EFFECT OF PRIVATIZATION OF GOVERNMENT PARASTATALS ON NIGERIAN ECONOMY.
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EFFECT OF PRIVATIZATION OF GOVERNMENT PARASTATALS ON NIGERIAN ECONOMY.
CHAPTER ONE 1.1 INTRODUCTION
Privatisation is a relatively new term; it only became important in many countries’ politics and economies around a decade ago. It is described as the process of converting government-owned firms to private ownership by selling their shares to individuals who will operate the companies efficiently and successfully.
Originally, industrialised countries practiced privatisation as a political rather than economic approach.
The belief was that the private sector managed resources more effectively and efficiently. As a result, the government decides to sell public corporations to the private sector, which, with its profit-driven motive, was expected to do a better job of running those companies and thus contribute more to economic development. They believe that the government’s political position in power will strengthen and consolidate over time.
However, the economic side of privatisation has dominated the political aspect, and it is being implemented as a significant economic reform initiative.
1.2 Statement of the Problem
The Nigerian economy has been in decline since the 1980s, with large debts and an unprecedented high rate of unemployment and worker retrenchment, resulting in a significant reduction in capacity utilisation, shortages of essential raw materials, dwindling foreign exchange earnings, and a continuous rise in inflation. Against this backdrop, the statement of probes to be investigated must include:
1. Privatisation of government parastatals and its impact on the Nigerian economy
2. What are the benefits of privatisation? Will it benefit all citizens?
3. Will privatisation raise or lower the cost of utilities?
4. What is involved in the privatisation of a major utility? (9NEPA)
5. Will only the wealthy benefit from privatisation (e.g., by purchasing shares).
6. Will the government still be interested in the privatised companies?
7. Are we privatising to appease foreigners or not?
8. How much money would the government make from the privatisation?
9. How long will the privatisation programme last?
1.3 Statement of Research Question.
This will lead to researchable questions such as:
1. Would only the wealthy benefit from privatisation? For example, when it comes to purchasing stock.
2. Will privatisation raise the cost of utilities?
3. Why are we privatising utilities like NEPA and NITEL when they have already been commercialised?
4. What has been the experience with privatisation in other developing countries?
5. How much money would the government make through privatisation?
6. How long will the privatisation programme last?
1.4 The purpose of the study
The purpose of this study is to investigate the impact of the Nigerian economy as a whole. It aims to determine why the policy was adopted, how it is executed, and how the government intends to ensure its success and effectiveness. The two major sectors of the economy, the public and private sectors, their responses to policy, and the impact on both.
How the project or policy will be executed, as well as how to alleviate the current hardships in the country caused by inflation. Also, whether this approach of affluent nations can solve developing countries’ economic challenges.
1.5 Significance of the Study
This term paper will be important and valuable to research students in all fields, nations as a whole, and privatised organisations.
To the researcher, please supply me with insight into the federal government’s dream and decisions to sell away unprofitable cooperation, which gulps millions of the nation’s financial resources into private hands.
To the student, it can serve as a repository of information, a source of secondary data, and a foundation for future research on related topics.
To the nation as a whole, the policy is significant since it affects the populace and will provide Nigerians with a thorough understanding of the initiative, its implications, and the government’s desire to tackle this problem.
To the privatised organisation, the researcher will serve as a foundation for self-auditing of performance.
1.6 SCOPE AND LIMITATIONS OF THE STUDY
For the purposes of this study, the researcher will primarily serve and discuss policy implementation.
How it will involve practically every person of the Federation. The national council on privatisation will advertise how the shares will be awarded.
The timeline for the programme rules, as well as how the national council on privatisation will monitor the Bureau of Public Enterprise’s (BPE) implementation of the project.
1.7 LIMITATION.
The researcher encountered a few issues when working on this study term paper. These included time constraints, money constraints, and the availability of genuine resources.
The time constraint for completing and submitting the study was set because additional academic work needed to be done.
One of the study’s primary limitations is obtaining information from officers of various parastatals that is relevant to the completion of the term paper.
The final financial course Not the least of these constraints was money.
Resources were in short supply compared to their demand. Interviews have to be rescheduled numerous times for various reasons.
1.8 Definition of Terms
CAPITAL MARKET: The Nigerian stock exchange, where shares are bought and sold.
EQUITY: Ordinary share capital for an enterprise.
Commercialization involves
Changing the way government-owned firms function so that they run economically and profitably.
Privatisation refers to the process of
Change the ownership of government corporations (public enterprises) to private ownership by selling shares to individuals who will run the companies successfully and profitably.
INDIGENISATION: The process of transferring over.
enterprises from international investors to private Nigerian investors.
PRIVATE ENTERPRISE: The enterprise is owned or controlled by
shares) by a private firm.
PUBLIC ENTERPRISE: An enterprise owned or managed by
shares by the government.
QUOTED INVESTMENT: shares of a company listed on
The stock exchange
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