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PRIVATIZATION OF PUBLIC ENTERPRISES ITS EFFECT ON CONSUMER IN NIGERIA

ABSTRACT

This study has focused on privatization of state owned enterprises in Nigeria. A case study of Nigeria Telecommunication (NITEL). The major problem stem from inadequate and irregular finding, political interference in operations. The data collection instrument used was the primary and secondary data, two statistical tools were used for evaluating the finding of the study the simple percentage for analyzing the respondents and chi­-square (X2) for testing the hypothesis. This study is in five chapters viz: The introduction, literature review, research methodology, data presentation, analysis and interpretation, summary, conclusion and recommendation. Majority of the respondent’s response that privatization has brought more efficiency and also that privatization policy of NITEL has contributed to the morale of the workers and employee productivity. It is also observed that privatization policy has increase the participation of Nigeria citizen in economic activities through share ownership in productive investment.

CHAPTER ONE

INTRODUCTION

1.1    BACKGROUND TO THE STUDY

Public enterprises can simply be defined as government owned companies established basically to render services to the people so as to improve their living standard. Olatunde Afuwape (2001). According to Akhakpe Ighodalo (1995) public enterprises can simply be described as an organization or company set up by the government to provide essential services to improve the people's welfare or wellbeing.

Public enterprises in other words can be seen as an organization set up to promote and accelerate the process of social changes in the society.

However some year after independent it became apparent that public enterprises have failed to meet up with their objectives rather than being an asset to the state and the people, public enterprise became a burden to them. The financial commitment of the federal government to public enterprises are so enormous that in the face of shrinking state resources the pattern cannot be sustained.

Apart from public enterprise becoming massive drain on government resources inefficiency and ineffectiveness in terms of provision of goods and services became its benchmark and in the process of eliciting public disdain and disenchantment with their operation. So there is the need for government to act urgently to correct the ills and ailment of state-owned enterprises.

Although several effort have been made in the past to inject quality management and productivity into the operation of public enterprise but this reforms does not yield any positive result, rather the problem still persisted and this has led to the inevitable step to downsize through privatization.

Privatization can be described as the transfer of assets from the state to private hands. In other words it entails change of ownership from public to private hands.

In reality privatization takes many forms and the term is sometimes used broadly to describe any policy changes that enlarge the scope for private enterprise to compete with State­-Owned Enterprise (SOEs) or even one might cause SOEs to behave more like private firms. (Ramamurti R. and R Vernon et l (1991).

1.2    STATEMENT OF RESEARCH PROBLEM

Public enterprise are expected to render services to the public but it could be observed that they (Public enterprise) have failed and because of their failure different problems emerged.

Finance is one of the major problems of public enterprises.

For any organization to be effective be it private or public they need adequate funding or capital to survive. So finance or money plays an inevitable role in the performance or operation of public enterprises. Finance is to government, what air is to living things.

Corruption is another problem facing the public enterprise in Nigeria today. Top officials in the public sectors see it as an opportunity to get rich quick because they believe that government money is no man's money so they diverted public fund into their private pocket.

Poor management and poor accounting system is another problem because records of transaction are not properly kept and money are used or spent unnecessary. Technology also contribute to the inefficiency of public enterprise because most government organization are not well equipped with modern facilities and this goes a long way in affecting the quality of service they render.

All these and some other sundry problem had necessitated in the past the need to carry out one form of restricting or another not only of public enterprises but of the entire public sector.

1.3    OBJECTIVE OF THE STUDY

The primary aim of this study is to examine the impact of privatization on public enterprises. Privatisation can be seen as the transfer of ownership of business from public to private hands, specifically have the following objectives.

·       It sets out to re-orientate the enterprises for privatization toward a new outlook in which there will be performance improvement, validity and total efficiency.

·       To ensure greater degree of competition in the business sector by reducing government involvement.

·       To restructure and rationalize public sector in order to reduce the dominance of unproductive investment in the public sector

·       To develop the capital market by encouraging foreign investors.

·       To introduce ethical standard in those companies privatized.

1.4    RESEARCH QUESTION

a)      Could Nigerian Telecommunication be said to be more efficient and profitable since the introduction of the policy of privatization?

b)      To what extent does privatization policy contribute to the morale of the workers and employees productivity of Nigerian Telecommunication?

c)      Does privatization policy an impact on the consumers?

1.5    RESEARCH HYPOTHESIS

Ho:   The Nigerian Telecommunication has not been more efficient and profitable since the introduction of privatization policy.

H1:    The Nigerian Telecommunication has been more efficient and profitable since the introduction of privatization policy.

Ho:   Privatization of public enterprise will not bring about the improved morale of workers and employee's productivity.

HI:    Privatization of public enterprise will bring about the improved morale of workers and employee's productivity.

Ho:   That privatization of public enterprise does not have an impact on consumers

Hi:     That privatization of public enterprise does have an impact on consumers

1.6    SCOPE OF THE STUDY

In the course of this study the scope will be on the Nigerian Telecommunication Plc (NITEL) now M-tel and how the policy of privatization has affected their workers efficiency and to understand its contributions in the past and how effective it has been.

This research work will be limited due to restraining factor such as time constraint, finance is another constraint or problem and difficulty in getting those NITEL official, as this research work is to be completed within a specified period of time.

1.7    SIGNIFICANT OF THE STUDY

a.      Specifically the result of this study would enhance greater efficiency and effectiveness in the public sector.

b.      The essence of this research work is to add to the existing knowledge of other researchers

c.       This study would assist in revealing the effect of privatization on consumer in Nigeria.

d.      It would enlighten student more on the concept of privatization.

1.8    OPERATIONAL DEFINITION OF TERMS

·       Privatization: It refers to the transfer of the ownership of public enterprise by the government to private hands.

·       Public Enterprises - They are government owned companies or organization.

·       Technical Committee on Privatization and Commercialization (TCPC). It us the committee set up by the government to work out the modalities of privatization and commercialization.

·       M -tel - mobile telecommunication

·       NITEL - Nigeria telecommunication.

REFERENCES

Akhakpe, I. (1995) Public enterprises in Nigeria.

Obadan, M. I. (2000) Privatization of Public Enterprises in Nigeria

Olatunde, A. (2001) www.gamii.com

Ramamurti, R. and R. Vernon (1991) Privatization and control of state - owned enterprises.

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