THE CHALLENGES OF EFFECTIVE PRIVATIZATION OF PUBLIC ENTERPRISES IN NIGERIA
ABSTRACT
This project titled “ The challenges of Effective Privatization of Public Enterprises in Nigeria using Nigeria
Telecommunication in Limited NITEL Limited, Enugu is aimed at determining how privatization could lead to
societies of Nigeria’s effective public enterprises in Nigeria. The fact that transferring non-performing public
enterprises to the private sector would eliminate corruption mismanagement, improve efficiency and technology
under serves the significant of the study, as fund, that would have been committed to maintenance of otherwise
inefficient enterprise have been free into more productive sector of the economy. In the course of the study,
hypothesis was tested using chi-square (X2). A sample size of 150 respondents was used. Distribution of
questionnaire to these sample sizes was by a simple random sampling, it was discovered that gave support for
privatization enterprises like NITEL to improve efficiency as a way of solving our economic problem. It was
recommend among other things that government should device a means that would enable the poor one to buy
share in the enterprises being privatized. In view of what has been achieved by the study. It was concluded that
it will implemented, privatization would lead to oureconomic recovery.
CHAPTER ONE
1.0 INTRODUCTION
1.1 Background To The Study
Public enterprises were established, to enhance Nigeria’s socio economic development, especially after
independence in 1960. The major concern in this regard had been to accelerate development and economic selfreliance through “economic nationalism”. Public enterprises thus reflect one of those instruments by which
government intervenes in economic development rather than allow market forces to dictate the pace of
development. According to Ayodele (2004), Nigeria relied heavily upon public enterprises, up to themed-1980s,
for the development, management and allocation of utilities and social services.
They were seen as major instruments not only for the mobilization and allocation of public investment
resources, employment generation and income redistribution, but also for determining government finances and
the acceleration of overall economic development.
Adeyemo (2005), reflecting Turkey, Mexico, India and Nigeria, noted that the establishment of public
enterprises was premised on what he considered as obstacles to economic development in the past independence states. It is also instructive to note that in Nigeria like many developing countries, public enterprises
are used as employers of last resort. According to Hemmina and Mansor (1988), states owned enterprises enable
government to pursue goals of social equity that the market ordinarily ignores. Similarly, Ugorji (1995) observed
that public enterprises had been established for political reasons. Many government undertakings were used to
provide jobs for constituents, political allies and friends. The location of public enterprises and the distribution of
government employment have further been defended on the need to maintain federal character and promote
national integration.
Other factors that accelerated the growth of Nigeria’s public sector were the indigenization policy of 1972 as
enacted by the Nigerian Enterprises Promotion Decree. It was designed to control the commanding heights of the
economy. The policy further provided the much needed legal basis for extensive government participation in the
ownership and control of significant sectors of the economy.
According to Adesanmi (2011), the government, set up the Bureau of Public Enterprise (BPE) to privatize
and commercialize, as the case may be, public enterprises with the objective of reducing or eliminate the drain on
public treasury. It also seek to reducing corruption, modernize technology, strengthen domestic capital markets,
promote efficiency and fiscal deficit, resolve massive pension funding problems, broaden the base of ownership of
business. Other include generating funds for the treasury, promoting governance, attracting foreign involvement
and attract back flight capital. Whether the BPE has met and realized these objectives is a matter that is open for debate.
1.2 Statement of the Problem
Recent time in Nigeria, there has been a policy to privatization of public enterprises. This was aimed at enhancing
their level of productivity and ensuring overall national development.
However, the performance of these privatized enterprises has been replete with varying contradictions. This
study appraised the post-privatization performance of the privatized enterprises in Nigeria. In assessing the
challenging of privatization in Nigeria, certain indices were used for analysis such as profitability. Analysis showed
that certain factors such as corruption, lack of transparency, lack of co-operation from some government official,
geo-political and income group spread and other problems.
Also suggestion will be made for Nigeria to embark on a better privatization policy for better level of productivity in Nigeria.
1.3 Objectives of the Study
The objective of this study seeks to covers the challenges of effective of privatization of public enterprises using
Nigeria Telecommunication Limited (NITEL). These are objectives of this study:
- To identify and discuss the need for privatization of NITEL.
- To identity the effective privatization of NITEL.
- To recommend measures to enhance the effective privatization of NITEL.
1.4 Significance of the Study
Nigeria has suffered a great deal from mono-cultural dependence in the export commodity, she has also
neglected agriculture that used to account for the occupation of more than half of the total population of million
people as at 1960.
Therefore, a country that was predominantly agrarian producing enough food crop for the domestic
consumption and export, eventually turned to be a net importer of food items. The import of between (1974 –
1984) were remarkable for excessive increase in importation of most commodities even though ones that we have
resources to produce with negative impact in one balance of payment position, the resulting problems made
Nigeria to resort to self seeking economic policies geared towards achieving self reliance. Therefore the emphasis
was on increasing our industrial base.
But greater percentage of government industrial policies were directed to public investment neglecting
private sector initiative but not exist (tolls on federal and state high ways) reduction in existing subsidies. Again
industrialization cannot be complete without private sector.
Problems and challenges of privatization in Nigeria contributed a whole lot in terms of national output and employment.
1.5 Scope of the Study
The scope of this study covers the study of the challenges of effectives of privatization of public enterprises
using Nigeria Telecommunication Limited (NITEL).
1.7 Research Questions
What are the effective privatization of public enterprises in Nigeria?
Do privatizing in Nigeria public sector help to alleviate our problem?
Do you think that privatization will lead to inadequacy of the private sector to provide certain goods and
services that require enormous investment?
Challenges of privatization can it be tackled by strong policies?
1.8 Research Hypothesis
The following hypothesis has been formulated based on the objectives of the study and the statement of the
problems as follows:
H0: Challenges of privatizing industries is associated with inappropriate technology.
H1: Challenges of privatizing industries is not associated with inappropriate technology.
H0: Privatization would aggravate the problem of unemployment?
H2: Privatization would not aggravate the problem of unemployment.
1.9 Definition of terms
Some definitions of terms as used in the study were as below;
a. Authority: It means power or right to give order and make others to be obeyed.
b. Commercialization: This is concerned with the reform of public enterprises to achieve high efficiency and
productivity, without change of ownership.
c. Electric: This means all the phenomena associated with electrons (negative charged) and protons (positive
charge the study of these phenomena.)
d. Privatization: This means transfer of ownership of enterprise between the government and the private
sector.
e. Problem: This stands for questions to be solved or decided.
f. Public: The citizens of people of a country.
g. Public enterprises: This means any corporation, board, company or parastatal established by or under any
enactment in which the government federation has ownership or equity interest.
h. Strategic investor: It means a reputable core investor or group of investors having the requisite technical
expertise, the managerial experience and financial capacity to effectively contribute to the management of the
enterprises be privatized
THE CHALLENGES OF EFFECTIVE PRIVATIZATION OF PUBLIC ENTERPRISES IN NIGERIA