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THE IMPLICATION OF PRIVATIZATION ON NIGERIA ECONOMY

(Accounting)

THE IMPLICATION OF PRIVATIZATION ON NIGERIA ECONOMY

ABSTRACT

This project titled “PRIVATISATION – AS A MEANS OF SOLVING NIGERIA ECONOMIC PROBLEMS” (A CASE STUDY OF NEPA) is aimed at determining how privatization could lead to societies of Nigeria’s economic problems.  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, three (3) 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 NEPA 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 our economic recovery.

TABLE OF CONTENTS

CHAPTER ONE

1.0              Introduction

1.2              Objective of the study

1.3              Significance of the study

1.4              Statement of hypothesis

1.5              Scope of the study

1.6              Limitation of the study

1.7              Definition of terms

CHAPTER TWO

2.0              Review of related literature

2.1       Privatization, meaning & background in Nigeria

2.2              The impact of privatization to Nigeria economy

2.3              Privatization of NEPA, its consequences to nig economy

CHAPTER THREE

3.0              Research design and methodology

3.1       Sources of data

a.         Primary data

b.         Secondary data

3.2              Sample use

3.3              Method of investigation

CHAPTER FOUR

4.0              Data presentation and analysis

4.1       data presentation and analysis

4.2       test of hypothesis

CHAPTER FIVE

5.0              Summary of finding, conclusion and recommendation

5.1       Findings

5.2              Conclusion

5.3              Recommendation

Bibliography

            Appendix (Questionnaire)

CHAPTER ONE

1.0       INTRODUCTION

From the colonial days through the period of our independent, to early 80’s, public enterprise thrived in their functions.  The government established these enterprises in the country for some reasons including government intentions to retain control on behalf of the citizens, the commanding heights of the economy as epitomized by its investments in energy, communication and other important sections.  It also wished to stand market failures, engender regional development, enhance job creation capacities as well as social services delivery.

Unfortunately, as years progressed the objective of government in establishing these public enterprises where to come to nothing as the enterprises were riddle with corruption, mismanagement, over-dependences on the treasury for funding, poor service accountant by the arrogance and arrogance and insensitivity of the managers of these enterprises as well as inequities brought about by nepotism (El-Rafai, 2000).  These public enterprises began to perform below the expectation of the reason for its establishment, such enterprises as Nigeria Air Ways Nigeria Railway Corporation (NRC), Nigeria Coal Corporation (NCC) the National Electric Power Authority (NEPA), gradually witnessed, obsolete facilities, corruption, mismanagement, resulting in poor service delivery huge debt of salaries and wages pension and so on.

 

In an effort to put state enterprises back to its former glory, government committed billions of naira to rehabilitate them which resulted in fruitless effort was most of them today has collapsed.  As a result of government huge financial investment in these arriving industries, it has failed in fulfilling it primary objectives, which is the provision of infrastructure and security through the maintenances of law and orders as well as promotion of enabling and conducive economic environment.

Against this back background, it became a national policy imperative to disengage government from wasteful investment by taking public sector away from these areas where the private sector has the comparative advantage to perform, while letting the state concern to thrive through enhanced wealth creation.  To achieve these purpose the federal government started a process of privatization and commercialization since 1988.  The programme would ensure the inflow of investment, management and technology that would improve and grow the nation is infrastructure services and industries for the benefit of the people.

Privatization involves transfer of ownership of enterprises between the government and the private sector.  This implies that the predominant share in ownership of assures on transfer lies with private shareholders.  Mostly, developed countries of the world, such as Britain, United State of American (U.S.A) with sound economic base has their economic growth hinged on private sector through privatization.  Britain has about 90% of their economy in the private sector.  The same is USA which is believed to have the world most privatized economy.  Therefore, for Nigeria to integrate its economy into the main stream of world economic order, it must embark on privatization.

Dues to the misconceptions, conflicts and debates generated by privatization in Nigeria, to writer was moved to embark on this project entitled.

Privatization – as a means of sowing Nigeria Economic problems (with NEPA as a case study) this is with a view to highlighting its need for our economic growth.

1.1       PROBLEMS OF THE STUDY

In Nigeria public sector has been riddle with corruption, mismanagement, inefficiency, poor service delivery, lack of up to date technology, indolent staff, lack of maintenance.  The National Electric Power Authority (NEPA) as one of the public enterprise has been bedeviled with these shortcomings.  The Epileptic power supply, manor and resources wasted by the electric users as a result of lack of power supply has been a source of worry to enable citizen of the matter.

How could power supply be improved?  What would eliminate corruption on the part of NEPA personnel’s?  How could the over dependent of this sector treasury be eliminated?  What would ensure completion efficiency, improved service delivery and up to date equipment?  How could regular power supply be ensured?  What would bring to an end?

1.2              OBJECTIVES OF THE STUDY

The objective of this study include.

1.                  To find out why public enterprises has failed in performance when compared to private enterprise.

2.                  To correct the misconceptions on privatization of public enterpriser.

3.                  To re-orientate the kinds of the people on how privatization could reduce, corruption, mismanagement, inefficiency and improve technology.

4.                  To identify hindrances to privatization.

5.                  To highlight the advantages of privatization to Nigeria economy.

6.                  To recommend how a successful handing over of public enterprises to private sector could be achieved.

7.                  To present a platform for researchers and knowledge seekers on privatization.

1.3       SIGNIFICANT OF THE STUDY

This study is very important now the government is seriously committed to the privatization programmed.  By this study, people would see reason to give their support to the privatization process, moreso, by having a successful privatization of major public enterprises such National Electric Power Authority (NEPA).  It would broaden Nigeria capital market and created large body of shareholders.  In the process of privatization, more investible capital will be injected into the various economics through local and foreign investors to the benefit of the country at large.  Also, funds that would have been committed to maintenance of otherwise inefficient enterprises have been freed into more productive sectors of the economy.

1.4       STATEMENT OF HYPOTHESIS

The following are the hypothesis of the study

HYPOTHESIS 1

H0:      Privatization is not a genuine and programmatic approach to revitalization of Nigeria economy.

H1:      Privatization is a genuine and programmatic approach to revitalization of Nigeria economy.

HYPOTHESIS 2

H0:      Privatization has not lead to the financial independence of a company.

H1:      Privatization has lead to the financial independence of a company.

HYPOTHESIS 3

H0:      Privatization of NEPA has not improved productivity, efficiency, management and adequate utilization of the resources of the organization.

H1:      Privatization of NEPA has improved productivity, efficiency, management and adequate utilization of the resources of the organization.

1.5              SCOPE OF THE STUDY

The scope of the study is to examine the general principles of privatization and how it could help to improve Nigerian economy.  It does not cover the technical implantation of privatization programme.  The area of coverage is NEPA Enugu District.

1.6              DEFINITION OF TERMS

Some definition 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 enterpriser to achieve high efficiency and productivity, without change of ownership.

c.         Electric:          This means all the phenomena associated with electrons (negative charged) and proteins (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.

 

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