ABSTRACT
Irrespective of
the fact that this project is meant to fulfill partial academic
requirement efforts have been made to make the project more useful for
knowledge seekers and students alike.
This project will enable
the readers to know more about research accounted for the establishment of
government owned institutions, various problems confronting them and how
ineffective they have been managed and which had partially contributed to the
declining economy in Nigeria.
The problem as it would
be seen in course of this research will be dealt with under politics,
administration and finance. As a solution to these problems of
parastatals in the programme of “ privatization of these establishments.
This will be the theme oft his project and effort will be made to define what
the programme intends to achieve, meanings, prospects and problems of the
project.
The success of the
research is based on analyzing the basis of privatization methodological
collection treatment of data analysis. The project’s appropriateness as a
means of solving economic problem would be analyzed. The likely effect it will
have on the economy there after public at large government and parastatals
involved.
It would be discovered
that all these and many points like review of various suggestion of experts on
the topic of privatization would be considered it is believed that this project
will be of immense use to both students coming behind as well as
those that are involved in the policy making of this great country Nigeria as a
basis of reference.
TABLE OF CONTENTS
CHAPTER ONE
1.0 Introduction
1.1 Background of the study
1.2
Statement of the problem
1.3 Need for the study
1.4
Research questions
1.5
Scope of the study
1.6
Limitation of the study
1.7
Definition of terms
CHAPTER TWO
2.0 LITERATURE
REVIEW
2.1
Contribution of some business executives, academics and
professionals
2.2
Relevance of the review
2.3
A case study of related parastatals
2.4
Formation and development of NEPA
2.5 Financing
and management of NEPA
2.6 Problems
of NEPA
2.7
Commercialization versus privatization
2.8
Cases for privatization of NEPA
2.9
Cases against privatization of NEPA
CHAPTER THREE
3.0
Research design and methodology
3.1
Data collection
3.2
Area of study
3.3
Population of the study
3.4
Location of data
3.5
Questionnaire administration
3.6
Method of data collection
CHAPTER FOUR
4.0
Data presentation and analysis
4.1
Data analysis and interpretation
4.2
Summary of findings
CHAPTER FIVE
5.0
Discussion of result
5.1
Discussion of result and findings
5.2
Conclusion
5.3
Recommendation
5.4
Suggestion for further research
Bibliography
Appendix
(questionnaires)
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”
Taking a survey of
privatizations, it will discover that it is not a new subject in the economics’
literature. Since the end of Second World War, rapid indeed
spectacular development in technology especially in the fields of communication
and information management has facilitated increasing contact and interaction
amongst people of the world. Technology has also helped to unlock an
unprecedented capacity for the creation of wealth and has promoted massive
increase on trade between nations.
Communication
information and trade have facilitated the rapid breaking down of all great
barriers that have separated people and nation geography, language and culture.
The last great barrier, ideology came crushing down the collapse of the solvent
union and the system of centrally planning economy that it had promoted and
championed since the Russian Revolution of 1917.
Also after the second
world war, Britain embarked on a deliberate policy of nationalization of it’s
basic industries with a view to enhancing efficient planning of British economy
and to ensure an uninterrupted flow of essential service and goods to the
generality of the populace. But the transfer of fourteen (14) large
companies and many smaller ones employing a total of about 600,000 people from
public to private hands over the first eight years. Britain is today a leader
in the course of privatization of public enterprises with over 90% of the
economy in the private sector in the same vein is the united sates of America
(USA), which seems to be the most privatized economy in the world.
It is suffice to recognize
the facts of today’s realities that “ those countries that operates liberal
market economic closely aligned to global economic system within the frame work
of a free and open democratic political system and s supportive enabling
socio-cultural environment are the winners. These are the countries that
are able to provide for the majority of their citizens
Various strategies are therefore applied to implement and achieve sustainable
economic development. But from the experience of many countries over the
past two decades it is now widely accepted that three major forces drive the
process in successful countries. These are; technology: the effective
harnessing of science and technological skill and capacities for national
development.
Liberation:
The opening up of the national economy to market forces freeing prices trade
and entry to market force from state control.
Globalization:
Aligning domestic economics to the global economics system and opening up
domestic market to external competition while encouraging domestic producer of
goods and service to compete in external market.
The debate on
privatization has been on the presumed efficiency of the private sector
visa-visa the public enterprise and how the latter can be made more responsive
to the market forces. It is an undutiful fact in developing countries
like Nigeria in particular it has been realized that inefficient companies are
typical drain on national treasures that the contribute greatly to the enormous
current debt problems.
This if efficiency can
be elevated in relation to profitability cost saving and consumer satisfaction
and the like do we consider privatization as the only panacea? And to
what proportion should the state and private individual hold factor of production
and distribution.
The aim of this project
is to address the issue of privatization in details and show it’s effects
1.2
STATEMENT OF PROBLEM
The role of government
enterprise in the economic development of modern nation cannot be ignored. The
unique historical conditions of the developing countries had urged government
participation or extensive intervention in most sector of economy a vital
necessity.
In the capitalist
economies parastatals came into being as part of general economics policy to correct
market failure. The market may lead to no-optional resources allocation for
several reasons. For instance private, and social rationality may diverge
externalities and indivisibility may be weak or there may be which pigeons has
called a “defective telescope faculty” in the part of private enterprise.
Regarding this
background the consideration involved in the establishment of state parastatals
may be ground under three basis.
i.
The considerations are of political issues when the ruling directorate is
interested in changing radically the structure of property right within the
economy.
ii.
Economic consideration lay emphasis on the issues as the nature of the
production functions for example (is a particular industry characterized by the
constraint decreasing or increasing returns to scale?). The quality of the
commodity produced for example (is a commodity such that every one has equal
use).
iii.
Pragmatic looks are involved when the coming into being of parastatals in the
result of a desire to fulfill a specific, social, economic or political
objective or solve specific problem at a particular time stated and actual
motives behind the establishment of parastatals in developing countries are to:
a.
Provide entrepreneurship support
b.
Control monopolies
c.
Control commanding heights
d.
Provide public services
e.
Profit for investment
f.
Prevent business failure etc.
1.3
NEED FOR THE STUDY
A.
TYPES OF STATE PARASTATALS
It is perhaps pertinent
to show various types of parastatals as one of the relevance addressed by this
dissertation.
Basically, the history
of state participation in business exist today not by accident but by
patrimony. It was part of the colonial legacy bequeathed to us in the
country during the period of colonization. In keeping with the practice
in the mother country the British colonial administrators kept public sectors
certain types of activities that were traditional held by the British
government.
This category of activities
include the utility service industries health education housing, water
electricity supply port, ports, rails air and sea transportation including the
marketing of agricultural produce through marketing boards there state owned
services were automatically passed and retained by the indigenous public sector
the government.
Furthermore,
past-independence government, buttressed by the oil wealth wanted to yelt
propel the tempo of economic development by playing a catalytic roles in the
strategic sector where the indigenous private sector was too naïve and weal to
take the public sector to make significant in roads petrochemical industries
and others. It is view of some influential public officer that certain
types of business were easy money printer in the hands of private sector. They
felt that a throat into that area of business activity could expand the revenue
sources and generating base of the expectation of operating and managing them
as effectively and profitably as private sector was doing.
The role, which a
parastatls plays, depends on the type of economic system. Its particular role
in an economy and various forms of its organization depends on several factors
existential and historical. It is difficult there for to classify prostates in
a mat and systematic manner. A certain analytical constituency can be
achieved by adopting a multicriterial empirical perspective.
Adopting such approach
underlying considerations regarding the creation of parastatals must be
considered the adult circumstances of their coming into being the various forms
of the organization an extent to which they manifest certain characteristics of
publicity are also relevant.
B.
CAUSE OF FAILURE OR PROBLEMS OF STATE ENTERPRISE
A survey in Nigeria into
over 150 public companies and corporation as at the end of 1985 showed that the
return on government is N 20. 05-billon investment was only 15%. This comprises
of dividend bonus issues loan repayment and interest payments. This 15% return
was discovered then to have been contributed only handful of the companies
likes NNPC and some banks. The failure of state enterprises can be attributed
to the following:
Firstly there is the
problem of subjective criteria in appointment of executives. This means that
chief executives and principal functionaries of parastatals were appointed not
because of their proven integrity and capability to deliver goods and service
but their appointment had been made for the reason of the nepotism dressed up
in disguise of federal character. This makes sense accountability to be
of no space with the executive and the result is always that the managers of
parastatals become complacent and inert.
Secondly, there is the
problem of over supervision by supervising ministries. The irritability of
government owned establishment could improve their performance
DEMERITS:
1.
Sectional economic domination
2.
Market concerning by the rich- indicates that the company will be owned by wealth
people of the country and this can be at the expense of the whole populace
3.
It will be difficult to get appropriate basis of valuing various
companies to be privatized this will invariability lead to over/ under valuation
of these companies with adverse effect
4.
Exploitation of consumers by privatized companies this means that when the
privatized companies are mostly purchased by few citizens this will lead to
exploitation.
5.
It can also contribute to price like a case in point being the removal of
subsidy from petroleum and it’s consequence impacts on the general level
prices. All told privatization entails cost to society in
terms of widening income gap loss of job increasing inflation and limited
ability of public to influence supplies
1.4
RESEARCH QUESTION
It is the objective of
the study to know
1.
Can privatization be the government last resort towards efficiency?
2.
Does the on going privatization of parastatals revive the inefficiency in
government owned corporation?
3.
What is the cause of inefficient management of government parastatals?
4.
Can privatization increase the cost of living of the people?
5.
Would privatization improve the service of government parastatals?
6.
Do you think that privatization of public cooperation could be a means of
solving our economic problem?
1.5
SCOPE OF THE STUDY
Since it is the aim of
this project to bring out in details is the various problems of parastatals and
suggesting privatization as a means of solving these economic problems the
scopes will cover the following area considered relevant to the subject
matters:
i.
An examination of how some or types of parastatals are formed.
ii.
Considering the various problems characterizing these parastatals.
iii.
Interviewing and making analysis on the company to be privatized.
iv.
Framing the prospects and various problems of parastatals and other relevance
to the project.
v.
Commenting on the decree 25 enacted for the implementation of privatization in
Nigeria.
vi.
Suggesting of strategies for successful implementation of privatization
vii.
List of companies to be fully or partially privatized
1.6
DEFINITION OF TERMS
The following terms are
defined in relation to the above topics:
1.
Privatization: This is the sale of formerly public enterprise to private
individuals and groups
2.
Efficiency: This is the state and quality of
being efficient.
3.
Bureaucracy: This
states that legal power and authority result with the institution not
with the individual
workers.
4.
Productivity is the ability to produce
5.
Panacea: Remedy for all
troubles.
Department | Business Administration and Management |
Project ID Code | BAM0080 |
Chapters | 5 Chapters |
No of Pages | 67 pages |
Methodology | Chi Square |
Reference | YES |
Format | Microsoft Word |
Price | ₦4000, $15 |
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Contact Us On | +2349067372103 |
Contact Us On | +2349094562208 |
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