Abstract
The privatization and commercialization of Nigerian
enterprises today, faces a lot of challenges in tackling the menaces of
corruption and mismanagement of public funds. It is because of social issues
like economic inequalities, unemployment that made the state to interfere in
economy of Nigeria. Government chose public sector as a means or medium for
economic and social development due to poor managerial skill, weak
technological base etc, this enhanced the zeal to establish various enterprises
institution in Nigeria. Then, due to inadequate capital and lack of finance,
public enterprises in Nigeria are confronted with many problems by the
employees, managers and political interference in the affairs of public
enterprises. This study concluded by saying that the effect of privatization
and commercialization on the Nigerian economy can only take effective progress
when the enterprises are wholly or partially in some cases handled and
controlled by the private owner whom will not relent in the optimization of profitable
enterprises.
TABLE OF
CONTENTS
Title page i
Certification
ii
Dedication iii
Acknowledgements
iv
Abstract v
Table of
Contents vi
Chapter
One: Introduction 1
1.1 Background to the Study 1
1.2 Statement of the Problem 4
1.3 Objectives of the Study 5
1.4 Statement of Hypothesis 5
1.5 Significance of the Study 6
1.6 Scope of the Study 7
1.7 Limitations of the Study 7
1.7 Definition of Terms 7
Chapter
Two: Literature Review 9
2.1 Theoretical Framework 9
2.2 Reason for the establishment of the public
enterprises
in Nigeria 13
2.3 Rational for privatization and
commercialization in
Nigeria 16
2.4 Privatization and commercialization programme
in
Nigeria 17
2.5 Technical committee on privatization Act of
(1988)
(TCPC) 18
2.6 Bureau for
public Enterprises Act of 1993 20
2.7 Public
enterprises privatization and commercialization
Act of 1999
21
2.8 Politics
of privatization and commercialization in
Nigeria 22
2.9 Privatization and commercialization exercises
(1999-2010) 24
2.10 Empirical literature reviews 26
Chapter
Three: Research
Methodology 32
3.1 Research Design 32
3.2 Population
of the Study 32
3.4 Sample
and Sampling Technique 32
3.5 Method of Data Collection 33
3.6 Method of Data Analysis 34
Chapter
four: Data Presentation and Analysis 35
4.1 Presentation of Data 35
4.2 Data
Analysis and Hypothesis Testing 38
Chapter
Five: Summary of Findings, Conclusion and Recommendations 45
5.1 Summaries of Findings 45
5.2 Conclusions 46
5.3 Recommendations 47
References
50
CHAPTER
ONE
INTRODUCTION
1.1 Background
to the Study
To be able
transform into an industrialize economy; an underdeveloped economy has to be
privately and commercially developed.
The
importance of establishing public enterprises or corporation began during the
19th century with the British telecom in 1884 under the
telecommunication act and gained a worldwide support in Britain thereafter.
Several nations particularly those in Africa, have come to embrace the
principle as a way of eliminating low performance and inefficiency in the
public enterprise sector.
Following
the trend the Nigerian economy has come to embrace privatization as a cardinal
principle of the state’s economic policy. Over the years, the Nigerian
government has encouraged the development of the public sector, since
independence in 1960 and particularly 1970s but has being commonly non
successive because of government attitude towards public enterprises business
management. In Nigeria, most government owned industries and establishments
remain citadels of corruption, studies in inefficiently and consequently a
heavy drain on the economy. As a means of combating this menace, the (IMF) and
(World Bank) have advocated the twin policies of privatization and
commercialization incidentally Nigeria has fully adopted this policy and is
embarking on it with frenzy. For example, Nigerian breweries changed from the
most inefficient and loss-making company before privatization to one of the
most profitable business in Nigeria. Nigeria has more than 1,800 public
enterprises at federal and state levels which can be categorized as follows;-
i. Public
utility providing infrastructural services.
ii. Strategic industries such as petroleum and
petrochemical, fertilizer plants, iron steel.
iii. Economic /commercial enterprises such as
manufacturing of consumer goods insurance ,banks and hotel and
iv. Departmental/stationary boards designed to
serve specific socials or development roles as university and research
institutes (Ake, 1981).
It is
important to note that the introduction of SAP in 1986 serves as a bench mark
in economic policy-making in Nigeria with the resultant, liberalization,
deregulation, privatization and commercialization measures.
The
critical question here remains how many of these policies have been able to
restructure the political economy of Nigeria and in turn alleviating the
yearnings and aspiration of the working class.
The world
no doubt is moving towards capitalism and liberalization and any nation that is
not moving towards this direction is seen as either not developing or even retrogressing.
A capitalist economy is a free market economy which allows most economic
decisions to be guided by the twin forces of demand and supply. Since
capitalism discourages monopoly but encourages competitive market, it therefore
enhances efficiency and high productivity which is very vital in any developing
economy.
1.2 Statement
of Problem
In a
developing country like Nigeria, privatization and commercialization of public
enterprises is considered by many as a vital tool for the growth and development
of the economy. In Nigeria some of the problems facing privatization and
commercialization program include;
a) Lack
of accountability
b) Corruption
c) Lack
of transparency
d) Inconsistency
It is
important to note that the major function that informed the establishment of
these public enterprises are to control the resources and raise funds for the
provision of certain infrastructural facilities particularly in services
requiring heavy financial investment e.g. railway, electricity,
telecommunication etc, also to perform the function of generating revenue that
will add to financial development program and projects as veritable instrument
for the creation of jobs; and ultimately facilitate economic growth and
development.
However it
is based on the problems, that the basic propositions of this privatization and
commercialization program are being hindered. In trying to look into these
discrepancies and proffer a way forward towards a state of privatization and
commercialization of public enterprises in Nigeria, that enhances economic
growth and development, this research work emanated.
1.3 Objective
of the Study
This study
has the main objective of ascertaining the effect of privatization and
commercialization of enterprises on the Nigerian economy.
Specifically
we intend to compare the pre and post privatization and commercialization era,
so as to determine the specific effect.
1.4 Statement
of Hypothesis
The
hypothesis tested in this study is stated in its null form as follows:
Ho: Privatization and commercialization has
no significant effect on the GDP in Nigeria.
HI: Privatization
and commercialization has significant effect on the GDP in Nigeria.
1.5 Significance
of the Study
This
research work will help the government and readers to understand those benefits
that privatization and commercialization program embodies which we have
neglected and politicized within the past. In understanding this on the side of
the government, it will allow them to rethink and work towards real
implementation of it and thereby creating a room for the rapid growth and
development of this country.
At the
other hand, it will go a long way to create an avenue for more academic
research. The importance of any research is to finding out solutions that faces
mankind and the environment or society. The study creates awareness to every
citizen of this country and economic planners on the implication of these
privatization and commercialization of public enterprises in Nigeria economic
development.
1.6 Scope
of the Study
The scope
of this research work focused strictly on the effect of privatization and
commercialization programmes on the Nigerian economy 1970 to 2010.
1.7 Limitations
of the Study
In
the course of carrying out this study, the researcher was constrained by the
following.
Nonchalant
attitude of respondents in providing vital answers or information to the
questions asked.
The
case study used in this study may not be a true representative of other firms,
as generalization of the result in this study may not replicate the true
position of things.
1.8 Definition
of Terms
1. Privatization and Commercialization: Privatization can be defined as the
transfer of ownership and control of enterprises from the state to the private
sector. Ikeme (1997) define privatization as any of the variety of measures
adopted by the government to expose a public enterprises competition or to bring
in private ownership , management or control in to public enterprises and
accordingly to reduces the weight of public ownership or control or management.
2. Public Corporations: Public corporation or enterprises as
defined by Ademolekun (1983), are organization that engage as a result of
government activity in the capacity of an entrepreneur. These can be seen as
those enterprises or corporation built, owned and managed by the government.
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