PRIVATIZATION AND COMMERCIALIZATION OF GOVERNMENT PARASTATALS IN NIGERIA (A CASE STUDY OF PHCN)

ABSTRACT

This premise of this research is based on Privatization and Commercialization of Government Parastatals in Nigeria with reference to Power Holding Company, Nigeria (PHCN)

The research adopted a survey research design. A well structured questionnaire was designed and administered to respondents. A sample size of one hundred (100) was drawn from the population of study. The sampling was made based on a simple random sampling technique.

The data gathered were presented in tables and analysed with simple percentages. The hypothesis formulated was analysed with the use of Chi-Square technique. It was concluded that - That, privation and commercialization would affect the performance of the power sector; that privatization and commercialization would improve economic performance of parastatals; Privatization and commercialization would solve management problems and productivity of workers in parastatals.

Recommendations were proffered that; It recommended that; The policy making government body should separate the planning and procurement of services from their production and delivery; it can then divest itself of much of it’s operating responsibility.

TABLE OF CONTENTS

Title Page                                                                        i

Certification                                                                   ii

Dedication                                                                      iii

 Acknowledgment                                                           iv

Abstract                                                                         v

Table of Contents                                                           vi-viii

CHAPTER ONE: INTRODUCTION

1.1     Background to the Study                                     1-2

1.2     Statement of Problem                                           2-3

1.3     Objectives of the Study                                         3

1.4     Research Hypothesis                                            4

1.5     Significance of the Study                                      5

1.6     Scope and Limitation of the Study                       5

References                                                            6

CHAPTER TWO: LITERATURE REVIEW

2.1     Privatization and Commercialization:

A Conceptual Discourse                                       7-15

2.2     Initial Problems Facing Privatization                              15-16

2.3     Theoretical Framework of Privatization and

Commercialization Policy                                     17-20

2.4     Privatization and the Nigerian Economy               20-28

2.5     Benefits and Economic Justifications                   28-29

2.6     Challenges of Privatization in Nigeria                   30-33

References                                                            34-38

CHAPTER THREE: RESEARCH METHODOLOGY

3.1     Introduction                                                         39

3.2     Research Design                                                   39

3.3     Population of Study                                              40

3.4     Sample and Sampling Techniques                       40

3.5     Sources of Data Collection                                    40

3.6     Instrument (Questionnaire) Design                      41

3.7     Method of Data Analysis                                       41

CHAPTER FOUR: DATA ANALYSIS AND INTERPRETATION

OF RESULT

4.1     Introduction                                                         42

4.2     Questionnaire Analysis                                        42-54

4.3     Discussion of Findings                                         55

CHAPTER FIVE: SUMMARY, CONCLUSION AND

RECOMMENDATIONS                                       

5.1     Summary                                                             56

5.2     Summary of Findings                                           56

5.2.1 Implication of the Findings                                   57

5.3     Conclusion                                                           57-59

5.4     Recommendation                                                  59-60

Bibliography                                                         61-64

Appendix                                                              65-70

CHAPTER ONE

INTRODUCTION

1.1   BACKGROUND TO THE STUDY

In recent years privatization in particular has become the most common strategy for dealing with the problems of public enterprises (Parastatals) especially since its introduction under the Structural Adjustment Programme (SAP) in the 1980s.

Privatization and commercialization of government owned parastatals in Nigeria arises as a result of observed inefficiencies, weak management structure in the allocation of productive resources in the public enterprises.  The emphasis was placed when Structural Adjustment Programme (SAP) was finally introduced into the Nigerian System of government in June 1986.

In other words, the orchestrated call for privatization and commercialization of parastatals both at the state and federal levels of government was primarily due to poor performance recorded since independence on public corporation and utilities.  The parastatals became drain pipes where lots of funds were pumped into annually, by the government without commensurate output.

Nonetheless, economic deregulation incidentally constitutes one major policy hallmark of government effort at restructuring the Nigerian, economy within the framework of the World Bank /IMF endorsed Structural Adjustment Programme (SAP).

SAP is mostly predicated on the commercialization and privatization programme which derives its legality from Degree No. 25 of October, 1988 and the privatization Act of 1999, and is aimed at competitive efficiency in all ramifications.

In spite of indispensability of parastatals in the power sector to socio-economic development, the sector, especially in Nigeria presents a gloomy picture of under development.

From the foregoing, this study seeks to look into privatization and commercialization of government –owned parastatals with a particular reference to the power sector.  (Power Holding Company of Nigeria).

1.2   STATEMENT OF PROBLEM

This study examined if the privatization and commercialization process of the power sector would breeds efficiency and effectiveness amongst its officials in delivering prompt and reliable services to its teeming clients, consumers and the economy at large.

The problems for this study are;

-       To what extent would privatization and commercialization affect performance of the power sector?

-       To what extent would privatization and commercialization improve economic performance of parastatals

-       The extent to which privatization and commercial promotes consumer sovereignty.

-       To what extent does privatization and commercialization resolve management problems in parastatals.

1.3   OBJECTIVES OF THE STUDY

This research study is set to achieve the following aims and objectives;

-       To examine the effect of privatization and commercialization on the performance of the power sector.

-       To examine if privatization and commercialization would improve economic performance of parastatals.

-       To examine the extent to which privatization and commercialization promotes consumer sovereignty.

-       To determine if privatization and commercialization would resolve management problems in parastatals.

1.4   RESEARCH HYPOTHESIS

The following are formulated below

HYPOTHESIS ONE

H_O:   That privatization and commercialization would not affect the performance of the power sector.

H_l:    That, privation and commercialization would affect the performance of the power sector.

HYPOTHESIS TWO

H_O:   That privatization and commercialization would not improve economic performance of parastatals.

H_l:    That privatization and commercialization would improve economic performance of parastatals.

HYPOTHESIS THREE

H_O:   Privatization and commercialization would not solve management problems and productivity of workers in parastatals.

H_l:    Privatization and commercialization would solve management problems and productivity of workers in parastatals.

1.5   SIGNIFICANCE OF THE STUDY

The relevance of this study rests on the fact that privatization and commercialization could help in fostering and nurturing economic growth and development of parastatals human resources and so on.

Also, this study would enumerate the rationale behind restructuring of government parastatals and also lessen the dominance of unproductive investment in public enterprise.

The significance of the study is also to broaden the knowledge and research on government parastatals.

1.6   SCOPE AND LIMITATION OF THE STUDY

The scope of this study limits itself to privatization and commercialization of parastatals with particular reference to the power sector.

The constraints envisaged are; time constraint, finance, and lukewarm attitude of officials in public sector in giving first hand information about their workings.  Also, lack of reliable data for research study is a limitation. Inspite of these constraints however, this research shall carry out an in-dept study of privatization as it affects parastatals in Nigeria.

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