PRIVATISATION AS A MEANS OF SOLVING NIGERIAN ECONOMIC PROBLEMS
CHAPTER ONE
INTRODUCTION
From the colonial days through the period of our independence, to the early 80s, public enterprises thrived in its functions. The government established these enterprises in the country for some reasons including government intentions to retain control on behalf of the citizens, and the commanding heights of the economy as epitomized by its investments in energy, communication, and other important sections.
It also wished to stand market failures, engender regional development, enhance job creation capacities as well as social services delivery. Unfortunately, as years progressed the objective of government in establishing these public enterprises where to come to nothing as the enterprises were riddle with corruption,
mismanagement, over-dependences on the treasury for funding, poor service accountant by the arrogance and arrogance and insensitivity of the managers of these enterprises as well as inequities brought about by nepotism (El-Rafai, 2000).
These public enterprises began to perform below the expectation of the reason for its establishment, such enterprises as Nigeria Air Ways Nigeria Railway Corporation (NRC), Nigeria Coal Corporation (NCC) the National Electric Power Authority (NEPA), gradually witnessed, obsolete facilities, corruption, mismanagement, resulting in poor service delivery huge debt of salaries and wages pension and so on.
In an effort to put state enterprises back to its former glory, government committed billions of naira to rehabilitate them which resulted in fruitless effort was most of them today has collapsed. As a result of government huge financial investment in these arriving industries, it has failed in fulfilling it primary objectives, which is the provision of infrastructure and security through the maintenances of law and orders as well as promotion of enabling and conducive economic environment.
Against this back background, it became a national policy imperative to disengage government from wasteful investment by taking public sector away from these areas where the private sector has the comparative advantage to perform, while letting the state concern to thrive through enhanced wealth creation. To achieve these purpose the federal government started a process of privatization and commercialization since 1988.
The program would ensure the inflow of investment, management and technology that would improve and grow the nation is infrastructure services and industries for the benefit of the people. Privatization involves transfer of ownership of enterprises between the government and the private sector.
This implies that the predominant share in ownership of assures on transfer lies with private shareholders. Mostly, developed countries of the world, such as Britain, United State of American (U.S.A) with sound economic base has their economic growth hinged on private sector through privatization.
Britain has about 90% of their economy in the private sector. The same is USA which is believed to have the world most privatized economy. Therefore, for Nigeria to integrate its economy into the main stream of world economic order, it must embark on privatization.
Dues to the misconceptions, conflicts and debates generated by privatization in Nigeria, to writer was moved to embark on this project entitled. Privatization – as a means of sowing Nigeria Economic problems (with NEPA as a case study) this is with a view to highlighting its need for our economic growth.
1.1 PROBLEMS OF THE STUDY
In Nigeria public sector has been riddle with corruption, mismanagement, inefficiency, poor service delivery, lack of up to date technology, indolent staff, lack of maintenance. The National Electric Power Authority (NEPA) as one of the public enterprise has been bedeviled with these shortcomings.
The Epileptic power supply, manor and resources wasted by the electric users as a result of lack of power supply has been a source of worry to enable citizen of the matter.
How could power supply be improved?
What would eliminate corruption on the part of NEPA personnel’s?
How could the over dependent of this sector treasury be eliminated?
What would ensure completion efficiency, improved service delivery and up to date equipment?
How could regular power supply be ensured?
What would bring to an end?
1.2 OBJECTIVES OF THE STUDY
The objective of this study include.
1. To find out why public enterprises has failed in performance when compared to private enterprise.
2. To correct the misconceptions on privatization of public enterprise.
3. To re-orientate the kinds of the people on how privatization could reduce, corruption, mismanagement, inefficiency and improve technology.
4. To identify hindrances to privatization.
5. To highlight the advantages of privatization to Nigeria economy.
6. To recommend how a successful handing over of public enterprises to private sector could be achieved.
7. To present a platform for researchers and knowledge seekers on privatization.
1.3 SIGNIFICANT OF THE STUDY
This study is very important now the government is seriously committed to the privatization programmed. By this study, people would see reason to give their support to the privatization process, more so, by having a successful privatization of major public enterprises such National Electric Power Authority (NEPA).
It would broaden Nigeria capital market and created large body of shareholders. In the process of privatization, more investible capital will be injected into the various economics through local and foreign investors to the benefit of the country at large.
Also, funds that would have been committed to maintenance of otherwise inefficient enterprises have been freed into more productive sectors of the economy.
1.4 STATEMENT OF HYPOTHESIS
The following are the hypothesis of the study
HYPOTHESIS 1H0: Privatization is not a genuine and programmatic approach to revitalization of Nigeria economy.
H1: Privatization is a genuine and programmatic approach to revitalization of Nigeria economy.
HYPOTHESIS 2H0: Privatization has not lead to the financial independence of a company.H1: Privatization has lead to the financial independence of a company.
HYPOTHESIS 3H0: Privatization of NEPA has not improved productivity, efficiency, management and adequate utilization of the resources of the organization.
H1: Privatization of NEPA has improved productivity, efficiency, management and adequate utilization of the resources of the organization.
1.5 SCOPE OF THE STUDY
The scope of the study is to examine the general principles of privatization and how it could help to improve Nigerian economy. It does not cover the technical implantation of privatization program. The area of coverage is NEPA Enugu District.
1.6 LIMITATION OF THE STUDY
In the course of the study, the researcher encounters some difficulties, which constitute some limitations to the study. These includes:
i. Time: Due to short period needed to complete the project from the time of its approval, the researcher could not do a through work as intended.
ii. Finance: The money required by the researcher for transportation to various place required, gathering of literal material and for type setting and well as binding in short supply.
Data collection/literal materials. Reference materials needy for the study was not easy to come by as most of the document were mostly classified document.
Some of the respondents were not willing to co-operate with the researcher during the time of data collection. It was not easy to interview the district manager and the chief accounts of NEPA Enugu District. Nevertheless, despite the above limitations, the researcher tried to lift her head above the obstacles and did a good work within the time and resources available to her.
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1.7 DEFINITION OF TERMS
Some definition of terms as used in the study were as below.
a. Authority: It means power or right to give order and make others to be obeyed.
b. Commercialization: This is concerned with the reform of public enterprise to achieve high efficiency and productivity, without change of ownership.
c. Electric: This means all the phenomena associated with electrons (negative charged) and proteins (positive charge, the study of these phenomena).
d. Privatization: This means transfer of ownership of enterprise between the government and the private sector.
e. Problem: This stands for questions to be solved or decided.
f. Public: The citizens of people of a country.
g. Public enterprises: This means any corporation, board, company or parastatal established by or under any enactment in which the government federation has ownership or equity interest.
h. Strategic investor: It means a reputable core investor or group of investors having the requisite technical expertise, the managerial experience and financial capacity to effectively contribute to the management of the enterprises be privatized.
PRIVATISATION AS A MEANS OF SOLVING NIGERIAN ECONOMIC PROBLEMS
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