Effects Of Privatization And Commercialization On Nigeria Economy

Effects Of Privatization And Commercialization On Nigeria Economy

Chapter One

Preface

Background Of The Study

The hamstrung application of coffers and fiscal mismanagement of utmost of the public enterprises over the times has redounded in a veritably weak balance distance, inordinate debt and in utmost cases negative network.

likewise, the fact that this idle performance of the state in the administration of public business enterprises creates a result in which public fund that would have been better spent to guarantee new profitable exertion and employment openings for the army of jobless is being used to subsidize garbage that would neither grow nor change.

Public enterprises are enterprises that are controlled by the state, they’renon-profit acquainted enterprise.

The history of state participation in business enterprises wasn’t choice but by legacy. To buttress this fact, origin of state participation business can be grouped under the following four orders

The first order to those which is conscious with the practice in their country. The British directors kept the social public sector conditioning that are traditionally held by the British government. To this order belongs the mileage services assiduity, health, education, water, electricity, harborage oil painting, air and ocean transportation as well as the marketing of agrarian product through marketing boards. In the wake of political independence, these state possessed services are automatically remained by the indigenous public sector. The alternate order of business are that preciously controlled settled foreign, private sector which manifestly controlled by commanding heights. Three of the main factors of product via operation, entrepreneurship and capital. A situation which was compounded by the fact that the distributive trade was also veritably largely in the hand of the foreign-private sector. After independence it was felt that to allow the means of product and distribution to be controlled by the deportees, community would not only make gibberish of the recently acquired independence but would also pacify the sovereignty of the country toneo-colonialism.

The participation of the countries in enterprises in Nigeria dates back to the social period. The task of furnishing infrastructural installations similar as road, road, islands, water, electricity and harborage installations fell on the social government due to the absence of indigenous companies with the needed capital as well as the incapability or reluctance of foreign trading companies to embark on this capital ferocious systems. This involvement was expended and consolidated by the social weal development plan( 1946- 1956) that was formulated when the labor party came to power in the United Kingdom. This trend continued after independence similar that by 1999, it was estimated that successful Nigerian governments has invested up to 800 billion naira in public possessed enterprises.

The Privatization and Commercialization net of the 1988 and the Bureau of Public Enterprises Net of 1993 defined privatization as the handover of part or all of the equity and other interests held by the civil government or any of its agencies in enterprises whether wholly or incompletely possessed by the civil government. Although privatization isn’t public enterprises( privatization and commercialization) act of 1999, we can assure that it’s supposed to have the same meaning.

However the business enterprises came into participation in business enterprises similar as control and power of similar enterprises can be supported on the following grounds, these includes

As a means of guarding the consumer against monopoly

1. Where it was clear, as with airlines that the assiduity for numerous times might have to be subsidized by the state.

2. Where an assiduity was easily technology hamstrung and where the private possessors appearance to be unintentional or unable of perfecting it.

3. Where because of economics of scale, a service could be handed more efficiently nationally than locally as with electricity.

still, the forenamed public enterprises have been subordinated to examens, one to poor operation and hamstrung application of coffers and substantially regard to a dead wood that will neither grow nor change. It was these construct review levied against them that leads to the idea of privatization and commercialization. It’s necessary to punctuate the main problem facing the public enterprises. Among them are

ü Lack of freedom

ü private considerations

ü Easy access to capital

ü Political hindrance

Administrative ministries have been allowed enough freedom of action to the parastatals. For case, the attempt to level down the remuneration of parastatals because only officers who could make do with civil service rates if pay supplements them with private earning are prepared to take up parastatals appointment.

Private Considerations

The injection of race meant that principal directors and top functionaries of parastatals institution are appointed not because of eventuality to deliver effective result but simply for reason of repetism. This neglect the responsibility to the background, therefore undermining the hiring equation in the operation of public institution. The result is that the director of parastatals institution come co placement and inert.

Besides top operation labor force and board members, came bands of passage only to be charged or removed by consecutive governments therefore loosing the precious factor of durability in single and policy of operation.

Statement Of Problem

Privatization takes an living government asset or services, and replaces it with a private asset or service. We’re all apprehensive of the situation with black water and private military contractor. The common claim is that this will reduce costs of operation( making no claim as to whether this actually work or not- simply that’s the claim).

Commercialization is a different beast. When we talk about commercializing space, what we’re talking about is creating private client( druggies of spaceflight). This involves developing business plans, client checks, business practices, financing strategies all aimed at targeting a new request and new guests that aren’t only government grounded. This will be the astronaut taros, like Buzzle Aldrin. But they ’ll be joined by the private stoner. Like Richard Garriott.

Privatization involves the trade of power and control of means of an enterprise to the from government to the private sector. similar trade or transfer of equity power from government possessed enterprises perhaps to private individualities or commercial bodies, and in fact could take numerous forms.

This study thus hopes to answer the following questions

1. What’s the history of public enterprises in Nigeria?

2. What are the problems defying these enterprises?

3. Is there a need for privatization and commercialization?

4. What are the problems and prospects of privatization and commercialization?

5. What effect does privatization and commercialization have on the Nigeria frugality?

Objects Of The Study

The ideal of this study is to determine the effect of privatization and commercialization on the Nigerian frugality. still, the specific objects are;

1) To trace the history of public enterprises in Nigeria.

2) TO ascertain the problems defying these enterprise in Nigeria.

3) To estimate the need for privatization and commercialization.

4) To find out the problems and prospects of privatization and commercialization.

5) To estimate the effect of privatization and commercialization on the Nigeria frugality.

Compass Of The Study

This design work is intended to punctuate the problem of privatization and commercialization to expropriate the unborn prospect of public enterprises to be affected and its goods on the frugality of the country. Since privatization and commercialization has been popular formed as the neglected to the study shall also suggest yieldpre-requisites to a consecutive privatization and commercialization. During the course of the study, proper attention will be placed on people’s opinion and views regarding privatization and commercialization of public business enterprises through questionnaire formed.

Limitation Of The Study

This design won’t go beyond identification of problems defying public enterprises, the need for privatization and commercialization.

This design will also suggest the form of privatization and privatization to take unborn prospect of public enterprises after the system must come into operation. This design is also pressing the effect of privatization and commercialization of public business enterprises on the frugality of the country.