PRIVATIZATION AND COMMERCIALIZATION OF PUBLIC ENTERPRISES IN NIGERIA

Abstract

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 enterprise institutions 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 affairs of public enterprises. The project title is privatization and commercialization of public enterprises in Nigeria: An appraisal of telecommunication. The problems are; is political interference and mismanagement of resources responsible for the poor performance of public enterprises in Nigeria? Could privatization and commercialization enhance the efficiency of public enterprises? Structural-functional theory is used as suitable framework of analysis for privatization and commercialization of public enterprises in Nigeria. The researcher reviewed some relevant textbooks, also used the secondly method of data collection. He found out that privatization is seen as means to harness economy or as measure to increase efficiency of the public sector or organization. Also, the privatization and commercialization has improved the potential, the efficiency and service delivery in Nigeria by making telecommunication easily accessible and affordable. These are the recommendations; as the privatization is in the hands of few individuals government should ensure that before granting the license or opportunity, they should examine and select the competent people who will handle private enterprises and not people of questionable character. The only thing left is for government to hands – off from those enterprises as advocated in the current or present privatization and commercialization exercises.

Chapter One

Introduction

1.1    Background of the Study

The importance for the establishment of public enterprises or corporations was felt in 19th Century and there after. There were a lot of upheavals in European society because of industrialization and urbanization. Social issues like unemployment and economic inequalities necessitated state intervention in economies. Britain is widely referred to as the father of public enterprises.

A good number of African Countries chose the public sector for economic and social development. This account for the reason why many more functions like industrial production, transport, social services, communication etc were assigned to the state in addition to its traditional functions like security, justice etc.

Despite the several exercises of Nigeria economic policies to promote agriculture, industries and other activities, government still depend on monoculture commodity (oil) which failed to provide good capital investment and development due to weak technological base, poor managerial skill etc. This promoted or enhanced the desire to establish various enterprises and massive establishment of government agencies and institutions. 1979 constitution of Nigeria described the official operating of these enterprises and public servants they managed as well as private enterprises. After reviewing the performance of the Nigeria Railway Corporation in 1967 the commission that carried out the exercise recommended that corporation should have an Executive Board whose Chairman would also be the Chief Executive.

The government enterprises require constant financial backing for the smooth running. Due to inadequate capital and lack of financial autonomy public enterprises in Nigeria are confronted with a lot of problems, by managers and employees, government interference, inadequate capital, technological limitation, and political interference in the affairs of public enterprises in Nigeria.

Since monoculture economy cannot meet the demand or generate large sum of revenue to run the economy or by public enterprises, the government seeking ways to reduce the rapid increase of bad economy by adopting policy to boost our economy.

Privatization and commercialization policies are adopted by federal government as a remedy to problems that emanated from public enterprises. There are economic policies which grant full autonomy to public enterprises so that they can operate without government subvention, control and interference which ultimately resulted in efficient provision of service and high productivity that contribute to national growth and development. Although, these two concepts have identical goals and purpose, that is provision of efficient services to the public, high productivity and profitability, yet, they are different in nature and character.

The Federal Government of Nigeria in (1988) through Decree No. 25 set up the Technical Committee on Privatization and Commercialization (TCPC). The TCPC was charged with the responsibility of privatization and commercializing some selected government enterprises. The main reason was to promote greater efficiency and productivity in the public enterprises.

1.2    Statement of Problem

Public enterprises were established by the Federal Government especially in the 1960s and early 1970s when the public sector was seen as a major contributor to economic growth and socio-political stability. The public enterprises of Nigeria set up by government to perform definite social and economic functions for the public.

The functions that informed the establishment of these public enterprises are to control the resources and raise funds for the provision of certain infrastructure facilities particularly in service requiring heavy financial investment e.g. Railway, Electricity, Telecommunication etc. also, to perform the function of generating revenue that will add for financing development programme and projects as veritable instrument for creation of jobs.Therefore, since those functions are not performed, creditable, or efficiently privatization and commercialization policy is introduced by Federal Government of Nigeria. In identifying the problems militating against their performance, the problems are stated clearly below:

(1)    Is political interference and mismanagement of resources responsible for the poor performance of public enterprises in Nigeria?

(2)    Could privatization and commercialization enhance the efficiency of public enterprises?

(3)    Does the privatization and commercialization improve the potential, the efficiency and service delivery in Nigeria telecommunication?

1.3    Objective of the Study

There are some certain aims and objectives for which the researcher embarked on this work such as:

(1)    To ascertain if political interference and mismanagement of resources is responsible for poor performance of public enterprises.

(2)    To ascertain if privatization and commercialization could enhance performance of public enterprises.

(3)    To discover if the privatization and commercialization of public enterprises has improved the efficiency of service delivery.

1.4    Significance of the Study

The importance of any research is tied to find out solutions to the various problems that face mankind in the environment or society. The study creates awareness to every citizen of this country and economic planners on the implications of these privatization and commercialization of the public enterprises in Nigeria economic development.

It helps stake holders assess the performance of NITEL following the privatized and commercialization of public enterprise. It helps researchers on contemporary issues have first-hand knowledge of the performance of privatized and commercialized public enterprises.

1.5    Literature Review

There are various kinds of opinions by many scholars on activities of privatization and commercialization of public enterprises. The federal government has restated its commitment to the privatization programme saying that it would not allow obstacles to make it change its focus.

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