ABSTRACT
A deepening world economic crisis, sustained and a continuous fall in prices and demand for crude oil has left Benue State in particular and Nigeria in general with sure recession and depression. The need for the government to intervene and manage the economy has become very imperative. But the petro – Naira is no more and the need to generate revenue from alternative source is seriously urgent.
However, the purpose of this dissertation is to appraise the impact of privatization on a developing economy, with a focus on Benue Cement Company Plc, Benue State.
The privatization process, therefore, aims at improving the efficiency of such enterprises and encouraging innovation in the ways in which they are implemented. It thus goes hand, with the establishment of an effective regulatory system that protects the consumers and the legitimate core investors – which refers to the economic reform strategy [privatization].
Therefore, the dissertation consists of an introductory chapter and four other chapters. Chapter two dealt extensively with related literature while chapter three covers the research design and methodology.
Chapter four deals with data presentation and analysis.  And chapter five summarizes the findings, proffer recommendations and conclusions for further references and other appendices.
CHAPTER ONE
INTRODUCTION
1.1. BACKGROUND OF THE STUDY
Up till recently, there have been many years of exhaustive deliberations by stakeholders on how to put the Nigeria windingly economy on the path of sustainable growth and development. Now a consensus has emerged on the imperative of the privatization and commercialization of the state owned enterprises.
However, the global economy is characterized by competition, rapid technological development as seen in the fast paced changes in information technology, regional market integration, social economic activities and political unrest.
The inauguration of the national council on privatization is, therefore, very significant in several important respects, it is a critical step in our administration’s social –economic agenda. It is a demonstration of our commitment to institutional reforms. Finally, the response of stakeholder in the month ahead will enable us determine, with a great measure of accuracy, the extent to which we have
regained international faith and confidence in our country in general and the economy in particular.
It is important to observe t hat there was a time when it was considered sound economic policy for government to establish and invest in statutory corporations and state owned companies. Though, it was argued that public owned companies were better for stimulating and accelerating national economic development than private capital. The result was proliferation of such state owned enterprises covering a broad spectrum of economic activities. It is estimated that successive Nigeria government have invested up to
800 Billion Naira in public owned companies. Annual returns on this huge investment have been well below 10%. These inefficiencies and, in many cases huge losses, are charged against the public treasury. With declining revenue and escalating demand for effective and affordable social services, the general public stepped up to its yearning for state owned enterprises to become more efficient.
State enterprise suffer from fundamental problems of defective capital structure, excessive bureaucratic control or intervention, inappropriate technology, gross incompetence and mismanagement, blatant corruption and crippling complacency which monopoly
endanger. Inevitably, these shortcomings take a heavy toll on the national economy.
The problem associated with state owned enterprises and monopolies are not peculiar to Nigeria. It is true, however, that many developing countries which Nigeria is one, have overcome the problems through a well designed and single minded pursuit of privatization programme, the rationale is that privatization permits government to concentrate on resources on the core functions and responsibilities while enforcing the rules of the game so that the markets can work efficiently, with provision of adequate security and basic infrastructure, as well as ensuring access to the key service like education, hearth and environmental protection. The objective is to assist in restructuring the public sector in a manner that will affect the new synergy between learners and more efficient government and a revitalized, efficient and service oriented private sector.
There has been a lot of public debate and concern as to the impact of the implementation of privatization on the social economic status of the country, indeed a slot of public conferences have been held across the country to enlighten, inform the public and appraise the performances of the privatization on the economy of Nigeria.
Despite the extensive adoption of privatization, it has from onset been highly controversial and political scenario, first, these are those who claim that privatization does not produce financial and operational benefits, or at least not enough to offset the social dislocation it causes, secondly, there an acute and pervasive fear that privatization leads to ‘lay-offs, in short run in the firms divested and then economy at the long run. Lastly, there is a wide spread belief that even if privatization enhances efficiency, the bulk of its benefits accrued to a privileged few shareholder, managers, domestic or foreign business interest, those connected to the political elite. While the costs are by the masses, particularly workers and end users. In addition, many are concern that lack of transparency and corruption in the privatization process has minimized the intended gains and led to or deepened broader problem of governance. [Kikeri and Nellis,
2001]. It is therefore, upon this background, that this study seeks to appraise the impact of the scheme on the economy of this country in other words this study seeks to ascertain to what extent the aim and objectives of privatization scheme have been met as a economic reform strategy in Nigeria, with emphasis on Benue cement Company [B.C.C.] Gboko, Benue State.
From a historical point of view, Benue Cement Company [B.C.C.] was incorporated as Limited Liability Company n 1975. However, the company started operations precisely on the 15th August 1984, the first bags of lion brand Portland cement was dispatched. The plant was commissioned with a related capacity of
900,000 tones per annum with the capacity expansion 1.2 million bones per annum. The highest production of 810,538 tones was recorded in 1985 by 1990, the federal government privatized some of it share holding with capital restructuring of the company, the share holding structure was as follows:
1. Federal government 30.00%
2. Benue State government 19.72%
3. Nigeria Bank or commerce & Industry 6.57%
4. Plateau State government 5.09%
5. Cementia holding of Ag of Zurich 4.00%
6. Benue Cement Company Plc staff 3.20%
7. Federal Capital Development Authority 2.89%
8. Nigeria Industrial Development Bank 2.45%
9. New Nigeria Development Company 2.19%
10. The Nigeria Public 23.19%
Due to the privatization effort of the federal government, the bid for core investorship of BCC Plc was won by Dangote Industries Limited [DIL]. However, the core investor could not take control of the Benue Cement Company [BCC] Plc as a result of stiff opposition from the Benue state government. Geographically Benue Cement Company is located at Tse-Kucha, a village 72 km on the Makurdi – Gboko Road. This location was chosen primarily because the availability of local raw material [limestone and clay] at Mbayion in Gboko local government area of Benue State.
Organizationally, Benue Cement Company Plc has a peak –like management structure. The company has a board of Directors made up of the following members, a Managing Director, four [4] General Managers, Sixteen [16] Senior Managers as shown in the table below.
The organizational structure has given rise to high cost in administration due to staff strength. It is a common knowledge that most business organizations are discarding a bureaucratic nature of running an organization. Before the privatization process, the company’s management structure was made up of a Managing Director, Deputy Managing Director and four other managers.
However, the present structure affects decision making process thereby slow pacing actions and consequently affecting the overall performance of the company. The major performance indexes of Benue Cement Company.
This material content is developed to serve as a GUIDE for students to conduct academic research
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