THE IMPACT OF PRIVATIZATION ON THE ECONOMY DEVELOPMENT
1.1 BACKGROUND OF THE STUDY
In the era of post colonialism, Nigeria has at one time or another, embarked upon certain policies that have political economic implications. For instance, from 1960 to date, Nigeria has introduced indigenization and nationalization policy, operation feed the Nation (OFN), Austerity measure, structural adjustment programme (SAP), Deregulation of oil sector, Resource control Privatization and commercialization of public enterprises to mention but a few. The critical question here remains. How many of these policies have been able to restructure the political economy of Nigeria to the tune of alleviating the yearnings and aspirations of the working class.
The world no doubt is moving towards capitalization and any nation that is not moving towards this direction is seen as either not developing or even retrogressing. A capitalist economy is a free market economy which allows most economic decisions to be guided by the twin forces of demand and supply. Since capitalization discourages monopoly but encourages competitive market, it therefore enhances efficiency and high productivity which is very vital in any developing country’s economy. In Nigeria, most government owned industries and establishments remain citadels of corruption, studies in efficiency and consequently a heavy drain on the economy. As a means of curbing this menace, the Brettonwoods institutions (IMF & WORLD BANK) have advocated the twin policies of privatization and commercialization.
1.2 STATEMENT OF PROBLEM
Privatization and commercialization of public enterprises is a vital tool for the upliftment of a country’s economy, more especially the developing countries like Nigeria. Regrettably, the problems facing this privatization and commercialization program is implementation of privatization policy and the administrator of privatization and corruption.
However, it is based on these problems that the basic propositions of this privatization and commercialization program are being hindered. In trying to look into these discrepancies and proffer a way forward towards a positive state of privatization and commercialization of public enterprises in Nigeria, this research work emanated.
1.3 OBJECTIVES OF THE STUDY
1. To determine the impact of privatization on Nigerian Economy
2. To determine the post privatization effect on Nigerian economy.
3. To make a comparative analysis of what innovations the policy has brought into the economy.
4. To assess the factors that led to the privatization and commercialization of these public co-operations and its origin. Thirdly, this work will also evaluate the various privatization and commercialization programs embarked by the Nigerian government from 1988 to 2010.
1.4 RESEARCH QUESTIONS
This work will tend to ask some relevant questions like:-
1. What are the reasons why these public enterprises have to be sold despite the rationales for its establishment?
3. Can these corporations function well under the care of the state rather than being privatized whether wholly or partly?
4. How far has this privatized enterprises gone in boosting efficiency and high productivity to benefiting Nigerians as a whole whether poor or rich, higher place or less privileged?
5. Who are the main beneficiaries of the privatization program?
1.5 SCOPE OF THE STUDY
The scope of this research work focused strictly on the impact of privatization on Nigeria economy. Therefore, the area in which data were collected is within Nigeria.
1.6 LIMITATIONS O F THE STUDY
On the course of this research, the following problems were encountered, like short time frame. Financing problem, scarcity of information or data, etc. this is due to mainly, the wide scope of this study which emphasizes on a complex institution like Nigeria. Now, the implication is that the short time frame mapped out for this research work posed a problem of assessing these programs as whole, but that doesn’t threat the authentication and quality of this work.
Again, enough finance for the accomplishment of this work became a problem in the sense that gathering information was costly, the researcher needed enough money to gather them.
1.7 SIGNIFICANCE OF THE STUDY
This research work will help the government and readers to understand those benefits that privatization embodies which we have neglected and politicized with in the past. In understanding this on the side of the government, it will allow them to rethink and work towards real implementation of it thereby creating a room for the rapid growth and development of Nigerian economy. On the other hand, it will go a long way to create an avenue for more academic research.
1.8 DEFINITION OF TERMS
PUBLIC CORPORATIONS: Public corporation or enterprise as defined by Adamolekun (1983), are organizations that emerged as a result of government acting in the capacity of an entrepreneur. They can be seen as those corporations or enterprise built, owned and managed by the government.
PRIVATIZATION: This is a programme of divesting government interest, ownership and control of certain public enterprise and transferring same into the hands of private sector economic units which can be done in full or in part.
FULL PRIVATIZATION: This means divestment by the federal government of all its ordinary shareholding in designated enterprise. Particularly affected are enterprises which produce goods that are not essential in nature.
PARTIAL PRIVATIZATION: This means divestment by the federal government of part of its ordinary shareholding in designated enterprises.
MONEY MARKET: This refers to an arrangement whereby short term borrowers (deficit economic unit) short-term lenders (surplus economic unit) are brought into contractual.
COMMERCIALIZATION: This means the reorganization of enterprises wholly partly owned by the federal government in which the commercialization enterprise shall operate as profit making commercial ventures and without subvention from the governments.