CHAPTER ONE
1.1 BACKGROUND
OF THE STUDY
To be able to transform into an
industrialized economy an underdeveloped economy has to privately and commercially
develop.
The importance of establishing public
enterprises or corporations 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 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 not been successful because
government owned industries and establishments remain citadels of corruption,
studies in
inefficiency and consequently a heavy
drain on the economy. As a means of combating this menace, the (IMF)
international monetary fund and World Bank have advocated the twin policies of
privatization and commercialization. Incidentally, Nigerian has fully adopted
this policy and is embarking on it with freazy, for example, Nigeria Brewery
change from the most inefficient and less making company before privatization
to one of the most profitable businesses in Nigeria. Nigeria has more than
1,800 public enterprises at federal and state level which can be categorized as
follows:
(1)Strategic industries such as
petroleum and petrochemical, fertilizer plant, ion steel.
Public
utility providing infrastructural services.
Economic/commercial enterprises such
as manufacturing of consumer goods, insurance, bank and hatotoic .
And Department / stationary boards
designed to serve specific social or development roles as university and
research institutes (Ake 1981). The major purpose and reason for the
introduction of the privatization and commercialization programs in the country
was a result of the failure of public enterprise in
the economy the need to reduce
dependency of public enterprise on government/public purse and the urge to
increase efficiency in public enterprise whose inefficiency was causing the
governmental considerable embarrassment are shown.
The purpose of improving national
economic is to improve the quality of the life the people and not to create
easy avenues for foreign exploitation. Nigeria believes fully in international
trade and relations provided they make life of Nigerians better. Mainly IMF and
world bank prescriptions have been fully tries Nigeria in SAP (structural adjustment
program)in the last two decades but, they have made Nigeria much Poorer and
miserable. No nation surrenders the bastions of its economy to foreigners
without adequate control except in colonial rule. If government wants
deregulation it must be in accordance with the deregulation as emaciated by the
ordinary people, private sector, while the public is expected to create right
environment for growth and set the policy frame works.
1.2
STATEMENT OF PROBLEM:
In a developing country like Nigeria,
privatization and commercialization of public enterprise 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:
Lack of accountability
Corruption Lack of transparency Inconsistency
It is important to note that the
major function that inform the establishment of these public enterprises are to
control the resources and raise funds for the provision of certain
infrastructural facilities particularly in services acquiring heavy financial
investment e.g. railway, electricity, telecommunication etc, also generating
revenue that will add to financial development program and projects as variable
instrument for the creation of jobs, and ultimately facilitate economic growth
and development.
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