ABSTRACT
The study focused on the impact of
commercialization on the performance of government owned parastatals in Nigeria
with a case study of Power Holding Company of Nigeria Plc. This became
necessary due to the efforts of government to turn around the fortunes of its
parastatals which have being services of financial drain and poor service
delivery in the country. The study adopted both primary and secondary sources
of data collection. The main sources of data collected were from the primary
sources using the questionnaire approach. This was used to collect personal and
research data from respondents and the Chi-square statistics alongside
percentages were used for the analysis and test of hypotheses. Thus, the
findings are that government through its commercialization programme has
brought a high degree of efficiency into their resource management and
competitiveness that will surely lead to higher productivity. Commercialization
of parastatals in Nigeria of ailing parastatals is a welcome development that
has aided performances of public parastatals. However, it also suffices to say
that commercialization of public parastatals should be innovative, proactive
and continuous to enable public servants deliver efficient services always. It
was also recommended that the new public management techniques should
be embraced to step up the performance of parastatals. These include:
transparency and accountability, performance management, god governance, among
others.
TABLE OF
CONTENTS
CHAPTER ONE:
INTRODUCTION
1.1 Background to the study
1.2 Statement of the problem
1.3 Objectives
of the study
1,4 Statement
of research questions
1.5 Statement
of research hypotheses
1.6 Scope
and limitations of the study
1.7 Significance
of the study
1.7 Organization of the study
1.9 Definition
of terms
CHAPTER TWO:
LITERATURE REVIEW
2.1 Introduction
2.2 Conceptual
Clarification
2.3 Challenges
of commercialization in Nigeria
2.4 Evaluation
of the performance of commercialization in Nigeria
2.5
Comparative analysis and assessment
of commercialization in
selected countries
2.6 Commercialization
and privatization
2.7 Privatization
in Nigeria
2.8 Commercialization
in Nigeria
2.9
The scope of Nigeria's privatization
and commercialization
programme
2.10 The
journey so far
2.11 Problems
encountered
2.12 Power
Holding Company of Nigeria Ltd (PHCN)
CHAPTER THREE:
RESEARCH METHOD
3.0 Introduction
3.1 Research design
3.3 Population
of the study
3.3 Sample and sampling techniques
3.4 Sources
or data collection
3.5 Instrument (questionnaire) design
3.6 Method
of data analysis
CHAPTER FOUR:
DATA ANALYSIS
AND INTERPRETATION OF RESULT
4.0 Introduction
4.1 Respondents’
bio-data
4.2 Analysis
of research questions
4.3 Test of hypothesis
4.4 Discussion
of findings
CHAPTER FIVE:
SUMMARY,
CONCLUSION AND RECOMMENDATIONS
5.0 Introduction
5.1 Summary
of findings
5.2 Conclusion
5.3 Recommendations
References
Questionnaire
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND TO THE STUDY
Commercialization and privatization are programmes of the
Federal Government of Nigeria in recent years to checkmate ailing and comatose
economic and parastatals that perform below expectations Johnson (2004). Before
the commencement of the implementation of the power sector reform in 1999, the
National Electric Power Authority (NEPA) now known as Power Holding Company of
Nigeria Plc (PHCN), was responsible for generation, transmission and distribution
of power throughout Nigeria.
However, Johnson (2004) opined that it is common
knowledge that NEPA now PHCN Plc tailed manifestly to meet the aspiration of
the government and people of Nigeria to provide adequate and reliable power
supply. The main causes of inadequate performance of the sector include:
·
Inefficient
management of the national utility which was run as a monopoly;
·
Inadequate and
non-complementary investments in generation, distribution and transmission;
·
Absence
of clear delineation of roles and responsibilities of public institutions that
took charge of the industry. This led to conflicting responsibilities; state of
infrastructures, conflicting social and economic objectives; low and uneconomic tariffs; theft and vandalization of electricity
equipment; poor payment/commercial discipline; and poor financial performance
(Privatization Digest, 2007).
By and large,
given the dismal performance of the Power Holding or PHCN Limited, the Olusegun
Obasanjo administration in 1999, through the National Council on Privatization
(NCP), undertook an extensive review of the policy, legal and regulatory
framework for generating and distributing electively in Nigeria. The conclusion
was reached that a number of critical structural, policy, legal and regulatory
issues had to be addressed in order for the sector to be financially
sustainable, thus a prerequisite for improved and efficient provision of
electricity services. This initiative led to the formulation of National
Electric Power Policy 2001, the enactment of electricity power sector reform
bill in 2005, the National Electric Power Policy (NEPA) and the Electricity
Power Sector Reform (EPSR) Act of 2005 effectively gave way to commercialization
of PHCN Plc activities (Privatization Digest, 2007).
Based on the reports of the Study Groups and Committees'
promulgated, the Federal Government of Nigeria, in July 1988 promulgated the
privatization and commercialization programme for Nigeria as an integral part
of the ongoing restructuring of the Nigeria economy. The Act also established a
Technical Committee on Privatization and Commercialization (TCPC) with membership drawn from both the
public and private sectors and vested it with wide powers to monitor and
supervise the implementation of the programme. This research proposal seeks to
find the current state of commercialization of government owned parastatals by
studying Power Holding Company of Nigeria (PHCN) Plc.
1.2 STATEMENT OF THE PROBLEM
The challenges and constraints faced by public
enterprises (parastatals) on commercialization emanated from the environment,
such as bureaucratic bottlenecks, public (bureaucracy interference); political
interference/instability of government policies; economic and social instability;
nepotism, bribery and corruption among others.
All these problems are believed to hamper the
implementation of the commercialization of parastatals, especially the PHCN Plc.
These problems would be examined with the aim of proffering solutions to them.
1.3 OBJECTIVES OF THE STUDY
The main objective of this study is to examine the impact
of commercialization on government parastatals.
Other specific objectives include:
a. To examine the nature of commercialization
in Power Holding Company of Nigeria;
b. To find out whether commercialization of
government parastatals has effectively enhanced performance of Power Holding
Company of Nigeria;
c. To determine the extent to which
political interference; bureaucratic bottleneck, nepotism, bribery and
corruption affect commercialization of public: parastatals especially Power
Holding Company of Nigeria;
d. To examine challenges facing the commercialization
of parastatals in Nigeria; and
e. To proffer solution to the problems
facing the commercialization of parastatals in Nigeria.
1.4 STATEMENT OF RESEARCH QUESTIONS
In carry out this study, the following questions are
necessary:
1. What is the nature of commercialization
of activities in Power Holding Company of Nigeria?
2. To what extent does commercialization of
government parastatals effectively enhances performance of the Power Holding
Company of Nigeria?
3. To what extent does political interference;
bureaucracy, nepotism, bribery and corruption affect commercialization of
public parastatals?
4. What are
the challenges facing commercialization of parastatals in Nigeria?
1.5 STATEMENT OF RESEARCH
HYPOTHESES
The following hypothesis was formulated to be tested in
the course of the study
The hypotheses are stated in both null and alternative
forms (Ho) and (H1).
Hypothesis One
H0: Commercialization
of Power Holding Company of Nigeria does not enhance effective performance.
H1: Commercialization of Power Holding Company
of Nigeria does enhance effective performance.
Hypothesis Two
H0:
Corruption
has no effect on commercialization in Power Holding Company of Nigeria.
Hl: Corruption has effect on commercialization in Power Holding Company of Nigeria.
1.6 SCOPE AND UMITATIONS OF THE
STUDY
This study is concerned with commercialization in Power
Holding Company of Nigeria (PHCN) Plc. The study is limited in scope since one
parastatals was studied. This limits the degree of generalization from the
study.
The limitation for this study include: short time for the
research completion, inadequate finance to study a much more larger proportion
of the popularity, difficulty in assessing materials, data from PHCN offices
and also PHCNs management/personnel non-cooperative attitude in attending to
research students.
1.7 SIGNIFICANCE OF THE STUDY
This study is relevant to government public utility
companies in Nigeria i.e. PHCN, NNPC etc. Government companies have the bad
reputation of being inefficient and ineffective. This will change if the
recommendations of this study are implemented.
The study is also important to professionals, consultant
in power sector, to individuals both in academic/professionals researching on
power sector. It is also important for further academic research. The relevance
of this study and its findings would enhance the operational activities to
Power Holding Company of Nigeria (PHCN) Plc for efficiency and effectiveness.
Members of the society will in the long run benefit from
the findings of the study because there will be better service delivery that
will enhance their living standard.
1.8 ORGANIZATION OF THE STUDY
The research study is in five chapters. Chapter one is
the background and introduction of the study, Chapter two is the literature
review and theoretical framework, chapter three consists of the research methodology and research design while,
chapter four is on the data analysis and presentation of results, Chapter five
is on the Summary of finding conclusion and recommendations.
1.9 DEFINITION
OF TERMS
Public Enterprises: Public enterprises sometime referred
to as parastatal or statutory corporation and State-Owned Enterprise (SOES) is
a quasi government body established to do business, play the role of purveyor
of economic development and growth in society and provide social goods and
services to the people and elevate their social and material conditions.
Privatization: Is the means whereby state-owned property transferred
into private hands either totally or partially. It could be done through the sale
or other transfer of shares to a foreign or local investor(s).
Full Privatization:
This refers to the enterprise(s) or firm(s) in which the Federal
Government will give up 100% of its ordinary shareholding for sale to
Individual(s) and groups.
Partial Privatization:
This means divestment by Federal Government of part of its ordinary
shareholding in the designated enterprise(s).
Commercialization: This refer to when the government
still wishes to retain ownership of the business but withdraws from the daily
activities and allows the enterprise(s) manager collect funds and spend without
reference to the government agencies. In this case, the government agencies
remain strictly in a regulatory capacity.
Full
Commercialization: Full commercialization
means that the affected enterprises should operate profitably on a commercial
basis and raise funds from the capital market without government guaranteeing
such funds. Full commercialized enterprises are expected to operate along the
lines of private sector establishments but subject to Federal Government or
State Government general regulatory controls such as fixing rates prices and
charges for their goods and services, capitalized asset, and they can or be
sued in their corporate names.
Partial Commercialization:
These are situations where the affected enterprise(s) generate revenue to cover
their operating expenditures and government may allocate capital intensive
projects in this category.
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