ASSESSMENT OF PRIVATIZATION POLICY OF PUBLIC COMPANIES IN NIGERIA
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ASSESSMENT OF PRIVATIZATION POLICY OF PUBLIC COMPANIES IN NIGERIA
ABSTRACT
This article contends that government-owned firms in Nigeria have become a burden to the government.
They rely primarily on the government for subsidies or grants, with privatisation being one of the SAP instruments used to promote economic efficiency in Nigeria.
The study’s goal is to discover why government-owned enterprises and parastatals that were founded on commercial principles not only get large subsidies from the body that established them, but also perform poorly compared to their private sector peers.
The research relies on both primary and secondary data. The data is collected through questionnaires, journals, newspapers, and books. Chi-square is a statistical method for testing hypotheses.
The researcher believes that the findings and recommendations will be of great assistance to government-owned firms, which make up the vast majority of the public sector of the economy.
The research investigation produced various interconnected findings that were disclosed through the analysis of data randomly sent to both public and private organisations in Enugu state.
This research suggests that there should be methods for debt equity swaps. This will bring both managerial skills and new capital facilities. Foreign investors should be encouraged to invest in Nigeria once the government has created a favourable investment environment for them to operate in. Finally, the appeal of technical and administrative expertise that may be available in our country.
If all of these goals are met, Nigeria will move forward with its economic development.
Chapter one
INTRODUCTION
1.1 Background of the Study
Nigeria is one of the developing countries classified as third-world countries. The concerned nationalists believed that entrusting the duty of national development to private individuals would be extremely harmful and impractical in terms of independence.
For this purpose, the government formed government-owned enterprises and parastatals to assist it in planning, guiding, regulating, directing, and controlling the economy and the pace of national development.
However, in contrast to the government’s high expectations, the total cost of establishing those enterprises has not been very impressive.
Those corporations have a lot of demoralising repercussions, such as being unable to account for capitals invested in the firm, providing low-quality services, job insecurity for workers, and so on.
The most serious issue is their incapacity to account for government funds. Several of them stand out, including the Nigerian Coat Corporation, Nigeria Airways, Nigerian Telecommunications (NITEL), National Fertiliser Company (NAFCON), Nigerian National Petroleum Corporation (NNPC), and the National Electric Power Authority.
Among all of these parastatals, the services of the hast establishment (NEPA) have been painful to consumers to the point where they no longer expect power to be available at all times.
These are common examples mentioned by individuals who argue that privatising government-owned firms would address the inefficiencies identified.
The government’s anxiety about the poor performance of its enterprises and parastatals became a major element, and as the second wave of oil guides hit the world, Nigeria’s oil began to have dangerous consequences.
In 1981, President Alhaji Shehu Shagari appointed another commission on parastatals to investigate their operating issues and offer solutions to enable them provide the effective services for which they were established. The commission proposed that commercially oriented parastatals be solved in order to be subject to their discipline.
It observed that many of the problems that appear to be internal to parastatals are disconnected from the realities of the socio-social and socio-political environment in which they operate
And that proposing only internal reforms or obtaining parastatals to meet public expectations is simply to ignore significant roles expected. To interpret this, the commission recommended privatisation of some government-owned enterprises.
It was clear that the difficulties of government-owned firms and how to address them had taken centre stage in the country’s efforts to revitalise the economy. He was deposed rather quickly.
Muhumedu Buhari, the former first head of state from 1984 to 1985, established a study group on statutory corporations and parastatals to examine the financing, profitability, and performance of state undertakings.
Ali-Al-Makin (previously managing director and chief executive of Bank of the North Plc) leads the group. As the leader, this group was charged with identifying the major problems of these enterprises as vague and conflicting objectives inadequate autonomy,
inflexibility in decision making process, inappropriate capital structure, under-utilization of assets, absence of good credit control system and inability to collect debts, lack of adequate cost control measures, ineffective and inefficient management on formation and accounting system, absence of fina
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