The initial groundwork and clarification of objectives recommended herein should enable. Problems and prospects of privatization in nigeria is topical not because its leaders are playing politics with privatization and the process has become a never ending one, but because the policy was a good one which was intended to cut waste of scarce resources, bring good governance closer to the people and lessen the economic hardships of citizens. The study is inspired to a large extent by a desire to appraise the impact of privatization policy on the economy and hence will be of great assistance to the user of the nigerian organizations who are in need of what privatization policy in nigeria entails in relation to the statutory role of the economy. Primarily, it is the process of transferring ownership of a business, enterprise, agency, public service or public property from the. After colonial rule, the government has actively privatized most of the government owned companies by either sale of share below 51% or by selling its assets. The reasons behind privatizations decision and the steps and methods which are. Nigerian economy and privatization of public enterprises victor i. This paper a critical assessment of port privatization policy and port productivity in nigerian maritime industry highlights the role of seaports in the socioeconomic development of nigeria. A citigroup economist exulted, water as an asset class will, in my view, become. The desire to transfer risk from the public sector to the private sector can lead to privatization.
It has received so much criticism from labour, academia and individuals. Privatization in nigeria was formally introduced by the privatization and commercialization act of 1988, which later set up the technical committee on privatization and commercialization tcpc chaired by dr. Privatization must result in better service delivery at lower prices as desired by consumers. Cost reduction is one motivation for privatization. Managing the challenges of public enterprises in nigeria and the privatization option okeke. Abstract the research work titled, the effects of privatization on public enterprises in nigeria, has revealed that over two decades old privatization of public enterprises in nigeria since 1988 had significant positive effects on the economy and the polity in the first place. Privatization, which is an integral part of an extensive public sector reform policy.
Pdf the impact of privatization and commercialization in. The reasons offered for this economic policy vary from country to country. This allows for more immediate and efficient corrupt transfer of value not. The impact of privatization and commercialization on nigerian economy includes abstract and chapter one, complete project material available the impact of privatization and commercialization on nigerian economy 19852010 abstract the ultimate goal of any credible and legitimate government is to ensure sustained improvement in the standard of living of the citizenry. Why nigerias power privatisation hasnt achieved full objective bpe boss. It is also sometimes used as a synonym for deregulation when a heavily regulated private company or industry becomes less regulated. Bureau of public enterprises, annual reports for 2000. Critically examine the arguments for and against privatisation in developing countries. They argue that privatization is antilabour and will always lead to unemployment. The fourth section will introduce and discuss the results of my own empirical study. Hamza zayyad with a mandate to privatize 111 public enterprises and commercialize 34 others. Reasons for privatization and commercialization in nigeria.
Privatization and commercialization in nigeria will be a mirage unless institutional reforms take place. The argument as to the reasons why governments exist that associates it with the formulation and. Rationale for privatization in the public interest. Hanson 1972 reflecting on turkey, mexico, india and. History examples, and issues page executive summary i i. Appraise the privatization efforts in nigeria, by examining the antecedent, pattern, volume and status of privatization undertaken so far. Reasons for privatization and commercialization in nigeria government participation in business enterprises in most colonial african and the predominance of stateowned enterprises reflected a desire to control the economy after wrestling political control from the colonialists. In africa, it has remained highly controversial as well as confusing. In this article, we shall define economy and privatization and then list the methods of privatization, give a brief history of privatization in nigeria, offer reasons why successive governments embarked on the privatization of public enterprises, discover whether the problems outweighed the benefits, discuss the present outlook, share success stories and then roundoff. Overall, the literature now reflects a more cautious and nuanced evaluation of privatization. Among the most emblematic policies promoting the role of the private sector in education are charter schools, voucher schemes, or the contracting of private schools. Virtually all the studies focused on the reasons and.
The main reason for this gap, perhaps, could be that privatisation is a new phenomenon. Evaluate technical efficiency in these enterprises before and after privatization. Privatization could be traced to the emergence of public enterprises in the colonial era. The immediate causes of privatization policy could. Government functions and services may also be privatized. Nigeria, has revealed that over two decades old privatization of public enterprises in nigeria since 1988 had significant positive effects on the economy and the polity in the first place. Much of the impetus is the desire to inject competition into the delivery of state services in order to provide services to citizens in a. Therefore, if you work for a governmentrun industry, managers do not usually share in profits. Government functions and services may also be privatised which may also be known as franchising or out. Pdf the impact of privatization of power sector in. In addition, privatization of public enterprises is being pursued with scant regard to the laws of the country. The principle for privatization in nigeria commenced in 1999 with the aim to diversify totally or. The rationale for this, much like the rationale for the wave of privatization.
Introduction privatization has its roots in the 1980s, especially in european market where the governments were facing budgetary constraints, therefore they introduced privatization by selling socially owned enterprises or public assets to the private sector. This paper, therefore, examines the reasons for establishing public enterprises, the. Reasons for privatization in nigeria nigerian facts. Critical issues capital intensive in terms of human, financial and material resources. The privatization process in nigeria is a fragment abuse of this provision of the constitution. Pdf privatization and enterprise performance in nigeria. Advantages and disadvantages of privatization the merits and drawbacks of privatization have been subjects of considerable debate among businesspeople, city leaders, and public employees alike. Full privatization is distinguishable from partial privatization and joint venture arrangements between public and private where the public sector maintains a significant interest. They argue that privatization is a neoliberal approach to development, which is imposed by the brettons woods institution as part of globalization that can only favour rich countries and individuals. The privatization of education education international. Privatization and enterprise performance in nigeria. Many reasons explain the movement by cities and states toward privatization to restructure and rightsize government. Nigeria is one of the fastest growing telecommunications market in the world. In the decree, forty five 45 were slated for partial privatization, twenty five 25 for partial commercialization.
The paper concludes that although many of the challenges facing privatized public enterprises in nigeria have been drastically reduced in the post privatization era much still needs to be done in ensuring that. Generally, they appraise privatization objectives and. The concept of privatization in nigeria library gurus. The effect of privatization on economic growth of nigeria. Advantages of privatization privatization opportunities. Having examined some key economic variables, the paper further argues that the privatization process has not resulted in any significant improvement in the.
This can be achieved through direct sale of the assets to the private sector. The basic reason for establishing public enterprises in all economies has been to propel development. A critical assessment of port privatization policy and. The main argument in favour of privatization in nigeria is that private companies have a profit motive to cut expenses and be more effective. Reasons for privatization there are numerous reasons why governments turn to privatization. Full divestiture privatization public private partnership. Problems and prospects of privatization in nigeria. Department of banking and finance, faculty of management sciences university of calabar, calabar, cross river state, nigeria email. Ake 1981 enumerates five reasons why public enterprises came into existence in nigeria and the rest of africa. Corruption or principalagent issues during the privatization process however can result in significant underpricing of the asset.
Privatization and commercialization of nigerian national. Dec 29, 2018 the concept of privatization in nigeria. The first formal privatization programme of the federal government of nigeria is dated back to 1988, under the technical committee on privatization and commercialization tcpc and it was backed by decree no 25 of july, 1988. The impact of privatization and commercialization on nigerian economy includes abstract and chapter one, complete project material available the impact of privatization and commercialization on nigerian economy 19852010 abstract the ultimate goal of any credible and legitimate government is to ensure sustained improvement in the standard of living of the. Privatization or privatisation in british english can mean different things including moving something from the public sector into the private sector. It is because of social issues like economic inequalities, unemployment that made the state to interfere in economy of nigeria. The proponents of privatization perceives privatization as a means through which wealth could be created by allowing private sector to manage the. Arguments for and against privatisation in developing countries.
For greater analysis and examples of privatization in infrastructure, go to world bank resources on impact of infrastructure. Commercialization and privatization policy in nigeria. Consequently, because of one reason or the other, nigeria has embraced restructuring and privatization as one of the economic policies of revitalizing the economy. Privatization of government owned entities is one of the objectives of the nigerias telecommunications policy. Privatisation has become an integral part of procompetition programme and has now become a familiar feature of new consensus economic policy. Evaluation of privatization policy in nigeria 1999 2004. The reasons for privatization are well established and are not covered in any great detail here.
Most of the government corporations are influenced by the politics both in terms of management, resource allocation and also on employment. Privatisation or privatization in american english can mean different things including moving something from the public sector into the private sector. Privatizationthe process of transferring control and ownership. Privatisation in nigeria has not been a popular and an accepted reform. Using the political economy approach, it argues that the privatization of the power sector in nigeria is based on capitalist values, ideology, orientation and assumption. It is defined as the transfer of state owned resources to private control.
The impact of privatization on the nigerian economy projectclue. As iheme 1997 has argued privatization is a means of ensuring efficient management of the economy through the involvement and domination of the private. For instance, attempts were made to privatize nepa when the law that sets it up prohibits private ownership of electric company in nigeria. I department of business administration, chukwuemeka odumegwu ojukwu university igbariam campus, anambra state, nigeria abstract one of the motivating factors for establishing public enterprises in nigeria is to. In nigeria, as part of its programmes of national economic reforms, the federal government introduced privatisation along with commercialisation. Privatization issues this section addresses the issues, and the decisions which governments themselves must make prior to embarking upon a privatization process. Privatization turns essential human needs into products. Developing countries have used privatization as a tool to. The primary goal of the privatization in nigeria is to reduce the dominance of the public sector in.
It argues that the privatization process in nigeria as in other developing countries represents among other characteristics a new phase in the export of capital from the advanced countries. Indeed, each element of privatizationfrom its apparent costsaving properties to its possible negative impact on. Bureau of public enterprises, annual reports for 2000 2004, kaduna. When closely examined, most arguments against privatization in nigeria like in many developing countries reveal that not to privatize is the worse option. Privatization has several benefits such as reduced government bureaucracy, reduced state monopolies and financial structures, increased competitiveness, increase in quality of goods and services reduce corruption and control by government, increase staff quality and supervision, improve market analysis, free up government funds for more pressing problems, create employment, reinvigorate the. Public enterprises privatisation and commercialisation act arrangement of sections part i privatisation and commercialisation of public enterprises section 1. The desire to involve the private sector in the management and provision of port infrastructure and services is. Privatization is the transfer of a company or organization from government to private ownership and control. Megginson william m och netter jeffry m from state to market.
It has been claimed as one of the reasons for privatization that as at 1986 the federal government had invested 36 billion as equity, loans and subventions in public. The objective of the, study, among others, is to evaluate the current privatization programme and it covers the period, 1999 2004. However, in a narrower sense, privatization refers to a transfer of state activities into the private sector by sale full or partialof ongoing concerns or by sale of assets following liquidation. Education in nigeria today is a very big industry nwadiani, 2000. The government should create an environment favorable for private economic activity. This paper discuses the impact of privatization of power sector in nigeria. Privatization, also spelt privatization in british english, has several meanings. Nigeria has equally adopted a programme of reform for state enterprises. Most of the major players continue to experience the growth from exploiting the opportunities presented by the large untapped nigerian market ulrich. Privatisation which connotes a reversal of state ownership of enterprises has many different forms. Pdf the impact of privatization of power sector in nigeria. The issue of privatisation has been a subject of intense global debate in recent years.
Privatisation, as an economic reform policy, reduces. Privatization in nigeria, social welfare, and the obligation of social. Much of the impetus is the desire to inject competition into the delivery of state services in order to provide services to citizens in a moreefficient and costeffective manner. In the final section of the paper i will attempt to draw useful conclusions regarding privatization as an economic growth policy. The first goal is to measure performance quantitatively to the extent possible with available data. Examine the financial and operating performance of three newly privatized enterprises in nigeria. In support of this, psacharopoulos 1985 asserted that, human capital is created and quality of human. The reasons raised for privatization are as follows. 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.
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