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.
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CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF 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
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(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 categorised 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.
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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 THE 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
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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.