ABUJA -- Nigeria's new president Thursday inaugurated the body due to run his government's Privatization program, setting out three stages for the sale of some of Nigeria's 1,000 state-run businesses. The National Council on Privatization, headed by Vice President Atiku Abubakar, will oversee the phase-one sale of small companies already quoted on the stock exchange, the Phase-Two sale of a range of larger businesses, and the Phase-Three sale of key utilities and major conglomerates, he said.

The only firm date set is for the completion of Phase One before the end of December, Obasanjo said. Between then and now, the government will divest its remaining shares in 11 petroleum marketing groups, commercial and merchant banks and cement plants, Obasanjo said. In the second phase of the program, the company will sell off its interests in key state-owned hotels, such as the Federal Palace Hotel in Lagos, and several motor and vehicle assembly plants joint ventures, he added.

Phase Three will involve the sale of the state-run National Electric Power Authority (NEPA), the Nigerian Telecommunications (NiTel), state air carrier Nigeria Airways, and the state-run petroleum refineries, Obasanjo said. The setting up of the Privatization Council and setting out of the government's program was, said the president, "a demonstration of our commitment to institutional (economic) reforms.". State-management of Nigerian enterprises had failed, he charged.

"It is estimated that successive Nigerian governments have invested up to 800 billion naira (8.5 billion dollars) in publicly-owned enterprises. Annual returns on this huge investment have been well below 10 percent," he went on. "State enterprises suffer from fundamental problems of defective capital structure, excessive bureaucratic control or intervention, inappropriate technology, gross incompetence and mismanagement, blatant corruption and crippling complacency," the president said.

"Inevitably these shortcomings take a heavy toll on the national economy." Obasanjo said that the failure of the state power company Nepa had been particularly costly. "It is conservatively estimated that the nation may have lost about 800 million U.S. dollars due to unreliable power supply by Nepa, and another 440 million U.S. dollars through inadequate and inefficient fuel supply," he said.

Privatization is in the interests of the ordinary Nigerian, he added. "We are not embarking on this exercise to please the World Bank or the IMF... rather in our determination (to pursue) the best interest of this country." Obasanjo said the council would be charged with approving "policies on Privatization and commercialistic, the valuation of the enterprises and which companies are to be privatized." International advisers would be brought in and there would be no demands for payment of non-refundable deposits as done under previous regimes for companies to work on the schemes, he added.

The government would ensure a clean and transparent privatization exercise benefiting consumers, the general public and investors, he said. (AFP)