IMPACT OF PRIVATIZATION IN NIGERIA CAPITAL MARKET A CASE STUDY OF NIGERIA STOCK EXCHANGE. A RESEARCH PROJECT MATERIAL ON BANKING AND FINANCE
ABSTRACT
The enthusiasm to improve rapid economic growth and development resulted in government involvement in economic activities, believed to be best operated by the private sector, though the creation and establishment of state owned enterprises. However the resulting waste, inefficiencies and unproductivity of the these enterprises warranted, stimulated and fueled the move in national consciousness towards the imperative of privatization (and commercialization).
The Nigeria privatization programme embarked upon in various rounds and phases has been observed to have accrued numerous benefits to the economy and the capital market in particular. This observed benefits have move forward this research on the “Impact of Privatization on the Capital Market”. In order to achieve the objectives of the study and to validate the hypotheses formulated in the study, a systematic five-chapter approach had been adopted.
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND TO THE STUDY
All over the world the public service as a matter of experience has been know for it’s capacity to create wealth. Consequently, public enterprises have usually been perceived as drain pipes for government budget. Thus creating budgetary strains and avoidable burden on economy. It become a national policy, imperative therefore to disengage the public sector from those area where the private sector has the comparative advantage to perform, while letting the state concern. Security and the enabling environment for business to thrive though enhanced wealth creation.
It is important to observe that for many developing countries like Nigeria, it was perhaps unavoidable for the government in an earlier epoch to promote the initial investments in the early phase of national development of the private sector.
Unfortunately, the government got herself so involved in business that could best be tackled by the private sector that government could no longer perform it’s traditional functions.
Meanwhile, government involvement in national development and wealth creation resulted in the creation and establishment of about 600 federally owned public enterprises (Anya 2001) (over the year till date) which to day have taken generally assessed as inefficient, corrupt unproductive and wasteful. These factors along with that impairing on government efficiency in performance of it’s traditional functions provoked several movements in national consciousness as to the imperative of privatization and commercialization.
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