CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
There is no doubt that privation came in the hesitation of the policy of librization and the advancing for market based reform.. It has also become an important component Globalization. Privatization has since been endorsed by multi lateral financial institution as a major plank of adjustment policies , which are being , implemented in a number of developing country including Nigeria of course in development literature privatization as become the linchpin (things that is most important part of an organization ) economic liberalism. The advocate of privatization believe that it is very effective stage for improving operational efficiency, broaden share ownership ;, attracting foreign investment and reducing the role of the state in these areas where the private sector process the capacity to operate more efficiently and more productivity . (Jerome, 1999; 2) Several countries in the developed and developing world are increasing privatizing state owned enterprises. (SOES) indeed, between 1988 and 1994, developing country sold about 3300 state owned enterprises. The rush towards privatization in developing country most especially, has been attributed to the poor performance of publicly owned enterprises which has been largely managed by the staff. In the 70s, state enterprises where prominent in the extractive industries, utilities and infrastructure such as electricity railway, telecommunication etc.
In Nigeria unfortunately this enterprises become money guzzling outfit, rely on regular subsidies from government and survived only on the monopoly status they enjoyed. Many of them were over staffed and were bally managed All of this deficiency necessitated a rethinking on the roll and structure of publicly owned or state owned enterprises like NEPA. The introduction of SAP in 1986 set the tone for the process of privatization of public enterprises in Nigeria. In spite of the foregoing justification for privatization, it is important to point out ;that the private s sector in Nigeria as depended largely on the state for; its survival studies have showed that in terms of investment of productivity activities. The private sector in Nigeria has hardly fared better than the government. The privatize sector according to Obadan has not been able to respond adequately to the country desire for increased production an employment and stable prices (Obadan, 1998 :89) It is a sad commentary on the state of the private sector that real investment and production have taken a back seat while service sector activities, speculative activities, distributive trade and foreign exchange deals remain the main focus of private sector. the private sector depends almost exclusively on government patronage and manipulation of government policies for survival. For a country to rely on such a private sector for its economic rejuvenation will amount to economic suicide.
An effective privatization programmed requires the existence of a single private sector, productivity oriented bourgeoisie and not a collection of compradors, speculators, and dealers in foreign currencies that dominate the private sector in Nigeria. The character of the Nigeria private sector and the imperfections that characterize the Nigerian business environment constitute the Achilles heel of the Nigerian privatization exercise. In sample terms: privatization may be defined as the “transfer of ownership and control tights over firms from the public to the private firms from the public to the private sectors”(Jerome,1999). Privatization is however much more complex in practice than is in theory. In embanking on privatization, government ought to critically examine the specific cities of their situations in order to avoid situations where privatization becomes counter productive.