PRIVATIZATION AND COMMERCIALIZATION IN NIGERIA PROBLEMS AND PROSPECTS

ABSTRACT

Given  Nigeria  precarious  financial  situation  which emanated the economic crisis of 1980s and 1990s, coupled with the poor quality service rendered by the public enterprises and their poor returns to investment, the privatization and  commercialization of  public enterprises aim at resolving an economic problem of operational inefficiency. Policies were designed to guide the implementation process of privatization and commercialization programme, but the implementation process of the policy has not been free from problems resulting  from  controversing  which  confronts  the programme and the complex nature of our country Nigeria. This study underscores some of the major issues and problems of privatization and commercialization in Nigeria and   provides   some   guidelines   for   evolving   optimal modalities  for   a   successful  implementation.  The  first chapter is introductory covering the background of the study, statement of  problems, research questions, study objectives, research hypotheses which focus on problems of implementation, significance of the study and scope and limitation of the study. Chapter two is a study of relevant literature, while chapter three takes a deep study on the method of the research which involves the research design, area of study, population of the study, sample size and sampling procedure.  Others are the sources and types of data and instruments for data collection. Validity and reliability of research instruments and method of data collection are also contained in chapter three. Chapter four deals with presentation and analysis of data while chapter five deals with the summary of findings, conclusion and recommendations.

CHAPTER ONE

1.1  BACKGROUND OF THE STUDY

Governments across the globe have come to reassess their ownership and involvement in enterprises that could otherwise be managed by the private sector.   In many developing countries where state ownership of public enterprises were regarded as a necessary social service aimed at providing employment for their citizens, privatization and commercialization of such public enterprises have been on the increase as a result of the short comings from government ownership of such enterprises.

However, the problems of public enterprises which include ill-conceived investment, political interference in decision making, costly and inefficient use of public resources, increased budgetary burden, over-extension of government’s managerial capacity, diversion of credit and other resources meant for  expansion to private pockets,

abandonment of projects and the harsh economic realties have forced Nigeria government to embark on privatization and   commercialization   of   her   major   enterprises   like National Electric Power Authority (NEPA), Nigerian National Petroleum Corporation (NNPC) and others.    Moreso, privatization and commercialization have helped to break up monopolies which hitherto have been enjoyed by some of the above named Nigerian enterprises.   Therefore, central planning and state ownership has become a thing of the past citizens are encouraged to participate in the privatization and commercialization scheme of the Federal government of Nigeria.

Although method of privatization and commercialization may differ from country to country, the central objective has always been to increase revenue generation for the state, relieve the sate from the burden of supporting non-performing businesses or enterprises and also to encourage competition.

Privatization and commercialization in Nigeria is not without problems.  Some of these problems are bottlenecks in the system, geopolitical spread, opposition from Ministry Officials, antagonism by labour unions and unco-operative attitude of workers in enterprises to be privatized and commercialized by Nigerian government.

1.2  STATEMENT OF THE PROBLEM

The problems of privatization and commercialization in

Nigeria are highlighted below.

(a)    Antagonism by labour Unions

(b)    Socio-political impediments

(c)    Geographical spread

(d)    Opposition from Ministry Officials

(e)    Bottlenecks in the system

(f)     Institutional Investors

(g)    Poor   conception   by   workers   of   the   affected enterprises.

1.3  OBJECTIVES OF THE STUDY

This  study  is  aimed  at  achieving  the  under-listed objectives:

(a) To examine the evolution and rationale for privatization and commercialization programme in Nigeria.

(b)    To  evaluate the  performance and  contribution of privatization commercialization programme in Nigeria to socio-economic and political development in the country.

(c)    To examine critically some problems which inhibit the            effectiveness      of       privatization      and commercialization policy in Nigeria?

(d)  Make  recommendations  for  the  successful privatization   and   commercialization   policy   in Nigeria.

1.4  RELEVANT RESEARCH QUESTIONS

The following research questions were used to draft the questionnaire for the study.

(a)    How   successful   has   the   Bureau   for   public enterprises (BEP) been implementing the privatization and commercialization programme in Nigeria?

(b)    What are the problems associated with privatization and commercialization in Nigeria.

(c)  Is the share ownership done widely and well dispersed?

(d)    Does  the   opposition  form   labour  Unions  and workers in the affected enterprises regard the privatization and commercialization programme?

(e)    Is the Bureau of Public Enterprises (BEP) achieving an  even  geographical  distribution  of  buyers  of

government   interest   in   the   enterprises   being privatized and commercialized?

1.5  RESEARCH HYPOTHESES

The following hypotheses will guide the study.

Hypothesis One:

Ho:  Share ownership of the privatized and commercialized enterprises among the public is widely and equitably dispersed.

H1:   Share ownership of the privatized and commercialized enterprises among the public is not widely and equitably dispersed.

Hypothesis Two

Ho:  Policy of geographical equity in the divestiture process was achieved.

H1:   Policy of geographical equity in the divestiture process was not achieved.

Hypothesis Three

Ho:  Opposition from labour Union has direct effect on the implementation process of privatization and commercialization.

H1:   Opposition from labour Union have no direct effect on the        implementation   process   of   privatization   and commercialization.

1.6  SIGNIFICANCE OF THE STUDY

This study on privatization and commercialization in Nigeria, issues and problems has some benefits, which include:

(i)      Since   privatization   and   commercialization programme is now a global trend, highlighting problems hampering it many help to improve its course.

(ii)        Privatization   and   commercialization   programme provide   useful   information   to   policy   makers,

economic planners as  well as  the general public interest in owing shares of some enterprises.

(iii)       This study will definitely be useful to the Bureau of public enterprise (BEP) in  Nigeria as a  reference material.

(iv)       Moreso, as the search for knowledge is endless, the stud          will  further  enrich  the  literature  on  the privatization and commercialization debate with empirical evidence.

1.7      SCOPE AND LIMITATION OF STUDY

This study would focus on privatization and commercialization in Nigeria, issues and problems. Therefore, issues and problems arising from the implementation process of the report from members of the Bureau of public enterprises will serve as basis for judgment.

Nevertheless, many constraints were encountered during the course of writing this research work.   As not

much has been researched into this topic, collection of data from related literature was a very serious problem.   The researcher met difficulties in efforts at obtaining relevant information from officials of Bureau for public enterprises. The limited time frame made it difficult for the researcher to visit most of the Federal government enterprises to be privatized and commercialized in order to obtain reactions of the workers.   The researcher was also financially constrained as he had to spent money on local transport, photocopying of materials and administering of questionnaires.

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