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PRIVATIZATION AND COMMERCIALIZATION OF GOVERNMENT PARASTATALS IN NIGERIA

ABSTRACT

This premise of this research is based on Privatization and Commercialization of Government Parastatals in Nigeria with reference to Power Holding Company, Nigeria (PHCN) The research adopted a survey research design. A well structured questionnaire was designed and administered to respondents. A sample size of one hundred (100) was drawn from the population of study. The sampling was made based on a simple random sampling technique. The data gathered were presented in tables and analysed with simple percentages. The hypothesis formulated was analysed with the use of Chi-Square technique. It was concluded that - That, privation and commercialization would affect the performance of the power sector; that privatization and commercialization would improve economic performance of parastatals; Privatization and commercialization would solve management problems and productivity of workers in parastatals. Recommendations were proffered that; It recommended that; The policy making government body should separate the planning and procurement of services from their production and delivery; it can then divest itself of much of it’s operating responsibility.

CHAPTER ONE

INTRODUCTION

1.1   BACKGROUND TO THE STUDY

In recent years privatization in particular has become the most common strategy for dealing with the problems of public enterprises (Parastatals) especially since its introduction under the Structural Adjustment Programme (SAP) in the 1980s. Privatization and commercialization of government owned parastatals in Nigeria arises as a result of observed inefficiencies, weak management structure in the allocation of productive resources in the public enterprises. The emphasis was placed when Structural Adjustment Programme (SAP) was finally introduced into the Nigerian System of government in June 1986.

In other words, the orchestrated call for privatization and commercialization of parastatals both at the state and federal levels of government was primarily due to poor performance recorded since independence on public corporation and utilities.  The parastatals became drain pipes where lots of funds were pumped into annually, by the government without commensurate output. Nonetheless, economic deregulation incidentally constitutes one major policy hallmark of government effort at restructuring the Nigerian, economy within the framework of the World Bank /IMF endorsed Structural Adjustment Programme (SAP).

SAP is mostly predicated on the commercialization and privatization programme which derives its legality from Degree No. 25 of October, 1988 and the privatization Act of 1999, and is aimed at competitive efficiency in all ramifications. In spite of indispensability of parastatals in the power sector to socio-economic development, the sector, especially in Nigeria presents a gloomy picture of under development. From the foregoing, this study seeks to look into privatization and commercialization of government –owned parastatals with a particular reference to the power sector.  (Power Holding Company of Nigeria).

1.2   STATEMENT OF PROBLEM

This study examined if the privatization and commercialization process of the power sector would breeds efficiency and effectiveness amongst its officials in delivering prompt and reliable services to its teeming clients, consumers and the economy at large.

The problems for this study are;

- To what extent would privatization and commercialization affect performance of the power sector?

- To what extent would privatization and commercialization improve economic performance of parastatals

- The extent to which privatization and commercial promotes consumer sovereignty.

- To what extent does privatization and commercialization resolve management problems in parastatals.

1.3   OBJECTIVES OF THE STUDY

This research study is set to achieve the following aims and objectives;

- To examine the effect of privatization and commercialization on the performance of the power sector.

- To examine if privatization and commercialization would improve economic performance of parastatals.

- To examine the extent to which privatization and commercialization promotes consumer sovereignty.

- To determine if privatization and commercialization would resolve management problems in parastatals.

1.4   RESEARCH HYPOTHESIS

The following are formulated below

HYPOTHESIS ONE

HO:That privatization and commercialization would not affect the performance of the power sector.

Hl: That, privation and commercialization would affect the performance of the power sector.

HYPOTHESIS TWO

HO: That privatization and commercialization would not improve economic performance of parastatals.

Hl: That privatization and commercialization would improve economic performance of parastatals.

HYPOTHESIS THREE

HO: Privatization and commercialization would not solve management problems and productivity of workers in parastatals.

Hl: Privatization and commercialization would solve management problems and productivity of workers in parastatals.

1.5   SIGNIFICANCE OF THE STUDY

The relevance of this study rests on the fact that privatization and commercialization could help in fostering and nurturing economic growth and development of parastatals human resources and so on. Also, this study would enumerate the rationale behind restructuring of government parastatals and also lessen the dominance of unproductive investment in public enterprise. The significance of the study is also to broaden the knowledge and research on government parastatals.

1.6   SCOPE AND LIMITATION OF THE STUDY

The scope of this study limits itself to privatization and commercialization of parastatals with particular reference to the power sector. The constraints envisaged are; time constraint, finance, and lukewarm attitude of officials in public sector in giving first hand information about their workings.  Also, lack of reliable data for research study is a limitation. Inspite of these constraints however, this research shall carry out an in-dept study of privatization as it affects parastatals in Nigeria.

REFERENCES

Ajonbadi, A. A. (2000):  Applied Business Management Theory. Lagos: Vantage Publishing.

Igodalo Akhakpe (2004):  Privatization of Public Enterprises.  Lagos.

Johnson, A. A. (2004):  Public Enterprises and Privatization in Nigeria, Lagos: Malak Book Ltd.

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