The Effects Of Privatization And Commercialization Policy On National Economic Development

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ABSTRACT

THE MAJOR PURPOSE OF THIS STUDY IS TO ASCERTAIN THE EFFECTS OF PRIVATIZATION AND COMMERCIALIZATION POLICY ON ECONOMIC DEVELOPMENT USING POWER HOLDING COMPANY OF NIGERIA EKWULOBIA AS A CASE STUDY. THE REASON BEHIND USING THE POWER HOLDING COMPANY OF NIGERIA IS BECAUSE IT IS ONE OF THE PUBLIC ENTERPRISES THAT ITS PRODUCT HAS THE WIDEST CONSUMPTION. THE POPULATION OF THE STUDY CONSISTED OF 254 WORKERS IN PHCN EKWULOBIA ANAMBRA STATE. THE SAMPLE SIZE WAS DETERMINED USING YARO YAMENE FORMULAR. THE SAMPLE OF 155 OUT OF 254 WAS DRAWN USING SIMPLE RANDOM SAMPLING. FIVE RESEARCH QUESTIONS WERE FORMULATED WHICH GUIDE THE STUDY. A STRUCTURED QUESTIONNAIRE WAS DEVELOPED AND VALIDATED FOR USE. TABLE AND PERCENTAGE WERE USED TO ANSWER THE RESEARCH QUESTIONS. THE MAJOR FINDINGS OF THE STUDY WERE: (1) THERE IS GENERAL DISCONTENT BY THE PUBLIC ABOUT PHCN’S SERVICES (2) THERE WAS SERIOUS FLUCTUATING POWER SUPPLY FROM LATE 1992 TO DATE (3) POLITICAL INSTABILITY HAS CONTRIBUTED TO THE PROBLEMS OF PHCN (4) PHCN HAS NOT REGISTERED AS A PUBLIC LIMITED COMPANY. THEREAFTER, IT WAS CONCLUDED THAT: (1) THE GENERAL PUBLIC WERE DISSATISFIED WITH THE POOR SERVICES OF THE PHCN. (2) THE SERIOUS FLUCTUATIONS IN THE SUPPLY OF POWER WAS CAUSED BY BREAKDOWN OF THE POWER HOLDING COMPANY’S POWER STATIONS. (3) POLITICAL INSTABILITY IN OUR COUNTRY HAS MADE IT DIFFICULT FOR THE SUCCESSFUL PRIVATIZATION OF PHCN. THE FOLLOWING RECOMMENDATIONS WERE MADE: (1) PHCN SHOULD ESTABLISH A GOOD PUBLIC RELATION. (2) THERE SHOULD BE REHABILITATION AND MAINTENANCE OF THE POWER STATIONS. (3) EFFORTS SHOULD BE MADE BY GOVERNMENT AND STAKEHOLDERS FOR A SUCCESSFUL PRIVATIZATION AND COMMERCIALIZATION OF PHCN.


TABLE OF CONTENTS

TITLE PAGE                                                            i

 APPROVAL PAGE                                                   ii

DEDICATION                                                          iii

ACKNOWLEDGMENT                                             iv

ABSTRACT                                                              vi

TABLE OF CONTENTS                                           viii

 

CHAPTER ONE

1.0   Introduction                                                    1

1.1      Background of the study                                2

1.2      Statement of the problems                             5

1.3      Purpose of the study                                       7

1.4      Significance of study                                       8

1.5      Research questions                                                10

1.6      Scope/Delimitation of the study                    11

1.7      Limitations of the study                                 12

1.8      Definition of term                                           13

 

CHAPTER TWO

2.0   Introduction                                                    16

2.1   Effects of privatization and commercialization policy                                                            17

2.2      Privatization and  commercialization in other countries                                                         23

2.3   Privatization and commercialization

In Nigeria                                                                24

2.4   Objectives of privatization and commercializationprogramme.                                                   30

2.5      Effect of sap on electricity supply problems     32

2.6      Electricity generation and transmission capacities34

 

2.7     Sales and revenue collection in a commercialized

PHCN                                                               39

2.8      Summary in literature review                           42

 

CHAPTER THREE

3.0   Research methodology                                   45

3.1      Design of the study                                         45

3.2      Area of the study                                            46

3.3      Population of the study                                  46

3.4      Sample size/sampling techniques                 46

3.5      Instrument for data collection                       47

3.6      Reliability and validation of the instrument     48

3.7      Distribution and retrieval of the instrument    49

3.8      Method of data analysis                                 49

 

 

 

CHAPTER FOUR

4.0   Data presentation and analysis                     51

4.1   Presentation of findings                                  51

4.2   Discussion/Analysis of findings                     54

 

CHAPTER FIVE

5.0   Summary of findings, Conclusion and Recommendations                                               57

5.1   Summary                                                        57

5.2   Conclusion                                                      58

5.3   Recommendations                                          59

References                                                      60

Appendix                                                         62

Questionnaires                                               63

 


                          CHAPTER ONE

1.0                   INTRODUCTION       

The privatization and commercialization of public enterprises in Nigeria was an initiation of the country’s military leaders. The review of the economy in 1985 revealed that most government parastatals were running at great loses. This was attributed to the inefficiency and waste in resource use, as a result of lack of application of capital economic principles in the management of these parastatals.

In an attempt to stem this situation, the Babangida administration decided to privatize and/or commercialize some of these obviously ailing public wealth with the hope of reducing government wasteful expenditure and improve income generation through the commercialization principle.

 

1.1  BACKGROUND OF THE STUDY

       The import substitution policy of the post independence Nigeria led to the establishment of industries. Apart from this prime motivation for import substitution, there was the need to create jobs for the growing educated youths, the need of industrialization and the ideological argument that the government should control, regulate and supervise the commending heights of the then nascent economy.

Furthermore, there was the need to strive to catch up with the developed countries of the world and since the indigenous businessmen and managers were neither technically nor financially ready to assume the catalyst role which their counterparts in the developed countries were playing; government felt obliged to fill the investment gap. The obvious imperfections in the market oriented economics in terms of resources allocation to the more profitable but less preferred sectors of the economy was yet another reason for government intervention in the economy.

        The sum total of these is that between 1960 and 1980 the various governments in Nigeria both at federal and state levels established numerous industries. The core characteristics of most of these industries were inefficiency in the utilization of resources and their consequent dependence on the public treasury for subvention. Therefore, these adverse operating condition could not make for rational economic decisions. Consequently, these enterprises and their management lost their mission and became pipes for wastages, agencies for political patronage and generally parasites on the national and state treasuries. There then arose the need for reprioritization of economic policies and the need to release the energy in economy suppressed by bureaucracy and undue control.

        Government at various levels realized that goals of economic growth, full employment and high standard of living could not be actualized without the active participation and leadership of the private sector. There was therefore need for invitation to private individuals and organizations to assume the role of activation and management of the national economy. There was also the need for the infection of private sector enterprises for profitability and efficiency, hence the privatization and commercialization policy.

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