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Managing Post-Privatisation Political and Regulatory Risks in Nigeria - a Law and Policy Perspective
Abstract
In an effort to revive the ailing economy andjoin the global markets,
successive Nigerian governments since 1986, have taken measures
that were aimedat liberalising the economy and creating a conducive
atmosphere for more private, especially foreign direct investment,
long recognised as engines of growth and development and
prosperity Among the policy initiatives were: the repeal or amendment
of certain laws and regulations that restricted foreign investment, and
privatisation of state-owned enterprises. These reform measures have
reduced the political risk perception of the country by foreign investors
as evidenced in the increased level of foreign participation in the
telecommunications, and oil and gas industries. However, with
liberalisation and privatisation, new forms of political and regulatory
risks emerge that require new management techniques. These risks
include possible changes in environmental and social regulations,
discriminatory treatment of the private/foreign investor by regulatory
agencies through licensing, taxation and enforcement of business
laws, control of essential facilities by dominant enterprises, lack of
observance of the rule of law and other good governance issues.
Both the government and private investors should give due
consideration to such risks and take appropriate measures to reduce
or minimise them so as to fully realise the benefits of a liberalised Lecturer in Law at the
. Dr Kolo is a Senior
economy. For government, reducing the risks increases its credibility
while the private investor stands to gain the most from his investment. ,onkcted by emmail at
This article examines such risks and how to reduce them.