NATIONALISATION

A speech given in the House of Representatives, Lagos, on 21st November, 1960.

Mr. Speaker, Sir, when the Honourable Minister of Finance moved the Second Reading of the Supplementary Appropriation Bill, he raised two very controversial issues: one on nationalisation and the other on Nigerianisation. Each of these two subjects appears to me to be extremely topical and of momentous importance.

In the time at my disposal, however, I can and will only deal and even at that, sketchily  with nationalisation. It is common ground that Nigeria is an under-developed country; that at the moment, there is a lack of capital and of technical know-how, in the country; that these factors must for the present and for some time to come be imported from outside Nigeria in the form of foreign investment; that in order to attract this foreign investment the requisite climate must be provided for the admission of such investment into our country; and that in pursuance of this object of attracting foreign capital and technical and managerial know-how, the Government of this country, that is the Federal Government, supported by all the other Governments of the Federation, has made provisions for aid to pioneer industries and also for granting new enterprises tax-free holidays when they are established in this Country. Under this law, that is the law relating to Aid to Pioneer Industries and tax-free holidays, it is possible for the new company in this country which is declared a pioneer industry – to have five years profit without paying any tax whatsoever. It is also possible for such industries to write down their capital heavily during the five years so that at the close of five years, the industries concerned will have practically nothing left by way of capital investment in the country. We also are agreed, and I think this is also common ground, that in order to attract foreign capital, we must provide a stable government. This is essential. Somehow in this country today, we have unusual luck; the unusual luck of having a Federal Government which is stable because it is static. When all is said and done, Mr. Speaker, the fact remains that political independence and economic dependence or subjection do not mix. Surely, it is not our wish that this country should remain under-developed and spoon-fed economically forever. Our national ambition is that in due course, the majority of the key posts, top posts in all industries and commercial houses, should be manned by Nigerian technicians and managerial experts. In other words, what applies to Nigerianisation of our Public Service also applies to Nigerianisation of industrial and commercial enterprises. It is not intended, and I do not think the Federal Government ever intends it unless it states to the contrary, that the present investors and their heirs and assignees should for ever continue to exploit our country as at present for their own origin. It is incorrect to say that my attitude on this subject has changed within the past few months. It has not.

In this connection I would ask your permission, Mr. Speaker, to quote one or two passages from the previous statements made by me in the statement of economic policy which I made in an address delivered by me to the Central and Regional executive committees of the Action Group on the 27th of May, 1954.

“We will welcome foreign capital so long as it enters, I am now quoting – ‘into partnership with indigenous capital provided either by the Production Boards, the Government or the people wherever possible and advisable. We will seek to control the whole capital ourselves and make use of the skilled labour and organisation which foreigners alone can at present provide. In the future, we will seek to nationalise such of the existing industries controlled in the country by foreigners as we deem expedient in the national interests (applause); but such nationalisation will be accompanied by adequate compensation. In short, our aim for the present is to arrest the tendency of our industrial activities being concentrated in the hands of foreigners and in the long run to ensure that all major industrial activities are either vested in the state or in our fellow countrymen as is now the case in Europe and America.”

In another address which I delivered to the Lagos Chamber of Commerce on the 2nd of February, 1955, I quote, Mr. Chairman, I said ‘Political independence and economic spoon-feeding do not go well together’. In other words, political self-determination, if it is to be worthwhile, real and not illusory, must go hand in hand with its twin brother, economic self-determination.

Now the attitude which these quotations demonstrate is supported very strongly by the passage which was quoted from the statement on ‘Opportunity for Investment’ made by all the Governments of the Federation and quoted by the Honourable Minister of Finance in the curse of his speech. I repeat what he quoted the other day. ‘Our Governments have no plans for nationalising industry beyond the extent to which public utilities are already nationalised. Nor do they foresee any such proposals arising.’ It goes further and what comes next is due, I say with respect and all sincerity, to the effort of the Western Regional Government at that time. ‘Nevertheless,’ that is in spite of these first statements, ‘they are anxious,’- all the Governments of the Federation, including the Federal Government, including the Honourable Minister of Finance who was then Minister of something I don’t remember (applause) –  ‘nevertheless, they are anxious – that there should be no doubt in the minds of overseas entrepreneurs that Nigeria will provide adequate safeguards for the interest of investors in the event of any industry being nationalised in the future. Should this occur, then fair compensation, assessed by independent arbitration would be paid.’ In other words, the Governments of the Federation did not rule out nationalization in the future as a matter of national policy and that is the stand which I have taken.

When the Honourable Minister of Finance spoke here the other day he said that there was a difference between fair compensation and what I would describe as market value of the assets of the foreign investors. I think the Honourable Minister of Finance would have to consult his experts again to find out whether there is any difference between market value and fair compensation.

It is written that market value or fair compensation amount to the same thing. If a capital was invested here ten years ago, £1 at that time may be worth £2, £4 or £5 today. That is the market value today and that will be the fair compensation to the investor. On the other hand, the business might have been so mis-managed that the £ I of ten years is not worth more than ten shillings now; that is what will be paid to that particular investor; that of course would be the fair compensation.

Now this policy of not ruling out nationalisation in our national economy is not peculiar to Nigeria. There is a publication of the United Nations Organisation entitled ‘Foreign Investors Law and Regulations of the countries of Asia and the South.’ I commend the study of this publication to the Ministry of Finance because there it will be found that the countries of India, Burma, Siam and Indonesia and so on and so forth all believe that nationalisation is part and parcel of their national economy. As a matter of fact India has already nationalised insurance, and shipping is a State monopoly in India. In spite of the fact that insurance has been nationalised by India and that shipping is a State monopoly, investors still flock into that country. Ceylon. The Ceylonese Government made a law whereby no foreigner would run a hotel in that country. Ceylon also made a law whereby the state would monopolise the importation of sugar and rice because these two commodities bring a lot of profit to the country.

Similarly Ceylon also passed a law whereby only nationals of Ceylon can export tea from that country to any other country with the result that all the tea plantations in Ceylon which were previously owned by investors are today owned by Ceylonese.

They have cocoa, they have copra. The climate of Ceylon is the same as the climate of Nigeria. In spite of this policy of the Ceylonese Government, foreign investors still flock to the place. May we

remind ourselves that investors, foreign investors, do not come to this country for the love of Nigeria, they come to this country for the love of themselves and in furtherance of their profit motive.

Furthermore, it must be clearly recognised, it must be borne in mind, that all the so-called civilised countries in the Western Democracies have now recognised that under-developed countries must of necessity be given aid by them. If they fail in these days of ideological conflict between the Western Democracies and the Eastern Democracies, or the Eastern Bloc, then they will lose whatever foothold they may have had in this place in the past. And consequently the country had nothing to fear at all by discussing nationalisation and by saying or declaring that nationalisation cannot be ruled out of our national economy. It is difficult to understand the reason for the present hue and cry. In the Government publication ‘Economic Survey of 1959’, it is clearly stated that nationalisation will not be ruled out in the future. That was what was quoted by the Minister of Finance himself.

Why are these foreign investors raising the hue and cry now? The reason, in my view, Mr. Speaker, Sir, is that the foreign investors, now that they have discovered that we are politically independent, want to brow-beat us to surrendering to their economic stranglehold. They want to remain here in perpetuity and that is what this country will resist to the best of its ability. Public ownership, which is also called nationalization, is not anything strange to this country. The coal mines at Enugu are publicly owned; the railways, the ECN, the Nkalagu Cement Factory is 90 per cent publicly owned, and so are the Kaduna Textiles.

The other day when the Minister of Finance spoke, he tried to make it appear that only public utilities, would be nationalised, but coal mines are not public utilities and the Nkalagu Cement Factory and the Kaduna Textiles are not by any means public utilities, so that we already have it in our national policy that nationalisation or public ownership of industries would not be ruled out in the future, which is all we say.

It is obvious from the utterances of Government spokesmen that the Government is mortally afraid of the growth and spread of Communism or Communist doctrine in this country, but you do not keep the bugbear of Communism out of your door by branding your critics Communists, by embarking on witch-hunting, or bullying the hungry masses. Communism is a philosophy which grows automatically on the soil of much poverty and much discontent, to use the pregnant words of Bacon. At the moment our country suffers terribly from the malady of abject poverty and disease and rampant discontent.

Unemployment – the community of the unemployed people is growing fast, Mr. Speaker, Sir. The peasantry of this country are wallowing in abject poverty, ignorance and disease. 95 per cent of the foreign trade of this country is in the hands of foreigners. Our finances are in a very low state in spite of the recent windfall from the West African Currency Board, and the country continues to be run on a deficit because the-balance of payments continues to run adversely against us. The urgent task, Mr. Speaker, Sir, to which the Government must address itself, is not to go about Red-hunting, but to make a comprehensive plan for our national economy; to introduce and execute a bold programme which is designed for the welfare and happiness of all our people. In pursuance of this, I repeat my previous suggestion, Mr. Speaker. It is imperative and urgent that a planning commission, consisting of Nigerian economists, should be set up. To bring an Indian into this country to advise – I do not know whom – is a waste of time and money. What is essential is the setting up of a commission, a planning commission consisting of Nigerian economic experts. Furthermore, it is also imperative and urgent that the Government should give serious consideration to the suggestion which I made here before, that Shipping, the Airways and Insurance should be nationalised without delay. The nationalisation of these three businesses will help to allay the discontent of the people and in addition will help considerably to improve the Exchequer of the Government of the Federation.

CONTINUES NEXT WEEK

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