CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
In
the era of post colonialism, Nigeria has at one time or another, embarked upon
certain policies that have political economic implications. For instance, from
1960 to date, Nigeria has introduced indigenization and nationalization policy,
operation feed the Nation (OFN), Austerity measure, structural adjustment
programme (SAP), Deregulation of oil sector, Resource control Privatization and
commercialization of public enterprises to mention but a few. The critical
question here remains. How many of these policies have been able to restructure
the political economy of Nigeria to the tune of alleviating the yearnings and
aspirations of the working class.
The
world no doubt is moving towards capitalization and any nation that is not
moving towards this direction is seen as either not developing or even
retrogressing. A capitalist economy is a free market economy which allows most
economic decisions to be guided by the twin forces of demand and supply. Since
capitalization discourages monopoly but encourages competitive market, it
therefore enhances efficiency and high productivity which is very vital in any
developing country’s economy. In Nigeria, most government owned industries and
establishments remain citadels of corruption, studies in efficiency and
consequently a heavy drain on the economy. As a means of curbing this menace,
the Brettonwoods institutions (IMF & WORLD BANK) have advocated the twin
policies of privatization and commercialization. Incidentally, Nigeria has
fully adopted this policy and is embarking on it with frenzy
1.2 STATEMENT OF PROBLEMS
Privatization and
commercialization of public enterprises is a vital tool for the upliftment of a
country’s political economy, more especially the developing countries like
Nigeria. Regrettably, the problems facing this privatization and
commercialization program is numerous to include:
a.
Corruption
b.
Lack of transparency
c.
Lack of accountability
d.
Inconsistency and
e.
Incredibility.
However,
it is based on these problems that the basic propositions of this privatization
and commercialization program are being hindered. In trying to look into these
discrepancies and proffer a way forward towards a positive state of
privatization and commercialization of public enterprises in Nigeria, this
research work emanated.
1.3 OBJECTIVES OF THE STUDY
This paper will take a
general look on the evolution of public enterprises in Nigeria, after and the
rationale for its establishment. To assess the factors that led to the
privatization and commercialization of these public co-operations and its
origin. Thirdly, this work will also evaluate the various privatization and
commercialization programs embarked by the Nigerian government from 1988 to
2010. Finally, it is the objective of this research work to fish out those
problems that have obstructed the full propositions of privatization and
commercialization program as it concern its implementation and as well proffer
a way towards actualizing its objectives so as to foster political cum economic
growth and development of this highly endowed country Nigeria.
1.4 RESEARCH QUESTIONS
This work will tend to
ask some relevant questions like:-
1.
What caused the evolution of the public enterprises in Nigeria?
2.
What are the reasons why these public enterprises have to be sold despite the
rationales for its establishment?
3.
Can these corporations function well under the care of the state rather than
being privatized whether wholly or partly?
4.
How far has this privatized enterprises gone in boosting efficiency and high
productivity to benefiting Nigerians as a whole whether poor or rich, higher
place or less privileged?
5.
Who are the main beneficiaries of the privatization and commercialization
program?
1.5 HYPOTHESIS
a)
Corruption is the cause of the poor performance of the public corporations
b)
Good and transparent governance is the key to an efficient public enterprise
c)
A well implemented privatization and commercialization programs boosts
political economy of a country.
d)
Politicization of privatization and commercialization of public enterprises
will lead to theses enterprise inefficiency when sold out.
1.6 SCOPE OF THE STUDY AND LIMITATION OF STUDY
The scope of this
research work focused strictly on those privatization and commercialization
programs that have been embarked upon by Nigerian government from 1988 to 2010.
This work will lead us to the evolution of public enterprises in Nigeria and
also examine why they later turned out to be sold or privatized, partly or
wholly. Finally, to analyze how politics been played by past administrations
since 1988 towards this programme have ridicules this whole exercise.
1.7 LIMITATIONS
O F THE STUDY
On the course of this
research, the following problems were encountered, like short time frame.
Financing problem, scarcity of information or data, etc. this is due to mainly,
the wide scope of this study which emphasizes on a complex institution like
Nigeria. The longer duration of the subject matter to study, which dates from
1988 to 2010 concerning privatization and commercialization program of public
enterprises in Nigeria, also contributed. Now, the implication is that the
short time frame mapped out for this research work posed a problem of assessing
these programs as whole, but that doesn’t threat the authentication and quality
of this work.
Again, enough financing
of the accomplishment of this work became a problem in the sense that gathering
information was costly, the researcher needed enough money to gather them.
1.8
SIGNIFICANCE OF THE STUDY
This research work will
help the government and readers to understand those benefits that privatization
and commercialization programme embodies which we have neglected and
politicized with in the past. In understanding this on the side of the
government, it will allow them to rethink and work towards real implementation
of it thereby creating a room for the rapid growth and development of this
country. At the other hand, it will go a long way to create an avenue for more
academic research.
Haven known this, it is
worthy to conclude that the main beneficiaries of this study lies on the
government and other readers respectively.
1.9 DEFINITION
OF TERMS
Public Corporations:
Public corporation or enterprise as defined by Adamolekun (1983), are
organizations that emerged as a result of government acting in the capacity of
an entrepreneur. They can be seen as those corporations or enterprise built,
owned and managed by the government. They are being financed with public fund,
especially through taxation and also operate on monopoly.
PRIVATIZATION: Privatization can be
defined as the transfer of ownership and control of enterprises from the state
to the private sector. Iheme, (1997) defines privatization as any of a variety
of measurers adopted by government to expose a public enterprise to competition
or to bring in private ownership or control or management into a public
enterprises and accordingly to reduce the usual weight of public ownership or
control or management.
Commercialization: Commercialization is
act of making government owned enterprises profit oriented. Commercialization
can be full or partial according to the Bureau of public enterprises Act of
1993. In both full and partial commercialization, no divestment of the federal
Governments shareholding will be involved and subject to the general regulatory
powers of the federal Government.
Capitalism: Capitalism means the economic
system in which property is privately owned and goods are privately produced.
It is some times referred to as the private enterprise system. It is the
private ownership of the business of a society with the freedom of private
owners to use, buy and sell their property or services on the market at
voluntarily agreed prices and terns, with only minimal interference with such
transactions by the state or other authoritative third parties.