Africa Newsletter 5

Sandra Van Niekerk
Date published: 
Jan 2013

Africa Newsletter 5


1. Energy: Nigeria - privatisation of electricity sector

2. Company: Veolia contract in Gabon to be cancelled?

3. Labour disputes:

3.1. Overview

3.2. Health sector

3.3. Local government

3.4. Education sector

  1. Energy: Nigeria – privatisation of electricity sector 

 Over the last decade Nigeria has been consolidating plans to privatise the energy sector. The process was started with the formation of the Power Holding Company of Nigeria (PHCN), which was unbundled into 18 business units – 1 for transmission, 7 for generation and 11 for distribution.

 There has been a great deal of opposition to this process from the trade unions, particularly the Nigerian Union of Electricity Employees (NUEE). This opposition significantly delayed the process of privatisation, but was not able to stop it. 2012 saw the final stages of the privatisation process:

  • The transmission company has been under a management contract with a Canadian company, Manitoba Hydro, since July 2012. It is a three year contract for which Manitoba will be paid $23.72m.
  • Successful bidders have been announced for the generation companies (Gencos). While some Gencos are being sold, others are being awarded as 15 year concessions.
  • Successful bidders have also been announced for the sale of the distribution companies (Discos).

 Controversy has dogged the whole privatisation process. Some of the key issues which have emerged in the recent process include:

Who is taking over the successor companies? The trade unions and Joint Action Front have argued strongly that it is the very people (ex-politicians, military people and business people) who ran down the electricity utility in the first place, who are now part of the companies winning the bids, and reaping the benefits of the privatisation process.

 All of the consortiums consist of Nigerian companies and international energy specialist companies. Many of the Nigerian companies were set up when the plans to privatise the sector were first made, in order to take advantage of the process. Prominent politicians and military people are associated with these companies. For example the former head of state, General Abdulsalami Abubakar, is involved in Integrated Energy Distribution and Retail Marketing Ltd, which won the bid for the Ibadan and Yola Distribution Companies.

 These local companies have linked up with international energy companies from countries such as India, China, Russia, Phillipines, Thailand, Britain and the USA.

 Conflict of interest: The sudden resignation of the Minister of Power, Professor Barth Nnaji on August 28 2012. No clear reasons for this resignation was given, but it seems to be related to his involvement, through his company Geometric Power, with consortiums which put in bids for Gencos.

 Problems with Transmission Company management contract: Although the management contract was supposed to start on 1 September 2012, delays from the government’s side, including the failure to give Manitoba ‘delegated authority’, prevented Manitoba from taking over.

 Then in November 2012, the Bureau of Public Procurement (BPP) raised problems with the process of procuring the management contract. Initial reports indicated that as a result of this, President Goodluck Jonathan decided to cancel the contract. Pressure from a range of sources, such as the Canadian government, the preferred bidders for the Discos and others who argued that to cancel the contract would throw the whole privatisation process into disarray, as well as Manitoba’s right to demand compensation if the contract was cancelled, resulted in the BPP finally signing off on the contract on 20 November 2012.

 Devaluing the assets: The National Union of Electricity Employees (NUEE) argues strongly that the PHCN assets have been greatly devalued. They argue that the assets are worth N2 trillion, rather than the N200 billion (more recently revised to N400 billion) the government has valued them at.

 Undermining local expertise: Some of the state governments, which put in bids as part of consortiums, or supported particular consortiums, were unhappy when they did not win the Discos. In particular, Edo, Ondo, Ekiti and Delta, the four states that own Southern Electricity Distribution Company expressed discontent that Vigeo Power Consortium, an Indian company, won Benin Distribution Company. They argued that they are best placed to know and understand the conditions on the ground, the current size and state of services and have a realistic loss reduction plan.

 It is ironic that state governments, which support the privatisation programme, now raise the very arguments which should be used against the privatisation programme, in support of their demand for a greater slice of the privatisation cake.

 Existing state investments: The concern of the states, highlighted above, was not a new one. Already, before the bidding process, the NCP and BPE had allotted 15 % in each of the discos to the state. The idea was that while the core investor might get 60% ownership, the rest of the shares would be divided between staff, federal government, and the state government. Because many states were unhappy with the 15% they were also encouraged by the NCP and BPE to join the bidding consortiums in order to get a bigger stake. As it turned out, it was only in the case of one of the Discos (Port-Harcourt) that the state’s bid was successful.

 For more information see :

This Day 9 October 2012 “FG yet to decide on supervisory board for TCN”

Daily Trust 5 November 2012 “Group rejects PHCN’s privatization”

Leadership “Unanswered questions over Nnaji’s exit” 11 September 1012.

This Day 16 November 2012 “President still reviewing Manitoba TCN contract”

This Day 21 November 2012 “BPP backs down, finally ratifies Manitoba contract”

Leadership 20 November 2012 “US $23 million Manitoba contract – how Canadian government forced Jonathan to make u-turn”

Leadership 22 October 2012 “PHCN worth N2 trillion, not N 200 billion – union”

Daily Trust 24 October 2012 “FG to earn N400 billion from PHCN privatization”

Leadership 19 October 2012 “Edo, Ondo, Ekiti, Delta say Discos bidding fraudulent”

This Day 22 October 2012 “A bunch of sore losers”



2. Company:  Veolia contract in Gabon to be cancelled?

 Veolia, a French multinational, has a 20 year concession for the state owned, vertically integrated water and electricity utility, SEEG (Societie d’Electricite et d’Eaux). Veolia also owns 51% of SEEG. The concession is due to expire in 2017.

 Veolia has been criticized since 2007 for its performance in carrying out the concession – it has not kept up with demand, has provided an erratic service, and has not met its infrastructure investment targets. These criticisms were confirmed in a 2010 report by Deloitte, commissioned by the government to assess the company’s  performance.

 Recent disruptions in the water supply have again highlighted questions about the ongoing viability of the contract. The President of the country is quoted as raising questions about the contract.  This time, the company is quoted as saying that they are open to the idea of ending the contract.

 For more information see:

The Wall Street Journal October 29 2012 “Veolia ‘open’ to idea of exiting contract in Gabon”

Global Water Intelligence March 2011 “Veolia defends its position after Gabon audit”

 3.      Labour disputes 

 3.1.            Overview 

 Wage demands continue to dominate labour disputes in the public sector. While this is generally a demand for higher wages, in some cases, such as local government in Zimbabwe, it is a demand that workers’ wages be paid to them in the first place. Another ongoing theme is the need to employ more civil servants and increase the budget for public services, to meet the increasing need in different countries. For example, in Kenya, there is a demand for increased teachers (a call particularly being made by the parents), as well as nurses. And in Egypt, one of the demands of the striking doctors was for an increase in the healthcare budget.

 In some countries, such as Swaziland, labour action has been met with heavy state repression.

 Strikes in the healthcare and education sectors are prevalent in many countries, with demands including pay, promotion issues, and working conditions.

 3.2.            Health sector 

 There have been a number of strikes, many of which have been long-lasting, in the healthcare sector in North Africa. These include:

  • Egypt: doctors strike over healthcare spending, security, and pay in October and November 2012, winning an increase in the doctor’s budget from the government.
  • Morocco: nurses and health workers strike over pay and working conditions during 2012
  • Tunisia: health workers and doctors strike over careers, privatisation, security and union rights in May – June 2012
  • Tunisia: paramedics strike over a police attack on a sit-in held by the workers in August 2012.
  • Algeria: a strike in the health sector led to a 40% wage increase for medical technicians.

 For more information see:

Hall, D October 2012 “Healthcare in Arab countries: data, strikes, and union views” .


Doctors in Mozambique, on strike since the beginning of January over wage demands, ended their strike on 15 January 2013. The demands being negotiated between the government and the Mozambican Medical Association (AMM) included:

  • wages
  • the approval of a Statute of Doctors
  • the allocation of state-owned housing to doctors.

 In 2012, the government agreed to remove the restrictions on how long doctors can live in state housing; and agreed that the Statute, which the government had approved in November, would be rewritten with the input of doctors. But no agreement could be reached on wages. While the doctors were demanding a basic wage of 90 000 meticais (about $ 3 030), the government was offering between 20 000 and 38 000 meticais a month.

 The government indicated that it wanted to include public sector wage scales (which would include the doctor’s wages) in the annual tripartite negotiations between the government, the trade unions and the employers’ associations that normally takes place in March/April. The strike agreement that was finally reached accepted this position, with doctor’s salaries now being referred to the Labour Consultative Commission (CCT) for negotiation together with other public sector wages.

 For more information see:

Agencia de Informacao de Mocambique 6 January 2013 “Doctors threaten strike as from Monday”

Agencia de Informacao de Mocambique 15 January 2013 “Negotiations over doctors’ strike under way”

Agencia de Informaco de Mocambique 15 January 2013 “Doctors’ strike ends”

 In Kenya, nurses in the public sector called off their four week-old strike at the beginning of January 2013. The Industrial Court had declared the strike illegal. Nurses were demanding that their union, the Kenya National Union of Nurses, be registered. Their argument is that once they are registered they will be in a better position to deal with many of the issues confronting nurses. These include:

  • the delay in employing more nurses in the public sector, with the country experiencing a shortfall of 50 000;
  • poor working conditions in public hospitals;
  • the delay in finalizing the Collective Bargaining Agreement as per the salaries and remuneration commission’s guidelines.

 For more information see:

The Star “Nurses call off strike” 8 January 2013

Capital FM 4 November 2012 “Nurses to strike if their union is not registered”

 3.3.            Local government 

 Municipal workers across Zimbabwe continue to struggle to be paid the wages due to them.

 Workers in Masvingo City Council took the council to court over the wage demands, with the court awarding them a salary increase. The council, however, did not pay, arguing that they did not have the funds. The workers then returned to court, and the High Court then ordered the council to pay them over US$3,5 million in outstanding salaries. When the council continued not to pay workers the money owing them, the workers started attaching the council’s moveable assets.

 In Chitungwiza, municipal workers went on strike in November because they had not been paid for three months. The strike affected council clinics, cemeteries, bars and banking halls. The Council went to the Labour Court, who declared the week-long strike to be illegal. This has opened the way for the council to take disciplinary action against the workers who were on strike.

 For more information see:

The Herald 5 December 2012 “Zimbabwe: Council workers attach property”

The Herald 30 November 2012 “Council strike paralyses service delivery”

The Herald 4 December 2012 “Chitungwiza strike illegal”

 3.4.            Education sector 

 In Kenya, teachers went on a three week strike during September 2012. Their demands were wage harmonisation (to bring their wages in line with those of other civil servants); a 300 % wage increase; and the implementation of legal notice 534 on allowances. The government eventually agreed on the issue of paying out a lump sum to workers, at the end of October, to achieve wage harmonisation. The wage increase will be further negotiated. In future, teachers will be paid hardship and special education allowances.

 Meanwhile parents of school children have called on the government to increase the number of teachers in the public sector, and to ensure that there is an even distribution of teachers across the country. Parents argue that because of too few teachers, exam results have been poor.

 For more information see:

The Star 24 September 2012 “Govt pay teachers Sh13 billion from October” 

The Star 7 January 2013 “Parents want govt to employ more teachers”

 Teachers in Swaziland were also on strike earlier this year. They were demanding a 4.5% salary increase – an amount lower than the rate of inflation which stood at 9%. This low wage increase demand came on top of having received no wage increase since 2010. The strike happened in the context of a serious financial crisis for the country, and heavy political repression. During the six-week strike, protests were met by heavy police reaction, including rubber bullets, water cannons and batons. Despite this, the strike was supported by nurses and other civil servants.

 Because of their involvement in the strike numerous teachers were dismissed at the beginning of August, among them the leadership of the Swaziland National Association of Teachers (SNAT). The teachers were eventually reinstated towards the end of August.

 For more information see:

Business Day July 30 2012 “Swazi teachers striking ‘for democracy’”

Web News Daily 30 August 2012 “Swaziland reinstates teachers fired for going on strike”

 In Namibia, about 23 000 teachers went out on strike in November. They were unhappy with the slow pace of wage negotiations, which had started in 2011, and were demanding a 40% increase. They were joined for a short while by other civil servants, including nurses. The strike ended after about two weeks, with the understanding that negotiations over wages would continue between Nantu (Namibia National Teachers’ Union) and the government.

 For more information see:

New Era 13 November 2012 “Teachers’ strike fizzles out”

Mail & Guardian 9 November 2012 “Widespread strike rattles Namibia”