11. The Spoils of Privatization

 

“We have spent a lot of time and work on privatization throughout Africa.”1

– Peter R. Kieran, President, CPCS Transcom

 

While the massive investments by Canadian-based mining companies go a long way to explain this country’s support for policies that give free rein to corporations, another important money making opportunity has accompanied the neoliberal war on government. And Canada has grabbed a significant share of the spoils.

As part of its “free” market push, Canada supported the World Bank/IMF’s African privatization drive. From rail lines and ports to water services to power utilities, thousands of state-owned enterprises were sold outright or concessioned (with the state retaining nominal ownership of some — or all — of the assets but the concessionaire taking control of the company). In most cases the World Bank or bilateral donor agencies financed or promoted the sales, often making their money to a government conditional on privatization.

To realize their ideological aims the World Bank and bilateral donors paid Western consultancy firms to advise African governments on the best ways to reform state companies. The consultants usually suggested transferring public assets to private hands and then provided advice on reorganizing a firm to attract suitors, ways to avoid labour unrest and how to get financial help.

The reason usually stated for pressing African governments to transfer public assets to private hands has been that state-owned enterprises were either poorly managed or drained the public treasury. There was often some truth to these claims and in some instances privatization brought short-to-medium term benefits to the government or company. But, even when state-owned enterprises generated steady income, operated efficiently or fulfilled an important function, the World Bank and IMF still sought privatization. The drive to privatize was based not on careful assessment of each company and the social and economic conditions in which they operated, but rather on the ideological belief that private corporations should determine economic affairs.

The privateers ignored the factors that motivated governments to establish businesses in the first place (or how greater community or worker participation in managing state enterprises could improve operations). State companies were often created to reverse the dependence left by colonialism, sometimes taking on social goals or endeavours that may not have interested profit-seeking businesses. Others were set up to develop internal capacities or to capture profits fleeing the country.

Criticized for enabling political patronage, state-owned companies simultaneously dampened inequality. The transfer of public assets to private hands partially explains the rise of a super-rich class of Africans. On the other hand, the dismembering of the state over the past quarter-century has done little to temper patronage or corruption. In fact, with improper oversight, privatization often has seen an entire asset — not just part of the operating budget — fall into the hands of well-connected individuals.

While insiders often benefit from selling state companies, it is the rural and urban poor who usually bear the cost. Prices for electricity, water and other services increase when subsidies are withdrawn along with public ownership. The hardest hit by the drive to privatize, however, have been public workers and their dependents. Tens, perhaps hundreds, of thousands have lost their jobs in economies with few employment opportunities.

A number of the corporations that promoted, facilitated or profited from the privatization drive had their roots in Canada. While some prominent public utilities took over or managed state owned companies, one relatively unknown Ottawa-based consulting firm led corporate Canada’s assault on Africa’s public sector.

With half its business on the continent, CPCS Transcom helped concession or privatize ports, railways and electricity companies in no less than a dozen sub-Saharan African countries. According to the Globe and Mail Report on Business, “CPCS is handling, or has completed, some of the toughest projects on the continent, including the privatization of the biggest Nigerian and Kenyan ports and an ambitious scheme to reform and privatize Nigeria’s crisis-ridden electricity system.”2

CPCS has worked in 35 African countries and the consulting firm has offices in Accra, Lagos, Abuja, Calabar, Nairobi, Kampala, Dar es Salaam and Harare.3 Since the 1990s, CPCS has participated in more than $22 billion US in public-private partnership transactions across the continent.4 To put this in perspective, the gross domestic product for 30 million Ugandans was $21.5 billion in 2013.5

A profile of the company’s long-time CEO explains: “Since 1990, Peter [Kieran] has been working with international financial institutions, as well numerous governments, to develop new approaches to structural reform and encouragement of private investment in power and other critical infrastructure. He has provided policy direction to national governments in over 25 countries on infrastructure. Peter has been responsible for leading large multi-disciplinary teams responsible for the successful private investment in railways and ports in Nigeria, Sierra Leone, Liberia, Mali, Senegal, Congo Brazzaville, Cameroon, Malawi, Zambia, Tanzania, Madagascar, Jordan and Armenia. His current major initiative is the privatization of the entire publicly owned power sector in Nigeria.”6

CPCS facilitated the privatization process in port services in a handful of African countries.7 In Nigeria alone, CPCS assisted in restructuring and/or privatizing cargo handling in more than 20 individual port terminals.8 Hired by USAID to review the continent’s biggest cargo port, CPCS proposed the sale of the facilities in Durban, but the South African government rejected the 2003 privatization paper after tens of thousands took to the streets in defence of public ownership.9

The most controversial port initiative involving CPCS took place in Kenya. Contracted by the World Bank to formulate a plan for the port of Mombasa, a team of 30 CPCS consultants developed a strategy to commercialize the Kenya Ports Authority.10 The East African reported that the Ottawa firm proposed the “complete transfer of responsibility for the port to private operators.”11 The government encountered fierce backlash after publicly endorsing CPCS’ roadmap in 2011. The Dock Workers Union spearheaded a fight that garnered widespread community support (or as one concerned pro-privatization commentator put it, “emotional vote-gathering appeal.”)12 During a trip to Mombasa in November 2014, every person I talked to about the issue, including a half dozen random individuals I met exploring the coastal city, expressed opposition to the privatization of East Africa’s largest port. Most believed foreigners or businessmen in Nairobi would benefit at the expense of the coastal community.

In a small second story office two kilometres north of the city centre two representatives of the Dock Workers Union told me that privatizing the profitable port would weaken a union that had won its 7,000 members good conditions, including medical benefits, education leave and a housing allowance. Union officials also feared it would lead to thousands of layoffs in a city with a dire need for formal employment. This, they said, would exacerbate insecurity and religious tensions in the city of 1.2 million.

Another sector affected by the privatization process that CPCS and other Canadian firms facilitated and profited from has been African state railways. At the beginning of the 1990s all 34 African railways were government-owned and operated. By 2014, half of them had been concessioned to foreign operators.13 In most cases the World Bank and G7 countries made their financial support to the rail sector and/or government conditional on private participation.

CPCS, a firm with roots as the consulting services arm of Canadian Pacific Railway, assisted in the concessioning of at least nine African railways.14 Unfortunately, this process generally led to a deterioration of already limited rail services.15 Basing their conclusion on World Bank data, the authors of Should the Zambian Government Invest in Railways? explained that “with a couple of exceptions, [rail] concessions have failed to perform as anticipated, sometimes because of unrealistic expectations, sometimes because of incompetent concessionaires selected through an inadequate concessioning process, and sometimes a combination of both.”16

In most cases, private operators laid off large numbers despite significant social costs. According to one estimate, each formally employed African railway worker supports an average of 30 others.17

Many of the newly privatized companies discontinued or starved passenger rail services, which was sometimes cheaper and usually emitted less carbon than bus travel. During a five-week trip through East Africa in 2014 I experienced firsthand the demise of passenger rail. While Lonely Planet lists a train line from Dar es Salaam to Mwanza on Lake Victoria it no longer operated and on the day I planned to travel, the thrice-weekly train from Nairobi to Mombasa was cancelled.

The most successful rail system on the continent is in South Africa. But it has invested billions of dollars into its publicly owned network. Without public investment, notes the African Development Bank, “[subsidized] road networks will make it impossible for rail to survive except to carry large-scale mineral traffic.”18 Herein lies an important consequence of rail privatization. Left to their own devices, private rail operators tend to reassert colonial patterns. There is little money to be made promoting intra-African trade or transport, so for-profit rail lines focus on delivering unprocessed resources to coastal ports. Thus, privatized rail systems act much like those built during the colonial era. According to one study, two thirds of the railways built during colonialism connected mines to a coastal harbour.19

At the end of the 1990s, CPCS oversaw the first rail privatization in a former British colony. Supported by the World Bank and USAID, the privatisation of Malawi Railways saw 40% of the workforce let go.20

In the mid-2000s, CPCS helped tender and evaluate bids to operate the Tanzania Railway Company (TRC). The concessioning was a fiasco. CPCS was accused of favouritism and the company it helped to select went on to short-change the government. Days before the final bid, CPCS excluded South Africa’s Comazar, leaving only India’s RITES to explain their submission to Tanzania’s Presidential Parastatal Sector Reform Commission.21 Comazar was outraged that despite its thousand page technical bid, Tanzanian authorities only viewed a CPCS prepared evaluation note. The South African firm suggested that CPCS’ previous partnership with RITES influenced this work. Comazar asked the World Bank (which had put up most of the money for the sale) to investigate CPCS’ ties to RITES. Simultaneously it filed suit in a Tanzanian court “which granted it a suspension of the opening of the financial bids.”22

After taking over the public railway, RITES failed to pay Tanzania the $6 million it owed. In response the government cancelled the firm’s concession and TRC’s parent company refused to pay CPCS a success fee for its advisory services. (CPCS eventually won the money in court.)23

To the north, CPCS had a hand in the equally disastrous sale of the Kenyan and Ugandan railway systems. In 1998, the World Bank’s Public-Private Infrastructure Advisory Facility hired CPCS to perform an “Options Study” on the best way forward for the Kenya Railways Corporation (KRC).24 Not surprisingly, CPCS suggested concessioning. Shortly after, CPCS “assisted a private company and potential operator of Uganda Railways to prepare a Business Plan and offer to the Government of Uganda for the private operation of URC under a concession structure.”25 CPCS’ work set the stage for a joint Kenyan/Ugandan rail privatization.

The World Bank hired Montréal-based Canarail as the main transaction advisor for both the Kenyan and Ugandan railway privatizations. The World Bank allocated $77 million to prepare the two East African railway companies for sale, devoting a third of the funds to layoff and compensate KRC employees.26 All but 30 of the 8,970 employees lost their jobs.27 The private operator rehired some staff, but Rift Valley Railways Consortium refused to recognize the Kenyan Railway Workers Union. Even after an intervention from Kenya’s Ministry of Labour, they held fast to this anti-labour position.28

Rift Valley failed to fulfill their contract. Their investment in infrastructure and safety fell below agreed benchmarks as did freight and passenger volumes. Rift Valley also neglected to pay their concession fees. The Africa Infrastructure Digest called the privatization of KRC “one of the biggest corporate scandals in the country’s history” while the managing editor for business and economic affairs at the Daily Nation penned a piece headlined “Privatising Kenya Railways was an Experiment Gone Bad”.29 Jaindi Kisero complained that “an institution that used to be among the biggest employers in the country, with a powerful workers union and owning colossal assets — mainly buildings and land in Nairobi, Kisumu, Mombasa and Nakuru — has been made to shrink almost into nothingness.”30

Under significant donor pressure, Mali and Senegal privatized a shared rail network in 2003. A few years earlier, CPCS had been hired to develop a program and procure a company that would improve the services and financial stability of the Dakar to Bamako rail line.31

A few years prior to assisting the Senegalese and Malian governments in the “privatisation of the international operations on the Dakar-Bamako railway,” CPCS was hired to oversee a multi-million dollar Canadian rail project in Senegal.32 In addition to financing CPCS’ work, CIDA actively shaped the privatization plan. A CIDA report on “Canada’s Railway Program in Mali” stated that “Canada has played a major part in the policy dialogue regarding discussions between Mali and Senegal surrounding the utilisation of the section of the line that runs from Bamako to Ségou.”33 Another aid agency report, “Investments in the Rail Sector in Senegal” noted that Canada’s position of “first turning the [rail] agency around then privatizing it … ultimately prevailed” over the World Bank’s plan.34 As part of these efforts, Ottawa pumped tens of millions of dollars into Senegal’s rail sector and millions more into Mali’s system.35

A Montréal-based company won a joint long-term lease to run the Senegalese-Malian railway. Canarail together with France’s Getma acquired 51% ownership of Transrail, which oversaw the rail line. Le Monde Diplomatique explained that “a Canadian fund obtained a 25-year investment in Transrail and with the help of the World Bank, the collusion of President Wade in Senegal and the passivity of President Amadou Toumani Touré in Mali robbed both countries of a railway network that is economically vital and a source of national pride.”36 Forty percent of the workforce was immediately laid off.37 This triggered strikes and protests, which security forces were quick to repress. More than 20 striking employees were fired or suspended, including Dakar union leader, Pierre Ndoye.38

Transrail focused on freight and broke its pledge to ensure passenger services. It closed 26 of 36 stations, delivering a blow to those who peddled wares at stops or operated the station buffets as well as those who relied on the train to get from place to place.39 A number of people died after they were unable to get to hospital.40 After Transrail slashed passenger service, Le Monde Diplomatique explained that “the company’s profitability is the result of a simple equation: monopoly + modest objectives + minimum investment + ‘modern’ labour policy = a slight profit.”41

In an assessment of its rail funding to Senegal, CIDA highlighted the “Benefits for Canada” of the $40 million it disbursed. It noted that Canadian companies “were able to establish or to consolidate their presence in these markets and to develop new markets on the African continent.”42 Canada’s International Development Minister Aileen Carroll described CIDA’s role in the Dakar-Bamako rail privatization as one of its successes in 2004.43

Unfortunately this is not the only example of Canadian “aid” aiding Canadian corporations while harming Africans.

Publicly owned Canadian power utilities facilitated the demise of their African counterparts. While Manitoba Hydro and Hydro-Québec often prioritize the public interest at home, they have operated to maximize profits abroad. At a 2001 conference of African labour leaders, a Guinean electricity worker complained to France’s L’Humanité that “foreign buyers come with a ready-made policy that they impose without distinction. Even in the case of public companies such as EDF [Electricité de France] or Hydro Québec, once outside their borders they all operate according to the logic of profit alone.”44

A shift to private operators usually resulted in layoffs, higher tariffs and minimal service improvements. A 2007 Organisation for Economic Co-operation and Development (OECD) report described “dramatic failures” in the privatisation of electricity and other public utilities in sub-Saharan Africa. It noted that “profit-maximising behaviour has led privatised companies to keep investments below the necessary levels, with the result that rural communities and the urban poor were further marginalised” in electric power access.45

Electricity penetration has stagnated over the past quarter-century. Only about a quarter of Sub-Saharan Africa’s population (and fewer than 1 in 10 people living in rural areas) has access to electricity. Yet electricity can spur socioeconomic development. In “Privatisation in Sub-Saharan Africa: Where do We Stand?”, the OECD explained that “access to electricity is a major determinant of household productivity. For instance, electric light extends the day, providing additional time to study or work. Efficient and affordable energy services may also dramatically improve the health of the poor. Refrigeration allows local clinics to keep medicines on hand; modern cook stoves may save women and children from daily exposure to noxious cooking fumes. The utilities sector thus plays a crucial role in poverty alleviation policies.”46

One role of government should be to ensure that (carbon free) electricity reaches those without it. This partly explains the creation of public utilities such as Manitoba Hydro and Hydro-Québec, which aimed to mobilize public resources to extend electricity to rural areas.

Despite this role at home, Hydro-Québec International (HQI) undermined public utilities in former French colonies. In 1995, HQI in partnership with France’s EDF and SAUR acquired a 10-year leasing contract for Guinea’s Société Nationale d’Electricité (SNE). The World Bank, US and EU funded initiative broke down seven years later.47

In 2001, HQI and France’s Elyo won a five-year renewable contract to manage La Compagnie Energie Electrique du Togo. Four years later the Togolese government terminated the contract due to “noncompliance with commitments” and “multiple dysfunctions in the execution of the concession agreement.”48 Le Syndicat des Travailleurs du Secteur de l’Electricité au Togo described the privatization as a “painful experience”.49

In response to World Bank/IMF pressure, Senegal granted HQI and Elyo control over the country’s electricity provider in 1999.50 The five-year management contract included a share purchase giving the foreign companies majority control of SENELEC’s board of directors.

Before taking control of SENELEC, Hydro-Québec announced it expected an 18% return on their investment and argued the contract would spur $200 million worth of business for Québec companies.51 Barely a year later, the accord collapsed. The Financial Times reported that the Franco-Canadian management angered many by replacing local staff with expatriates and local suppliers with foreign contractors.52 A year into its contract, SENELEC requested a rate increase 17% above the amount stipulated in its contract. This combined with its failure to invest in infrastructure upgrades, prompted a new Senegalese government to re-nationalize the company.53

(The Canadian government, through CIDA, financed Hydro-Québec to build a highly controversial dam project in Mali and Senegal. In the mid-1980s the public utility won part of a $46 million aid agency contract to build the Manantali dam and in the mid-1990s HQI benefited from smaller dam contracts.54 The dam on the Senegal River left over half a million West Africans without a means of subsistence. It also sparked the resurgence of diseases blamed for thousands of deaths annually and exacerbated tensions between Mauritania and Senegal, which culminated in armed conflict. “While the Manantali project has impoverished hundreds of thousands of people,” explained Probe International policy director Grainne Ryder, “Canadian companies have done very well by this disastrous scheme.”)55

Another Crown corporation, Manitoba Hydro International (MHI), weakened the public character of at least two African electricity providers. In 2006, MHI won a contract to manage the Kenya Power and Electricity Company after the “World Bank insisted that a management contract for KPLC had to be given to a private company” as a condition for $152 million US.56 Unhappy with MHI management, the Kenyan government failed to extend its contract for a third year and withheld $150,000 of a $450,000 executive performance bonus, which angered four MHI managers seeking a big payday.57

In an even larger endeavour than in Kenya, Manitoba Hydro and CPCS Transcom played a part in privatizing the Power Holding Company of Nigeria (PHCN), the main electricity provider for the nation of 160 million. In 2013 CPCS oversaw the selloff of 11 power distribution companies and four gas-fired generating plants as well as the long-term concessioning of two hydro plants. According to the firm: “CPCS worked hand-in-hand with the Federal Government as its transaction advisor in every aspect of this sale. CPCS carried out the due diligence review, developing detailed privatization plans for each of the successor companies. We also advised on and assisted in implementing various reform measures to the electricity sector of Nigeria to support the new commercial framework, including the drafting of Power Purchase Agreements, Transmission Agreements and Performance Agreements to allow the government to monitor the long-term performance of the private sector and ensure they maintain their investment commitments. CPCS was responsible for administering the entire privatisation transaction, including responding to thousands of investor inquiries, evaluating proposals received, leading the negotiations with preferred bidders, and assisting the government in completing the sale and handing over companies to the private investors.”58

It is important to note that this “administration” work is expensive. While CPCS is usually hired directly by the World Bank, USAID, CIDA etc. — or with money put up by the donors for Western consultants — the fees it charges are considerable. In a London-based biweekly Nigerian Watch article headlined “High Consultancy Fees and Spiraling Costs Threaten Railway Network Revamp” it was reported that “International rail transport consulting company CPCS Transcom, are among the leading firms currently providing Nigeria with different consultancy and feasibility services. However, their feasibility consultancy services come at a huge cost to the ministry despite the fact that such hefty bills do not themselves guarantee the completion of projects in the sector.”59 The article cites a feasibility study for which CPCS was paid $200,000. To put this sum in perspective, 70% of Nigerians live on less than two dollars a day and Nigeria’s monthly minimum wage is about $120.

The Nigerian government generated the tidy sum of $8 billion from the electricity sale. But, as CPCS explained, the privatized company’s “liabilities” were “stripped out and held by government” and “all staff” were “retrenched” with their “pension obligations” paid by the government.60 What’s more, the government had recently spent between $8 and $20 billion — depending on your source — building new power plants under the Nigerian National Integrated Power Project.61

One analyst dubbed the electricity selloff “the build-and-privatize model” while the Director General of the Bureau of Public Enterprises, Bolanle Onagoruwa, said “the privatisation of the power utilities is unique and different from previous privatisation programmes in the country in that it is driven by the need for efficiency and investment rather than optimisation of proceeds to the government.”62 This was music to the ears of the private interests who acquired the public infrastructure at a bargain, in some cases as the sole approved bidder.

The Financial Times reported that businessmen close to the government and former military leaders acquired most of the assets. “The sale of the plants attracted strong interest from some of Nigeria’s richest businessmen as well as retired military generals.”

Prior to the sale, Reuter’s correspondent Joe Brock wrote an article headlined “Murky Deals Cast Doubt over Nigeria’s Power Sell-off”. “Since power minister Barth Nnaji resigned in August over an alleged conflict of interest, doubts are gathering about the integrity of the process, as oligarchs with scant experience in running power firms line up for a slice of this lucrative pie. As with Russia in its 1992-1994 sell off of state assets, it is entrenched political and business elites who look set to win much of Nigeria’s power sector, even while Western aid agencies are backing the process with tens of millions of dollars.”

Power minister Barth Nnaji resigned in the middle of the privatization drive when attention focused on his interests in companies bidding for the publicly owned Afam Power Station and Enugu Distribution Company. Reuters reported that Britain’s Department for International Development “funded Nnaji’s office throughout even though it was public knowledge that he had a stake in a company bidding for one of the power plants.”

As a strong proponent of the electricity privatization, Nnaji found international backing. The Daily Trust called him someone “who investors and development partners said inspired confidence to invest” while Nigerian President Goodluck Jonathan approvingly described Nnaji as a “product of the World Bank.”63

Canadian officials also backed Nnaji. Sunday Trust reported that “the award” of a “management contract to Manitoba [Hydro] was backed by the former Minister of Power, Barth Nnaji.”64 Canadian officials worked with the minister because he favoured privatization, a direction Canadian diplomats had long pressed for. In 2011, High Commissioner Chris Cooter prodded Nigerian authorities to proceed with the controversial electricity privatization. In an article headlined “Canada Joins Race for Nation’s Power Market”, the Daily Trust reported that Cooter visited minister Nnaji and told the press afterwards that “the air indicates that something is enveloping Nigeria’s capacity to lead the world, we are here to compliment these efforts to resolve your electricity challenges and galvanize your industrial leadership of Africa.”65

Two years earlier Nigeria’s media reported on a visit made by Canada’s trade commissioner to lobby for electricity reform and in 2005 Ottawa put up 82.5 million Naira (about $200,000 today) to train staff of the National Electric Power Authority (predecessor to the Power Holding Company of Nigeria).66 ThisDay reported that “through this initiative, a framework for the eventual privatisation of the authority [Canadian High Commissioner David] Angel said, has been established.”67

While Canadian officials promoted privatization, Nigerian activists denounced the 2013 sale of the country’s electricity network. In an article headlined “Power Firms Sold for N404 Billion After Gulping N3.2 Trillion” the president of the Civil Rights Congress of Nigeria, Shehu Sani, called the privatization “a criminal robbery of the people’s collective assets by a few bourgeoisie elites.”68

Others complained about rising costs. The Financial Times reported that the Nigerian government boosted electricity rates by 88% in 2012, “under reforms designed to revive the power sector and attract outside investors.” While this helped guarantee “profitability of investment”, the tariff hike further priced out the 70 per cent of Nigerians who live on less than $2 a day.

As part of the privatization process, CPCS procured Manitoba Hydro International to manage the Transmission Company of Nigeria (TCN), the only part of the Power Holding Company of Nigeria that was meant to remain government property.69 But MHI said it would use its three-year contract to reorganize TCN in the hopes of privatizing most of the country’s sole transmission provider. A Nigerian analyst pointed out the strangeness of a public utility facilitating a process that would be illegal in its home province (The Manitoba Hydro Act requires a provincial referendum for privatization). Policy Chair on Energy, Infrastructure and Technology at Nigeria’s NDi think tank, Tunji Ariyomo, wrote: “One finds it a bit ironical that while Manitoba [MHI] remains solely a government owned company in Canada with a legislative protection to prevent its privatization, the company has announced that one of its key objectives is to reorganize Transmission Company of Nigeria such that its function as a Transmission Service Provider (TSP) could be separated and for the TSP to become a private commercial company.”70

MHI’s plans were resisted by elements in the government as well as the workforce, and much of the population. The electricity workers union demanded all outstanding labour issues be resolved prior to MHI’s takeover of TCN. They blocked MHI managers and minister Nnaji from entering the corporate headquarters until their picket lines were broken up by dozens of armed military personnel. The Daily Independent reported that “the workers were beaten to a pulp.” But the workforce refused to back down, with the Daily Independent newspaper noting that they “proceeded to make the environment a living hell for the Canadian firm.”71

Manitoba Hydro’s $24 million contract to manage TCN created conflict within the government and power ministry. While minister Nnaji supported it, the Daily Trust reported that “some powerful interests in the Ministry of Power were reportedly unimpressed with the arrangement to transfer the management of the transmission plants to the Canadian firm.”72 Electricity analyst Tunji Ariyomo provided a window into their concerns. He questioned the impact MHI’s contract would have on job creation and knowledge transfer and expressed concern, arguing that “responsibility for the management of the entire national power transmission backbone covering the 910,768 sq. km of the nation’s land space is being outsourced to one single monopoly.” Ariyomo further explained that “rather than receiving payments from this contract, government of Nigeria would be paying the platform operator. This is awkward. It directly negates the entire narrative behind a private sector led electricity sub-sector while potentially leaving room for collusion and ultimately corruption.”73

A year after MHI took charge of Nigeria’s transmission company, the chairman of TCN’s supervisory board, Hamman Tukur, resigned in protest. He accused the Canadian provincial utility of a domineering style and denounced MHI for appointing a new director to the TCN board, a move that should have been the government’s prerogative. Tukur told an interviewer: “Can you imagine this! Somebody from Manitoba in far-away Canada appointing a managing director and chief executive officer of the Transition Company of Nigeria owned by the Federal Government of Nigeria.”74

An engineer by training, Tukur also criticized MHI’s selection to chair the TCN board. “This Mr [Mack] Kast, who was being appointed the new TCN CEO has a Bachelor’s degree in Commerce, not in Engineering, from the University of Toronto, Canada. Can you believe this? He is now the chief executive of the TCN, responsible for providing electricity to a country of over 150 million people. God! This is unbelievable.”75

Tukur, of course, was critical of the government for allowing MHI to usurp his authority. But, the Nigerian government was under significant pressure from the G7 and international business community to accelerate a privatization process that was promoted partly on the grounds that the transmission company would be reorganized. Additionally, Canadian officials actively promoted MHI.

Four months after taking control of TCN, Manitoba Hydro’s contract was cancelled by Nigerian President Goodluck Jonathan. With the workforce protesting and many in the government opposed to MHI’s plans, Director General of the Bureau of Public Procurement Emeka Eze highlighted irregularities in the process that led to MHI’s selection. According to the This Day, Eze sent a memo to the president “pushing for its [MHI’s contract] cancellation on the premise that it did not pass through due process as provided under the Public Procurement Act.”76

Canadian officials were hostile to the cancellation of MHI’s contract. In an article headlined “How Canadian Govt Forced [President] Jonathan to Make U-Turn” the Abuja Leadership reported that Canadian High Commissioner Chris Cooter contacted the minister of finance, vice president and president, telling them “that the Canadian government was unhappy with the issue and may be reluctant in supporting Nigeria in other sectors due to the way Manitoba has been treated.”77 The high commissioner also made Canada’s displeasure known to the public. “Manitoba Hydro, a company with extensive international experience, was selected for a three-year contract through a very transparent process to transform TCN into a financially sustainable and self-sufficient company in the power sector,” Cooter said in an official release.78 In his intervention the high commissioner also implied that if the MHI contract was not restored it could impact Canadian investment. “The message I am conveying back to Canada is that Nigeria is open for business, and that the Manitoba Hydro contract proves it,” Cooter noted. “To that end, in January our trade minister will come to Nigeria with a delegation of Canadian business investors in many fields, together with educational institutions.”79

The Canadian lobby was successful. Less than a week after MHI’s contract was cancelled the Nigerian government again reversed course. Six months later, during a meeting in Ottawa for the signing of a Foreign Investment Promotion and Protection Agreement, International Trade Minister Ed Fast personally thanked Nigerian Vice President Mohammed Namadi Sambo. This Day reported that “Fast expressed Canada’s gratitude over the manner issues surrounding Manitoba Hydro was [sic] resolved.”80

Four years prior to the Ottawa meeting, the trade commissioner at the Canadian High Commission in Abuja, Sophie Bibeau, accompanied three MHI representatives to the Nigerian Electricity Regulatory Commission’s headquarters to discuss the power industry. Further advancing the Manitoba company’s interests in Nigeria, Ottawa put up 82.5 million Naira in 2005 for a MHI administered electricity sector staff training initiative.81

It’s hard to imagine that the people of Manitoba wouldn’t be interested in what their crown corporation is doing in Africa, but despite hundreds of articles in Nigerian and international business outlets, the Canadian media ignored Manitoba Hydro’s role in Nigeria. Aside from the Dominion and University of Winnipeg radio CKUW the only mention I found was a 250-word Winnipeg Sun article that failed to discuss the political context. The May 2013 piece simply quoted Manitoba Hydro’s spokesman, Glenn Schneider, calling the Nigerian contract a way “to make a little extra money on the international market. ... That money flows to Manitoba Hydro itself, which helps in a small way to keep everybody’s rates down.”82 But, in a discussion of the company’s international division five years earlier, Manitoba Hydro president Bob Brennan told the Globe and Mail Report on Business: “You’re not going to make [enough] to reduce rate increases in Manitoba, but you are going to make a bit of money.”83 Brennan said MHI’s operations were largely viewed as an opportunity for staff development and to provide work for retirees (managers no doubt).84

The lack of oversight or even interest by the media in covering what is happening in Africa makes it easy for Canada’s preeminent privatization consultants to aggressively campaign against public utilities and services. Driven by ideology and a desire to make more money, CPCS (and other consultants) promote the idea that the public cannot build, operate or manage services. They claim the way forward is through public-private partnerships (PPPs), which often go beyond a standard design and build construction contract to include private sector participation in service operation, financing and decision making. CPCS officials sing the praises of PPPs in their writings, speeches and the company’s PPP newsletter. The firm also sponsors various pro-privatization forums such as the annual Africa Public Private Partnership Conference & Showcase.85

In a striking example of CPCS’ role in shaping the overarching policy environment, the Ottawa firm was hired to revise the African Union/NEPAD African Action Plan (AAP). At the 2008 Tokyo meeting of the African Partnership Forum, which comprises the wealthy donor countries, some officials criticized an initial draft of the AAP. To mollify this opposition, the African Development Bank — on behalf of the NEPAD Secretariat, AU Commission and United Nations Economic Commission for Africa — hired CPCS with the “objective of producing a revised AAP with buy-in from all stakeholders.”86

In an impressive display of cognitive dissonance or pure cynicism, CPCS’ review notes “the first guiding principle of NEPAD is African ownership and leadership. Accordingly, the process of selecting programmes and projects for the revised AAP must ultimately be done by African institutions.”87 But, in the meantime the Ottawa firm would determine the African Action Plan, or more precisely, what it believed the non-African G7 donors wanted to see in the AAP.

While winning the AAP contract reflects its status in neoliberal donor circles, CPCS is not a household name in Canada. Despite that, the company says “our clients have included every level of government in Canada, foreign government departments and agencies, industry associations, the private sector and all major international financial institutions, including the World Bank.”88 The company is also well connected in Ottawa. CPCS’ Vice President for French Africa, Jean-Francois Arsenault, worked for the Canadian International Development Agency while another company vice president held “economic advisory positions in the Government of Canada.”89 CEO Peter Kieran sits on the Canadian Trade Commissioner Service’s Infrastructure Public-Private Advisory Board and is a director of the Commonwealth Business Council. 90 He’s also chairman of the Canada Nigeria Chamber of Commerce and former chair of the Canadian Council on Africa (CCAfrica) and currently sits on its board of directors. CCAfrica claims to “maintain very close relations with the Canadian government as well as African governments.”91 Reflective of his stature in Ottawa, Kieran promotes EDC’s services in the export agency’s promotional literature.

CPCS’s African operations also receive high-level backing. During Prime Minister Stephen Harper’s 2012 visit to the Francophonie Summit in the Congo a CPCS official, Joseph Jones, participated in a business round table with the PM while senior company consultant Peter James participated in a 2015 trade mission to Tanzania with the trade minister. In January 2013 International Trade Minister Ed Fast visited a CPCS light rail project in Nigeria. A congratulatory release from Fast’s office read: “CPCS has successfully completed over 40 projects in Nigeria … The company is a good example of Canadian expertise helping Nigerians develop their booming economy.”92

Ironically, part of the reason CPCS has gotten so big in the privatization business is the government support it receives. Beyond the high-level diplomatic backing, Canadian officials based on the continent aid the company. In the Congo, the company reports, “the Canadian Embassy has provided valuable assistance in introducing CPCS to the local business community.”93

More significantly, Ottawa provides about $1 billion annually to the World Bank and Canada’s influence within the institution helps this country’s businesses win Bank financed work. But the federal government also organizes various initiatives to ensure that Canadian businesses profit from World Bank contracts. In 2015 Devex.com reported that “Canada’s foreign aid chief was in Washington to listen, learn and leverage his political clout to advance Canadian business interests with the World Bank.”94 A representative of CPCS accompanied development minister Christian Paradis to the meeting.95 Similarly, in 2013 key Canadian privatization consultants, including CPCS CEO Peter Kieran, participated in a meeting with then International Development Minister Julian Fantino on the sidelines of a World Bank conference.96 A government release noted that “Minister Fantino hosted a roundtable to strengthen the partnership opportunities between the Canadian private sector and the World Bank.”97 At the meeting Ottawa announced a $20 million contribution to create a Canada-International Finance Corporation Partnership Fund.98 An arm of the World Bank, the IFC encourages private sector development in impoverished countries.

Despite the many existing forms of government support (EDC financing, aid, diplomatic representation, World Bank influence etc.) the free market proponent complained that Ottawa isn’t doing enough to support Canadian corporations in Africa. In 2013 Kieran told a business journal that Ottawa should act more like how he believes Beijing operates in Africa. “The Chinese government plays such a strong coordinating role that their companies are able to offer projects that go all the way from conceptual design through to financing, engineering and construction.”99

Democratic accountability is nearly impossible when the public is largely uninformed about how their government supports corporations in Africa. Lack of information also makes it easy for governments to “spin” what’s happened into a story that suits their interests. In the next chapter Rwanda further illustrates this point.