PRIVATIZATION OF GOVERNMENT PARASTATALS AS A PANACEA FOR ECONOMIC GROWTH A CASE STUDY OF NEPA ENUGU

CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

Government establishment from the inception was meant to give its service to Nigerian’s at a subsidized rate with the impact of our oil revenue. Privatization was at very low ebb because of the developing nature of our economy. In recent time, the mismanagement of government parastatals has been a subject of debate. This is unconnected with the level of corrupt practices, which has permeated into the veins of wide range of Nigerian populaces. Lack of full utilization of resources, financial and administrative Mismanagement of most public sectors over the year has resulted into weak and stagnant economy, capital flight excessive debts incurring and under- development.

The indolent performance of the state in the administration of public business establishments create a situation in which national funds that could have been used or better spent be generate new economic activities and employment opportunities are been used to subsidize dead wood that will never grow nor changes” as analogy for the public enterprise It is against the background of re-organizing and making public enterprise more efficient profit making that the government of general Ibrahim Babangida in his budget speech in 1986. Categorically declared to purse a policy of privatization of government parastatals since the introduction of SAP (structural adjustment programme) in 1986 the debate on the issue of privatization has gradually assumed the status of a national controversy. As is common with all controversies the emotions generated the controversy often over shadow the issues itself. More so president Olusegun Obasanjo in one of his broad cast made it clearer to Nigerians the essence of privatization in his government, which will bring development in all ramifications. Privatization is mostly commonly defined as the “Transfer of government owned industries to public sector implying that the predominate share in ownership of assets on transfer lies with private shareholders”