tariffs abolished. A phenomenon which has been a necessary concomitant to the principle of liberalisation is privatisation, which involves the transfer of control in terms of ownership and management from the government to private investors. This phenomenon has gained worldwide support and frenzy. Following the privatisation of British Telecom in 1984 under the Telecommunications Act, and the host of the other privatisations that took place in Britain thereafter, several nations particularly those in Africa, have come to embrace the principle as a way of eliminating low performance and inefficiency in the public enterprises sector. And this belief has largely been vindicated1. Following the trend, the government of Nigeria has come to embrace privatisation as a cardinal principle of the states economic policy. As it is commonly known, successive governments in Nigeria have encouraged the development of public enterprises. Since independence in 1960 and particularly in the 1970s - the oil boom years - Nigeria developed a large public sector incorporating activities such as banking and insurance, oil

For example, Tanzania Breweries changed from the most inefficient and loss-making company before privatisation to the most profitable business in Tanzania after privatisation.

prospecting, exploration, refining and marketing, cement, paper and steel mills, fertilizer plants and so on. Nigeria has more than 1,800 public enterprises at federal and state levels which can be categorised as follows:public utilities providing infrastructural services; strategic industries such as petroleum and petrochemical, fertilizer plants, iron and steel; economic/commercial enterprises such as manufacturing of consumer goods, insurance, banks and hotels; and departmental/statutory boards designed to serve specific social or development roles such as universities and research institutes. These entities progressively suffered from recession. In consequence, the government set up several study groups to look at their operations. Without exception, they were found to be infested with problems such as confused and conflicting missions; political interference in operation decisions, misuse of monopoly powers; defective capital structures, bureaucratic red-tape; mismanagement, nepotism and corruption. It was against this background that in 1988 the Federal Military Government embarked on a major reform of its public enterprises under a programme of privatisation and commercialisation. A July 1988 Decree specified a total of 110 enterprises to be privatised and another 35 to be wholly or partially commercialised. Pursuant to that Decree, a total of 36 public enterprises were privatised through public offer in the privatisation exercise that took place then. And I must hasten to add that it was then that the four biggest banks in Nigeria which were formerly under government control and ownership were privatised (our firm was the adviser in the privatisation of one of them). In recent times, the government of Nigeria has stated its intention to continue with the stalled privatisation programme. To demonstrate its seriousness, the immediate past military regime promulgated a new law, the Privatisation and Commercialisation Decree No. 28. This has been adopted by the current civilian government. Governments decision to sell off its equity holding in these enterprises is by no means unworthy of sympathy. Government has no resources to subsidise inefficient and loss making parastatals. As a result, privatisation has become more of a necessity than a mere investment decision. In pursuing this objective, government has instituted procedures that are transparent to ensure maximum return in the disposal of its assets.

In this paper, we do not intend to examine the whole gamut of privatisation in Nigeria. Such an exercise cannot possibly come within the ambit of a single paper. Our mission is to provide a sort of guideline for the foreign investor, at least from a practitioners point of view. Given the degree of importance which is attached to foreign capital and to the role of core/strategic investors in the current privatisation programme, most of whom are international investment conglomerates and therefore necessarily alien it would not be difficult to concede that such a guideline is indeed necessary. He would like to know the legal regime that governs privatisation in Nigeria, vis-a-vis alien participation in business, he would like to know the institutions to deal with; specifically what enterprises have been put down for privatisation and so on. These are some of the information we intend to provide. 2. THE FOREIGN INVESTOR: WHO IS HE? Given the magnitude of the investment level in the companies earmarked for privatisation, the desire of the government to attract enduring foreign investment into the economy, the lack of absorptive capacity of the Nigerian capital market, our low technological level, among other reasons, government has decided to utilize foreign investors as an integral part of the privatisation process. The foreign investor needed in this respect, particularly, is a core or strategic investor. Core investors or strategic investors can be described as formidable and experienced groups with the capabilities for adding value to an enterprise and making it operate profitably in the face of international competition. They should possess the capabilities of turning around the fortune of such an enterprise, if by the time of their investment, the enterprise is unhealthy. The major characteristics that distinguish strategic/core group investors are: They must possess the technical know-how in relation to the activities of the enterprises they wish to invest in. For example, a Core investor into a cement company must have access to cement production expertise with regard to optimal use of the machinery, maintenance of such machinery and other technical aspects of cement production such as procurement of raw materials, etc. The Core investors must also possess the financial muscle, not only to pay competitive price for the enterprise they wish to buy into but also to turn around its fortune, using their own resources without relying on the government for

funds. Each Core/strategic investor is expected to prepare a short/medium/long term plan for the future development of the enterprise and indicate how it will be financed. The Core investor must have the management know-how to man a business profitably in a competitive environment where market forces dictate the business environment.

These characteristics of foreign investors would apply particularly to the partial privatisation of those enterprises where the government wishes to transfer 40% of its equity holding to the foreign investors, 20% to Nigerian citizens, while retaining the remaining 40%. For the enterprises which are to be fully privatised, it does appear that foreign investors need not hold the criteria mentioned above. This is because the reference to Core/Strategic investors have only been made with respect to those enterprises to be only partially privatised, in all the guidelines and publications so far released by the Bureau of Public Enterprises, and by the National Council on Privatisation. In view of this, our view is that foreign investors can freely participate in the privatisation of the eleven enterprises to be conducted before December 13st, 1999, without the necessity of fulfilling the conditions enumerated above. Procedures for identifying Strategic/Core Investors: The starting point in the identification of strategic/core investors is the placement of advertisements in Local and International Journals and Magazines inviting strategic investors to submit their expressions of interest to invest in the specified public enterprises. This was done in October, 1998. Some 48 local and foreign investors applied to be considered. They were given preliminary information memorandum on the enterprises in which they expressed an interest to invest and requested to undertake due diligence studies on the subject enterprise and submit economic bids to the BPE by the end of December, 1998. To date some 18 prospective core investors have submitted their bids. The use of Privatisation Advisers as the leading light in the identification and assessment of core investors is justified by the fact that such advisers know fairly intimately who are the major actors in the different industries and almost invariably they would have dealt with them elsewhere in the world. The BPE Board supported by the Advisers will prequalify and later interview those adjudged suitable for further negotiations culminating in recommendations to be made to the Federal Government for ultimate appointment as the

strategic/core investor to acquire up to 40% of the equity capital of the affected enterprise. Management and Shareholders Agreements will be signed to protect the enterprise from undue interference in routine business decisions by government post privatisation. 3. OBJECTIVES OF PRIVATISATION IN NIGERIA Generally, privatisations are driven by the desire to increase competitiveness and efficiency and the belief that the powers of the market place can achieve this better than state control. However, given the antecedents of governments participation in goods and services production in Nigeria, and the long history of crisis bedeviling these public enterprises, privatisation exercise in Nigeria is expected to achieve the following objectives:1. Inject market discipline at Board level since the Board is expected to reflect the shareholding interests of private sector investors who are interested in the maximisation of profits. Result in closer monitoring of the performance of managements. Greater accountability and evolution of better management practices. Act as a catalyst for the revitalisation of the capital markets by making available in the capital market substantial volume of shares. Fund raising avenue for the governments from the divestment exercise. Encourage share ownership by members of the public leading to a more efficient mobilisation of savings within the economy. Attraction of foreign capital to the country. Deepening the domestic market. Skills and technology transfer to Nigeria. Productivity and earnings improvement, growth, profitability, efficiency and employment opportunities.

2. 3. 4. 5. 6. 7. 8. 9. 10.

A careful understanding of these objectives would aid the foreign investor who desires to benefit from Nigerias privatisation programme. For government does not just want an investor who wants to come and make quick profit and go. An investor who understands and sympathises with the objectives would advisedly accommodate them in the expression of interest which he would advance to the government agency coordinating
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the privatisation programme. At the stage of preparing the long term and medium term development plans of the entities which the investor is also expected to submit to the government during negotiations, his cause would also be better served should those plans take into account the policy objectives. As must be noted, privatisation in Nigeria is both an economic and political exercise but more the latter. As such, only that bid which accommodates the policy objectives of the government would be favourably considered. 4. LEGAL REGIME FOR PRIVATISATION VIS-A-VIS THE FOREIGN

INVESTOR The legal basis for privatisation in Nigeria is found in the Privatisation and Commercialisation Decree No. 28 of 1999, promulgated by the last military regime of General Abdulsalami Abubakar (rtd). The Decree has been adopted by the present civilian government. In the main, the legislation provides for the further privatisation and commercialisation of Federal Government wholly and partially owned enterprises to facilitate the liberalisation of the economy, and to enable the private sector compete with the public sector in all aspects of the economy. It establishes the National Council on Privatisation with responsibilities for the determination of the political, economic and social objectives of privatisation and commercialisation of public enterprises. It further establishes a restructured Bureau of Public Enterprises with responsibilities for the implementation of the actual privatisation programme. Privatisation is also governed by the regulations to be made from time to time by the national Council on privatisation pursuant to its powers under Section 31 of the Act. Given that most of the foreign investors are aliens as understood by Nigerian law, and also considering the possibility of some of the shares held by the government being divested in the international capital market to interested investors, those laws in Nigeria which govern alien participation in business in Nigeria should also be considered by the foreign investor who wishes to participate in the privatisation programme as those laws would necessarily impact on them. The major relevant statutes are as follows:1. 2. 3. Companies and Allied Matters Decree 1990. Nigerian Investment Promotion Commission Decree No. 16 of 1995 (as amended). Foreign Exchange (Monitoring and Miscellaneous Provisions) Decree No. 17 of 1995.

4. 5. 6. 7.

Investment and Securities Decree No. 45 of 1999. Immigration Act (Cap. 171 LFN 1990). National Office of Technology Acquisition and Promotion Act (Cap. 268 - LFN 1990). Industrial Inspectorate Act (Cap. 180 - LFN 1990).

From the perspective of a foreign investor, it is the Privatisation Act and its subsidiary legislations, coupled with all these laws listed above that constitute the legal regime for Nigerias privatisation programme. A wrong appreciation of the laws might result in unpleasant consequences for him. However, from the perspective of the foreign investor, it would be apposite to state that presently, the legal regime in Nigeria guarantees unconditional repatriation of his funds both in terms of earnings and capital. 5. PRIVATISATION INSTITUTIONS IN NIGERIA Several entities have been created to form an institutional framework for the successful implementation of the privatisation programme. And they are the institutions which the foreign investor must deal with. They exist as follows:(a) National Council on Privatisation This body is established under S.9 of the Privatisation and Commercialisation Act. It consists of: the Vice-President as Chairman; the Minister of Finance as Vice Chairman; the Attorney-General and Minister of Justice; the Ministers of Industry and National Planning; the Central Bank Governor, the Secretary to the Government of the Federation, the Special Adviser to the Head of State, Commander-in-Chief of the Armed Forces on economic affairs, and four other members appointed by him, and the Director General of the Bureau of Public Enterprises. The Councils powers and functions include:1. 2. 3. Approving policies on privatisation and commercialisation, the entities to be privatised or commercialised and the time frames involved; Approving guidelines and criteria for valuation of public enterprises and the choice of strategic investors; Approving the legal and regulatory framework for the enterprises to be privatised;
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4. 5.

Approving the appointment of advisers and consultants as well as the budgets of the council and bureau; and Receiving regular reports from the bureau on programme implementation; The level of representation in the council shows more than any other thing the governments seriousness with the privatisation programme. However, it is remarkable that there is no labour representation in the council. This lapse it is feared may engender industrial disharmony in future, since labour needs to be carried along from the very beginning. From the point of view of investment security which can only exist in an atmosphere of industrial peace and stability2. This lapse can be cured by the President appointing the majority of the four additional people he has power to appoint into the council from labour.

(b)

Bureau of Public Enterprises The next privatisation institution is the Bureau of Public Enterprises established under S.12 of the Decree. Its functions with respect to privatisation are to:1. implement the councils policy on privatisation; 2. 3. 4. prepare public enterprises approved by the council for privatisation; advise the council on further public enterprises that may be privatised; advise the council on the capital restructuring needs of the public enterprises to be privatised; carry out all activities required for the successful issue of shares and sale of assets of the public enterprises to be privatised; make recommendations to the council on the appointment of consultants, advisers, investment bankers, issuing houses, stock brokers, solicitors, trustees, accountants and other professionals required for the purposes of privatisation;

5.

6.

As much in the interest of government as in that of the foreign investor.

7.

advise the council on the allotment pattern for the sale of the shares of the public enterprises set out for privatisation; oversee the actual sale of shares of the public enterprises to be privatised by the issuing houses, in accordance with the guidelines approved, from time to time, by the council; ensure the success of the privatisation exercise taking into account the need for balance and meaningful participation by Nigerians and foreigners in accordance with the relevant laws of Nigeria; and perform such functions with respect to privatisation as the council may, from time to time, assign to it.

8.

9.

10.

(c)

The Stock Exchanges Given that one of the modes for privatising governments shares in the public enterprises is an offer for the sale of the shares by public issue to be made at the capital market, and also following the latest Presidential order to the VicePresident to initiate action to enable the sale of shares of public enterprises listed for full privatisation at the Lagos State Stock Exchange, it follows therefore that another institution the foreign investor would necessarily have dealings with is the Stock Exchanges. For Nigeria, there are presently two stock exchanges (Lagos and Abuja) with branches in different cities of the country. The recent introduction of the central securities clearing system, and the commissioning of the automated trading system would certainly make the jobs of the Stock Exchanges easier in the current privatisation programme. To further consolidate the gains made so far, the introduction of National Securities Depository and the system of scripless trading as suggested by Corporate Attorneys Abdulai, Taiwo & Co are also being seriously considered.

(d)

Privatisation Advisers The privatisation advisers form another institution which the foreign investor would inevitably have dealings with. The privatisation advisers are the financial and technical advisers to be appointed under the Decree by the government to undertake diagnostic studies of all enterprises slated for privatisation based on terms of reference which oblige them to:-

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*Assess the value of the affected enterprise. *Evaluate strategic privatisation options for each affected enterprise. *Identify more serious strategic investors, if those who had already expressed their interest to invest are considered inadequate for the purpose and assist BPE in evaluating bids and negotiating with the identified strategic investors. Considering the nature of the functions of these world class consultants which oblige them to identify more serious investors ... evaluating bids and negotiating with the identified strategic investors, it is obvious that there is no way the interested foreign investor would avoid having dealings with the privatisation adviser at one point or the other of his participation in the privatisation exercise. Already, recommendations have been made to the Government for the privatisation adviser to be appointed for each of the entities to be privatised. 6. WHICH ENTITIES ARE TO BE PRIVATISED? Under the Privatisation Decree, two categories of entities are to be privatised - those to be partially privatised, and those to be fully privatised. For the partial privatisation, we have thirty seven companies (37) while twenty five (25) are to be fully privatised, bringing everything to sixty two (62) entities to be privatised. A breakdown of the companies to be partially privatised shows that two (2) are in the telecommunications sector, one (1) in the electricity sector, seven (7) in the petroleum/oil sector3, two (2) fertilizer companies, one (1) machine tools manufacturing company, one (1) gas company, six (6) companies in the steel and aluminum sector, four (4) companies in the mining and solid mineral sector, two (2) media companies, two (2) insurance companies, three transport and aviation companies, three (3) paper companies, and three (3) sugar companies, bringing the total to thirty seven (37). Entities to be Fully Privatised For the Companies in which the Government intends to divest of the totality of its equity holding, we have three (3) petroleum marketing companies, six (6) cement companies, five (5) Commercial and Merchant banks, three (3) agro-allied companies, six (6) motor vehicles and truck assembly companies, and two (2) hotels.
3

Port Harcourt refinery is made up of two companies.

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As to be gleaned above, these companies to be privatised, whether fully or partially, are among the most juicy companies that can be found anywhere, and indeed represent the most profitable companies, at least potentially, in the Nigerian economy. That the government has slated them down for privatisation demonstrates, more than anything else, the governments belief and commitment in privatisation as a vehicle for true economic liberalization, and as such, an assurance to foreign investors. 7. PROCEDURES FOR THE DIVESTMENT OF GOVERNMENT INTERESTS: Section 2 of the Privatisation Decree contains provisions on the mode privatisation would take in Nigeria. Under this section, an offer for the sale of the shares of a public enterprise shall be by public issue or private placement, as the case may be. An offer for the sale of shares by public issue to Nigerians may be made at the capital market. Where the shares of an enterprise are not to be offered for sale by public issue of share or private placement, the Council may approve that the shares be offered for sale through a willing seller and willing buyer basis or through any other means. To understand these provisions better, it would be useful to distinguish between entities to be partially privatised, and entities to be fully privatised. And for the former, to further distinguish between the 40% equity to be transferred to Core/Strategic investors, and the 20% to be sold to Nigerian Citizens. For the entities to be partially privatised, with respect to the 40% equity to be transferred to Core/Strategic investors, it would appear that the only procedure which it can take would be through a willing seller and willing buyer basis as contemplated by the Decree. This view accords with the elaborate procedures highlighted under head 2 of this discourse where the government (the willing seller) through its agencies, the BPE and the Privatisation Advisers, would enter into direct negotiations with Core/Strategic investors (the willing buyer) to determine the appropriate prices of the enterprises that would be sold to the investors. For the 20% equities to be sold to Nigerians, it can be made either by public issue or private placement. However, considering the desire of the government that the process should be transparent, and reach as many Nigerians as possible, it is more likely the sale would be by public issue. Hence, the provision that an offer for the sale of shares by public issue to Nigerians may be made at the capital market.

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However, to enjoy maximum efficiency in the disposal process, and take full advantage of the stock exchange facilities, those public enterprises not yet quoted in the stock exchange would have to be listed before the disposal would start. With respect to the enterprises to be fully privatised, the sale would take place through public offer at the capital market. By the July 1999 presidential order, this sale would start with the full privatisation of 11 public enterprises to be conducted before the end of December, 1999. That sale would be conducted at the Lagos Stock Exchange. Both Nigerians and foreign investors can participate in this process as no distinction is made as to who is eligible to buy the shares. This contrasts with the 20% equity expressly reserved for Nigerians in the enterprises to be only partially privatised. A related issue here which should be of utmost concern to the foreign investor is the issue of golden shares (i.e. shares carrying special rights) particularly with respect to the 40% to be retained by the government. Would the equities enjoy the status of golden equities to give the government overwhelming control in the enterprises? Our view is that the equities to be retained by the government would not enjoy such sacred status. This view is based on the following reasons. The first is that the concept of golden shares negates the very essence of liberalisation, and government has in different fora sounded its resolve to liberalise the economy for in all time, and has enacted laws to demonstrate this. We do not think that it would be right to suppose that having gone this far, government would introduce anything such as the golden shares concept to negate what it has committed so much to do. Secondly, in the Press briefing made on the 19th day of February, 1999, by the BPE, it was stated clearly by the agency that to protect the enterprises from undue interference in routine business decisions by ministry officials post Privatisation, Management and Shareholders Agreements will be signed. Thirdly, government is desirous of attracting foreign investors into the country, and would therefore not do anything that would scare them away.

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Lastly, the battle for and against golden shares phenomenon has been fought in the Nigerian Privatisation experience, and appears to have been resolved against it. For those familiar with the history of privatisation in Nigeria, it would be recalled that when government privatised the 4 big banks in Nigeria in 1988, it sought to confer golden status on the shares still held by it, but this move was abandoned following its resistance by both local and foreign investors. 8. TIMING OF IMPLEMENTATION: From the beginning it must be understood that the first phase of privatisation in Nigeria was that done between 1986 and 1993. The current privatisation programme is only the second phase and it is divided into 3 stages with respect to timing of implementation. Stage I This stage is expected to be completed by December`1999. This stage involves the full privatisation of enterprises in three sectoral groups (commercial and merchant banks, cement plants and petroleum marketing companies) which already have their shares listed on the Lagos Stock Exchange. Here government wishes to divest the balance of its equity holdings ranging from 10 to 40 percent. Stage II This stage is expected to start by January, 2000. It involves the full privatisation of hotels and vehicle assembly plants in which government has equity holdings of between 35% and 100%. Stage III This is the final stage. This involves the partial privatisation of enterprises in which the government currently has 100% equity. This includes public utilities, refineries, fertilizer plants and the Nigerian Airways. It is here that Core/Strategic investors would feature prominently. Remarkably, the 40% equity to be transferred to Core/Strategic investors would first be done following the procedure already described in this paper. The 20% to be sold to Nigerian Citizens would only be done after the Core/Strategic investors have been given adequate time to settle down and add value to the enterprises. This is expected to take 2-3 years.

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It must be emphasized that the phasing arrangement is very flexible. For instance, although Nigeria Airways was earlier slated for the 3rd stage, the International Finance Corporation (IFC) has already been mandated to commence work on its immediate privatisation. To this end, Bernard Verr, Secretary of the BPE, has stated that government will bring forward any enterprise that in its opinion has become ripe for privatisation. 9. WHAT THE FOREIGN INVESTOR SHOULD WATCH OUT FOR: Every country has its peculiarities, both in terms of its laws, economic and social conditions, and in the behaviour of its citizenry. Any alien wishing to make an entry into the country, either as an investor or a tourist, should watch out for those things so as to avoid unpleasant consequences. For Nigeria, the foreign investor should take particular note of the activities of fraudsters. It is true that the government of Nigeria over the years has instituted procedures and laws aimed at checkmating and wiping out syndicated frauds. This the government has largely succeeded in doing. Yet, it would be idle to suppose that such people no longer exist or function. They do, even though the scale has been reduced. For this reason, the foreign investor is advised to deal only with long established firms whose honesty they can guarantee. Having been in operation for decades, and indeed advised on the past privatisation exercises in the country, these firms know their ways around, and can be trusted. Related to the above, the foreign investor should also take note of the laws that govern alien participation in the country, vis-a-vis privatization. These laws have been listed above, but further advice can be sought on them. It would be a bit foolhardy, in our view, for the foreign investor to come in without prior close acquaintance with the legal environment of the activity they wish to involve in. 10) OTHER MATTERS Other things that might be of interest to the foreign investor are:10.i Competition and Regulatory Policy: Creating competition is privatizations raison detre. The current position in Nigeria recognises this. To this end, it should be good comfort to the foreign investor to note that all anti-competition laws in power, telecommunications and related sectors have been abrogated. In doing this, government recognises that

15

deregulation and competition are the only vehicles which would make privatization achieve its main objective of liberalizing the economy, otherwise we end up substituting private monopoly with public monopoly. To consolidate this, regulatory institutions are being strengthened with expanded scopes where they exist and new ones being set up from the scratch where they do not. In all the above exercise, the support of multilateral agencies as well as independent, experienced consultants is continually being sought by the government. 10.ii Avoidance of Conflicts of Interest: To avoid possible conflicts of interest, the government has stated that the National Council on Privatisation will not use the same firms to advise about regulation and also to represent government when it disposes of the enterprises. Where an investment banker is hired to advise the Council, care will be taken to ensure that it represents only the interest of Nigeria. Therefore, in transactions with the government or the Council, the foreign investor is always advised to come with his own independent adviser. 10.iii Transparency of Transactions: Since quality investors will not bid in an atmosphere that lacks transparency, and also given the potentiality of lack of transparency destroying the value of the exercise, and possibly fan domestic political resentment, government has pledged to ensure that everyone, including foreign investors should be able to find out what happened to whom in negotiations with the government agencies. To this end, regular press briefings have been organised, and will continue to be organised, in Nigeria and overseas, to intimate members of the investing public of the ongoings. 11) CONCLUSION: While the economic benefits of privatisation have been widely accepted, and include the inflow of foreign investment, foreign investors cannot come in when they are not fully aware of the ongoings on the ground, and when all they know is limited to information they can source form the media. It is in recognition of this that we have taken pains to structure this paper, believing that it would be useful to the foreign investor.

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While we acknowledge that this work may not provide a definitive data on all there is to Nigerias privatisation programme (since events are still unfolding), we do hope that it would provide a near comprehensive first information to the foreign investor who is coming in contact with Nigerias privatisation for the first time, and may not have conducted an in-depth study of the system before hand. It is not academic, but rather a reflection of our firms appreciation of the practical issues on the ground.

NNAMDI L. DIMGBA LL.B (Hons) Nig. B.L CHRIS OGUNBANJO & CO (SOLICITORS) 3, HOSPITAL ROAD LAGOS

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