ASSESSING THE EFFECT OF PRIVATIZATION OF PUBLIC SECTOR ENTERPRISE ON NIGERIAN ECONOMIC DEVELOPMENT - Project Topics & Materials - Gross Archive
ASSESSING THE EFFECT OF PRIVATIZATION OF PUBLIC SECTOR ENTERPRISE ON NIGERIAN ECONOMIC DEVELOPMENT
A STUDY OF ENUGU ELECTRICITY DISTRIBUTION COMPANY (EEDC)
ABSTRACT
This research work examined Assessing the effect of privatization of public sector enterprise on Nigerian economic development. A study of Enugu Electricity Distribution Company (EEDC). The objectives of the study include to: find out the extent privatization of public sector enterprise has affected economic development in Enugu State, determine the relationship between privatization of public sector enterprise and Gross Domestic Product (GDP) in Enugu State, ascertain the effect of privatization on job creation in Enugu State and examine the challenges militating against privatization of public sector enterprise in Enugu State. The major instrument of data collection was the questionnaire. The sources of data were the primary and secondary sources. The population of the study was 258 while the sample size of 157 was determined using the Taro Yamane’s formula. The data collected were presented in tables, of frequencies and percentages using the five point likert scale. The hypotheses were tested using the chi-square distribution formula. The findings included that Privatization of public sector enterprise has a significant effect on economic development in Enugu State, Privatization of public sector enterprise has a positive relationship with Gross Domestic Product (GDP) in Enugu State, privatization has a significant effect on job creation in Enugu State and there are challenges militating against privatization of public sector enterprise in Enugu State. The researcher concluded that privatization of public sector enterprise has a big impact on Nigeria economic development and it was recommended that the management of the privatized enterprises in Enugu State should carry out their activities seriously as privatization positively affects economic development in Enugu State, Government should consider privatizing the ailing organizations as it has a positive effect on the GDP in Enugu State, Government should also consider creating more jobs through privatizing some of the moribund organizations and before embarking on privatization, steps should be taken to overcome the challenges militating effective privatization.
TABLE OF CONTENTS
CHAPTER ONE
NTRODUCTION
1.1 Background of the Study
1.2 Statement of the Problem
1.3 Objectives of the Study
1.4 Research Questions
1.5 Statement of Hypotheses
1.6 Significance of the Study
1.7 Scope of the Study
CHAPTER TWO
REVIEW OF RELATED LITERATURE
2.1 Conceptual Framework of the Study
2.1.1 The Concept of Privatization
2.1.2 Forms of Privatization
2.1.3 Reasons and Motives behind Privatization
2.1.4 Challenges of Privatization in Nigeria
2.1.5 Meaning of Public Enterprises
2.1.6 Characteristics of Public Enterprises
2.1.7 Difference between Private and Public Sector
Enterprises
2.1.8 Relationship between Gross Domestic Product
(GDP) and Privatization
2.2 Theoretical Framework of the Study
2.2.1 The Residual Claimant or Property Right Theory by
Alchian and Demsetz
2.2.2 The Dispersed Knowledge Theory by Hackey
2.2.3 The Policy Choice Theory By Scholeifer and Vishney
2.3 Empirical Review
2.3.1 The Extent Privatization of Public Sector Enterprise
has Affected Nigerian Economic Development
2.3.2 The Relationship Between Privatization of Public
Sector Enterprise and Gross Domestic Product
(GDP) of Nigeria
2.3.3 The Effect of Privatization On Job Creation in
Nigeria
2.3.4 The Challenges Militating Against Privatization of
Public Sector Enterprise in Nigeria
2.4 Summary of Review of Related Literature
2.5 Gap in the Review of Related Literature
CHAPTER THREE
METHODOLOGY
3.1 Research Design
3.2 Sources of Data
3.2.1 Primary Sources
3.2.2 Secondary Sources
3.3 Area of the Study
3.4 Population of the Study
3.5 Sample Size Determination
3.6 Instruments for Data Collection
3.7 Validity of the Instrument
3.8 Reliability of the Instrument
3.9 Method of Data Presentation and Analysis
CHAPTER FOUR
DATA PRESENTATION, ANALYSIS AND DISCUSSION OF FINDINGS
4.1 Data Presentation and Analysis
4.2 Bio-Data
4.3 Data Relating To Research Questions
4.3.1 Research Question One
4.3.2 Research Question Two
4.3.3 Research Question Three
4.3.4 Research Question Four
4.4 Test of Hypotheses
4.4.1 Test of Hypothesis One
4.4.2 Test of Hypothesis Two
4.4.3 Test of Hypothesis Three
4.4.4 Test of Hypothesis Four
4.5 Discussion of Findings
4.5.1 Discussion Based on Hypothesis One
4.5.2: Discussion Based on Hypothesis Two
4.5.3: Discussion Based on Hypothesis Three
4.5.4: Discussion Based on Hypothesis Four
CHAPTER FIVE
SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS
5.1 Summary of Findings
5.2 Conclusion
5.3 Recommendations
5.4 Contribution to Knowledge
5.5 Suggestions for further Research
List of References
Appendix A
Appendix B
Appendix C
CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
The participation of the state in enterprises in Nigeria dates back to the colonial era. Then, the task of providing basic infrastructure such as railway, road, bridges, water, electricity and port facilities fell on the colonial government due to the absence of indigenous companies with the required capital intensive project (Iheme, 2015). The involvement was expanded and consolidated by colonial welfare development plan that was formulated when labour party came to power in the United Kingdom. This trend continued after independence such that by 1999, it was estimated that successive Nigeria government had invested up to N800 billion in public owned enterprises (Igbuzor, 2014). Throughout much of the twentieth century, there were three dominant strategies for infrastructure investment. In some countries, most notably those in the Eastern Bloc, state ownership of the means of production was promoted, while others (Western Bloc) promoted private ownership of production. A large number of countries also promoted what was termed a mixed economy, a combination of public and private ownership of the means of production. However, by the end of the twentieth century with the end of the cold war between the eastern and western bloc, private ownership of the means of production gained ascendancy. Today, what is applicable is that State should recede from this role and that private ownership of the means of production is the only viable approach to the efficient production of goods and services, as well as economic growth and development. Consequently, there is a strong move all over the world to privatize erstwhile public enterprises (Igbuzor, 2014). Thus, privatization could be looked upon as the reduction of public sector intervention in economic activity. It involves the divest of government economic activities (Anyanwu, 2016). It occupies a unique position in a global economic liberation and provides an avenue for raising productivity, thus enhancing efficiency.
This is, however, achieved through increased involvement of the private sector in productive economic activities through the sale of public enterprises, to the private sector with the ultimate aim of infusing improved economic efficiency in businesses. With privatization, the role of government in direct productive activities diminishes as the private sector takes over such responsibilities with the profit motive as its major objective. In such a situation, government is only expected to provide essential infrastructure and an enabling environment through which private enterprises could flourish. Privatization is predicated on the assumptions of State inefficiency and absolute efficiency of the market (Salako, 2014). It would be recalled that several Nigeria public enterprises have on several occasions been under severe criticism by international media agents for their operational and pricing inefficiencies. Nigeria like many other developing economies witnessed increasing cost and poor performance of State-Owned Enterprises (SOEs), resulting in heavy financial losses.
The provision of regular, affordable and efficient electricity is crucial for the growth, prosperity as well as the rapid industrialization of any society (Olorunkanmi, 2014). It is also a truism that any nation that desires to develop will ignore the power sector at its peril. Nigeria electric power has been described as a generator economy (Ekpo, 2016). The manufacturers Association of Nigeria (MAN) and the National Association of Small Scale Industries (NASSI) estimated that their members spend an average of about N2billion per week on self-power generation.
The manner the new owners and operators of the nations power system started was not encouraging (Nnodim, 2014). This is quite different from what took place in the telecom sector, where competition, promos and avalanches of
public enlightenment invaded the media, this is because Nigerians are yet to feel the impact of the privatization on the economy. The Gross Domestic Product (GDP) is still falling. Hence, this research examined effect of privatization of public sector enterprise in the Nigerian economy with Enugu Electricity Distribution Company (EEDC) as a case study.
1.2 Statement of the Problem
The consequences of not privatizing Enugu Electricity Distribution Company (EEDC) are devastating. The electricity generation were abysmally low. So many manufacturing companies will close down. Nigeria became a dumping ground for imported generators. Other problems include inadequate infrastructures. Consumers’ fraudulent practices like bye-passing of metres were on the increase, and this causes EEDC to lose money.
Furthermore, the Gross Domestic Product (GDP) of Nigeria were adversely affected and unemployment rate will be on the increase.
1.3 Objectives of the Study
The broad objective of the study was to assess the effect of privatization of public sector enterprise on Nigerian economic development. However, the specific objectives includes to:
1. find out the extent privatization of public sector enterprise has affected economic development in Enugu State.
2. determine the relationship between privatization of public sector enterprise and Gross Domestic Product (GDP) in Enugu State.
3. ascertain the effect of privatization on job creation in Enugu State.
4. examine the challenges militating against privatization of public sector enterprise in Enugu State.
1.4 Research Questions
Based on the objectives of the study, the following research questions were raised.
1. To what extent has privatization of public sector enterprise affected economic development in Enugu State?
2. What is the relationship between privatization of public sector enterprise and Gross Domestic Product (GDP) in Enugu State?
3. What is the effect of privatization on job creation in Enugu State?
4. What are the challenges militating against privatization of public sector enterprise in Enugu State?
1.5 Statement of Hypotheses
Based on the research questions, the following hypotheses are formulated.
Hypothesis One
H0: Privatization of public sector enterprise does not have a significant effect on economic development in Enugu State.
H1: Privatization of public sector enterprise has a significant effect on economic development in Enugu State.
Hypothesis Two
H0: Privatization of public sector enterprise does not have a positive relationship with Gross Domestic Product (GDP) in Enugu State.
H1: Privatization of public sector enterprise has a positive relationship with Gross Domestic Product (GDP) in Enugu State.
Hypothesis Three
H0: Privatization does not have a significant effect on job creation in Enugu State.
H1: Privatization has a significant effect on job creation in Enugu State.
Hypothesis Four
H0: There are no challenges militating against privatization of public sector enterprise in Enugu State.
H0: There are challenges militating against privatization of public sector enterprise in Enugu State.
1.6 Significance of the Study
This research work will be beneficial to the management of Enugu Electricity Distribution Company (EEDC) because they will be more enlighten on the various means of making the privatization exercise a success in Nigeria. The government will benefit from the knowledge from the research work as it will help improve the economy. The general public will benefit from the study as it will lead to job creation. The researcher will benefit as it is a pre-requisite for graduation. The university will benefit as the research work increases their data bank. The research work will also serve as reference material for further research on this topic.
1.7 Scope of the Study
This research work covered the extent privatization of public sector enterprise has affected Nigerian economic development and the challenges militating against privatization.
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