AN EVALUATION OF FINANCIAL PROBLEMS AND PROSPECTS OF PRIVATIZATION IN THE NIGERIA ECONOMY
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AN EVALUATION OF FINANCIAL PROBLEMS AND PROSPECTS OF PRIVATIZATION IN THE NIGERIA ECONOMY
ABSTRACT
This article is intended to investigate the financial issues and prospects of privatisation in Nigeria, using Nigeria Breweries Plc as a case study.
In chapter one, the work so outlines the study’s background, importance, and objectives. Which chapter two looks at literary concerns and tries to illustrate the concepts and beginnings of privatisation in Nigeria?
The third chapter describes the research concept and methods, as well as the study’s area, population, sample size determination, and data locations.
The research sample and questionnaires were chosen using random sampling. Data was gathered from both primary and secondary sources.
The primary sources are from the administration of the questionnaire, while the secondary sources are from textbooks, educational publications, and magazines. Tables and percentages are utilised to present the data, and figures are also used in the analysis.
The chi-square test was used to test the hypothesis at an adequate significance level and degree of freedom. The standard deviation was also employed.
The following conclusions were drawn from the data examined in Chapter 4: Lack of funds for share/purchase is a difficulty for successful privatisation in Nigeria; consequently, no other financial problems can be mentioned as a viable option for Nigeria’s progress and development.
Finally, the research work includes recommendations and conditions for future research.
INTRODUCTION:
1.1 BACKGROUND OF THE STUDY
The first phase of the privatisation initiative was believed to benefit many Nigerians who were given the opportunity to purchase shares offered for sale through a public offer. Share subscriptions during phase one were largely successful, with many public offerings.
However, due to the terrible economic realities of the time, many Nigerian residents were unable to save the few thousand naira required to purchase a modest share ownership in the firms offered for sale during the privatisation project.
Recently, the federal government proposed a method for low-income earners and rural residents to engage in the ongoing privatisation process. Banks have been directed to make loans without security for the purchase of up to N10,000 worth of shares every five years.
This is accomplished through the privatisation share purchase loan scheme (PSPLS), which requires that one register and then apply for share purchase and repayment by division, cash, conversion of bonuses and rights, and sale of all or a portion of their allotments in the secondary market.
This new development in the privatisation process encouraged me to do a project research on the topic “The problems and prospects of privatisation in Nigeria” using Nigeria Breweries Plc as a case study.
In this regard, I believe that by the end of the book, the reader will be inspired to engage in the ongoing privatisation effort.
1.2 STATEMENT OF THE PROBLEM
The purpose of this research is to determine the financial issues and prospects of privatisation in Nigeria, utilising Nigeria Breweries Plc as a case study.
Nigeria Breweries Plc, which began operations in pre-colonial times with limited public shareholding, is now one of the public limited corporations slated for privatisation in the country by the federal government under the Commercialization and Privatisation Act.
To make the plan a reality, it was discovered that finance is a significant barrier to the successful implementation of privatisation in many developing countries, particularly Nigeria;
thus, the federal government issued directives to banks to grant loans without stringent conditions for the purchase of shares worth up to N10,000.
1.3 OBJECTIVES OF THE STUDY
The following goals are intended to be met by the research work:
To determine whether a lack of finances for the acquisition of shares is a barrier to successful privatisation.
To ascertain whether there is a constraint in the privatisation of government firms in Nigeria.
To determine whether there are any other financial issues in the ongoing privatisation programme.
To determine if privatisation of government enterprises is a viable development strategy in Nigeria.
To examine whether privatisation will aid the country’s economic progress.
To give recommendations based on the findings of the investigation.
1.4 RESEARCH QUESTIONS
Is a shortage of capital for share acquisition a barrier to successful privatisation?
Is there a liquidity problem with Nigeria’s privatisation of government enterprises?
Are there any additional financial issues with the ongoing privatisation programme?
Is privatisation of government enterprises a viable development strategy in Nigeria? Will privatisation contribute to the country’s economic growth?
1.5 RESEARCH HYPOTHESES
Ho: Obtaining funds for the acquisition of shares is not a barrier to successful privatisation.
Hi: The lack of funds for the acquisition of shares is a barrier to successful privatisation.
Ho: The country’s widespread illiteracy does not pose a challenge for effective privatisation.
Hi: The country’s widespread illiteracy poses a challenge to the country’s privatisation efforts.
Ho: The availability of statistical data is not an issue for a successful privatisation programme.
Hi: A lack of statistical data is a barrier to the successful implementation of a privatisation strategy.
1.6 SIGNIFICANCE OF THE STUDY
The study is significant because it tends to raise privatisation awareness, particularly among the firms designated for privatisation during the phase. Educate Nigerians on how to participate in the privatisation programme.
Inform Nigerians on the advantages of privatisation. Encourage them to purchase stock in enterprises slated for privatisation. Show how privatisation would help improve the country’s economic status and minimise enterprises‘ reliance on national treasury, as well as promote share ownership in companies rather than foreign ownership.
Assist people who would utilise the study project as a reference resource on privatisation concerns in Nigeria, such as students, government functionaries, and parties interested in privatisations in Nigeria. Encourage readers and other interested parties to participate actively.
1.8 DEFINITIONS OF TERMS
Certain terms will be utilised throughout this work, and it is necessary to comprehend these words. They are as follows:
1. Commercialization:
Privatisation refers to the acquisition or takeover of previously government-owned corporate businesses by private individuals or groups. It entails the transfer of previously governmental firms to private persons or entities.
Commercialization is the second step.
Commercialization is an economic idea that requires government-owned businesses to pay their way. That is, they must cover their production costs with the revenue generated after sales.
3. Nationalisation:
Nationalisation refers to the government taking over or acquiring previously privately owned corporate companies for ownership and control.
4. Participation:
Shares denote an equitable portion of the privatised companies. It is a financial interest that one has in comparing.
5. Organisations:
A firm or enterprise that has been designated for privatisation.
6. Financial Difficulties:
Financial concerns refer to monetary difficulties faced throughout the privatisation process, which may jeopardise the success of the privatisation initiative. These may include a shortage of funds to purchase shares, mishandling of funds, share prices, and so on.
Seventh, finance:
Finance is money, capital, or revenue available for privatisation. The challenges of money in privatisation affect both the government and the parties involved in the privatisation process.
8. Loan:
This is a source of money that entails borrowing from banks in order to purchase shares in privatised companies.
9. Availability of liquid assets:
This is a monetary measure of an organization’s ability to meet its financial obligations.
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