University of Nigeria Research Publications

Aut

hor

OSUAGWU, Gloria C.

PG/MBA/03/37936

Title

Privatisation and Commercialization of Government Owned Establishments in Nigeria:

Problems and Prospects

Facu

lty

Business Administration

Dep

artm

ent

Management

Dat

e July, 2005

Sign

atur

e

OSUAGWU GI,ORIA C. a postipcluatc sluclcnt 01' thc clcpartnicrlt

of Managcnient with I<cgistrativ~l Nutnhcr l1G/MI3A/O3/37936 has

satisfactorily completed h e rcquisctiic~~t oT' the course work and research

Management.

submitted in part or full for any otlicr I I iplo~m or Dcgrcc of this or any

other IJnivcrsity .

(Head of Department)

. . . I l l

' DEDICATION

and Cliinonyereli~, MI.

senior lecturer ol' ilw

w ~ s i ~ i h41- h l n a N~eIi\\.c, lily sisters Chiliyere.

Uslna~i Sule arid my uliclc Sir, Dave Osuag\vu,

- Then, finally 1 om perpetually grateli~l to God Alliiiglity our make1

in ~wliose hands the destiny of every man lies for protection, good healtl- \

and wisdom while working on the prqject.

0su:rg.c~~ Gloria, C.

UNEC.

goverti~nent owned establislinients in Nigeria.

_ To acconiplisli h e study, the social survey research ~iiethod was

considered most suitable and adopted towards data generation. Through

2 q

this method, secontlary data were obtained by ~iieticulous assessment of , I'

available literature review 011 textbooks, journals, seminar and workshop

papers, newspapers, internet. progress reports of the TCPC and others \

that ,are relevant to the ~xxearch and qi~estiotiliaire to the sample

population f the study. Essentially, the researcher adopted tables and

simple percentages for data presen talion.

Consequently, tlie study accumulatecl such findings as:

I . Many people being aware of tlie on-going programtile,

,-. The programme having the problem o l' i~nple~iientatior-t and

I- Suggested solutio~is to the pl.oblc111s ol' implementation and

application,

Chapter Two: Literature Heview

2.1 Concept of privntisatio~i and co~i~rnercialisation

2.2 Privatisation detined

2.3 Methods of privatisntion

2.4 Co~umercialisation de lined

2.9 Privatisation and conimcrcialisation Ii~IJings ill ccrtain

existing industrial c~iterpri scs accordi rig to

decree No. 25 of S 088 29

2.1 0 The privatisatiori pl-occss i 11 Nigcria 3 1

cor~i~iicrcialisatic~~i ~myr-;~~ii~l ic

2.12 Privatisation so Ihr

2.13 Benefits of privatisation and co~n~nercialisation

2.14 Prospects of pr.ivatisntiol~ arid

coriimercialisatiun in Nigeria

2.15 Problems nf privutisatio~~ n~id co[~~~nerciaIisntic~~i

2.16 Sir11111ia1y of the review ol'the 1.clatect literature

References 50 ., ,

Bibliography

A p p e ~ ~ d i s

Cl l . 4 l ' - l ~ l < l < ONlt:

I N T I ~ 0 l ) ~ I ~ " l I O N

1 . I I 3 A C ' K ~ ~ l ~ O ~ ~ N I ~ 0 1 ; -1.1 11s: S ' I ' ~ ~ l 1 ~

~l'hc.~.c ;IIY 1.apirl a l~ i l s\~t.c.lii~~? c . l~ :~ r~sc \ 1:1l,i1\2 ~)l:~c.c. i n tlic politic.al

ecoliomy ol' ~iiost cle\.cloliccl all(l clc\ clolil~g cor~~itri~,\ t11;11 a1 c rlominatcil

b! l i l w a l clcrnoc~x!. i n tIw pc,li~ical ~voc.c.ss arit l l i w cllilc~pise i l l tlic

cco~ioiiiic slil~c~.c. 1 1 1 1 1 1 ~ C I I ~ .,l)lic~ c. 1 1 1 ~ 5 ~ - c l i ; ~ r ~ ~ c ~ arc

chnractcrisctl by ccwo~iiic ~ . c l i ~ ~ l i p.ogra1nmc.s \vliosc lii~idamtt~~tal

okjectives is [lie ratio~i;~lisatitw oi' ~iational ecorio~nics lbr h e

achie~emcnt 01' cfl?cic~ic\ and cll i .c~i\u~css i n rcsoiirus rillocation and

laying 01' ibu~iclation l iw (i1l111.c y o \ \ 111.

Accodirig to %;I! J ad ( I : I I~cc~nn~iiic ~ - c l i m ~ is dubbed

"Sh-uctural Acli~~stnien~ 1'1-ogr.am111e" i n Nigeria, "I'rest~-oika" iri the \

fol-~ner U.S.S.II, " h i ~iioi" i n Vie!~iam, ancl "l'opular capital ism" in

Great Britain. Although h e rel'ul-111s go hy tliffercnt I I ~ I I I C , [hey share a

few co~nmon Ikatures. By cco~io~iiic rcl'orni, nfc Inem a significant

~novcnient by gnu-nriic~its to c\parirl r k use oI'~i~;~~.lict 5iynnls in shaping

procluction and clis[rihi~ tion patlcri~s. a~i r l the ~uluctiori o I- direct state

owtiership and direct state controls over the cco~iomy. 'I'ypically, these

rel'orms occur across s c \ w ~ l itilport;~nr sccrtJ1.s and iticludc change in the

degree of state ownership and regulations, in pricing. pe~-soli~wl and other

ma~iageme~it dfxisions at the enterprise level.

7 A

'fhe I\ orlcl over. tl~c cli I C I I I I ~ I ; ~ 01' 91-o\\ i 112 c o ~ ~ t ~ x i t I~ctu cell public

waste and private th r i l i has c~icou~.agc.cl go\~cr*lilnc.rils to scck solutiotis to

tlic prvbletli ot' puldic cntc~p~iscs. \via 1 1 i i 1 t i 1 nnd

Co~ii~~~rc'lnlisatioti.

All tlic, across the global, this cco~~o~ii ic policcs \\wc Iirsl and 1'01.

niost introclircccl r111cl p~.acticccl in GI-cat Uritai~i at 111c c ~ r l 01' \4'ordd War

11, tlie British g o v w ~ l ~ ~ c ~ ~ t \\liilr. t ~ - \ . i nz to IT\ itrilizc tlic cct)noliiy :lricl

promote rapid expa~ision in the production of' essential goods and

services, stated a policy ol' exteurliu~ public sector i~i\~olvernent inlo

economic activities that t rd i t io~~al ty 1311 williin t l l c province ol' the

private sector.

Also, according to Oye~iiyio (I 98S:34) i t is n t\\;entieth century

phenomenon that gained its popularity u~ider tlie conservative

government of a popular woman I<nown as Mrs. blargret Tliatcher in the

United Kingdom - \vho determined to Iia~icl over utilities that were

formerly regarded as safe li-om clcnatic~~inlizntion, to the private sector, as

well as reorganization of enter-ptises owned by the government to profit

making commercial venture.

However, there are currently over 70 countries across the world

mder-taking one rorm of ecorio~iiic ~ l h r m or the other, not to net it ion the

wliolesale economic restr-ucti~ring taking place in Eastern Europe and the

former U.S S.R.

I Icr-c i n i i I I I I I ~ i i i o ~ i and

coni~iiercial izntion i s an i I 01' rllc S I I I I ad just~iieii~

psogsalnlne inti-oduccd by tlic Ik!crnl ~ i i i ~ ~ i s ( ~ - y ~ O V C I - I I I I I C I I ~ it1 . I U I I ~ , I 986.

But unfortimate etlougli, these economic policies that have been so

11111cli accorded orcliestrnkd plu~iiine~icc. by thc Nigerian yoveaimetit,

mass media arc yct to S w ~ i r l tlicir nica~iitigs, and significnnce, appreciated

and understood by the Nigerian populace. N o wonder then the

implementatiori of this cconomic policies and or ~vc~gta~nmes is

epileptically, incteetl, slw\ in t l~c Nigcria~i sj,stcm. Consccluently, there is

undoubtedly every need to x-ray tlie till1 ~iieatiings of these two economic

policies and of course assess their economic sipniIicance to tlie system.

1.2 S r ~ ' ~ ~ ~ l ~ l ~ h l l ~ N ~ l ~ O l ~ ~ l ~ l l l ~ l ' l ~ O l ~ l ~ l ~ ~ h l

Si11c.c. llir i r i ~ ~ ~ t r t l u c l i c l ~ l ~ r l ' 1 ' 1 i \ : ~ t i / , t ~ i o r i ; i ~ i c l I ' c ~ ~ i i ~ l i ~ ~ c i : l ~ i ~ : i t i o ~ i 0 1 '

go\wnfnclil o\\~ictl sshl~lisl~iiic11t i l l tlic c o i ~ ~ l i n . I t l ~ i s 1 1 ~ ~ 1 1 d is>o\e~nl

that the tiiea~iiti~ and or nuanccs arc !;ct to be undcrstood by greater

~n;\jw.ity 01' t l ic Niy . im ~ q ~ u l a c c . ; I I I ~ this is to sa! 1iior.c nl~oul tlic

perception of the s i i C ol' this ecc lno~nk policies :1111ong the

Nigcrian populace.

The problem ot' government o\\nccl cstablisliment. g ~ d u a l l y

drowriirig due to l?na~icial ~ i l i s~ i ia~iagc~i i t '~~~, lulce\\wm nltituclc lo tik,

political instability lack u('accou11lability etc, In specilic terms, s i ~ i c e the

incepiio~i oI' I'rivatisntion and Camrncrcial isnt ion in t hc country and their

eventual take olt; nia~iy Nigerims arc yet to gasp and 01- understand the

problems arid prospects. 'IIwcli)rc \\*lia[ arc. h c 111-oblerns and prospects

of Privatisatioti and Co~nmercialisatiol-r politics?

1.3

I .

. . I l .

. . . I l l .

IV.

1.4

1.

. . I I.

... 111.

IV.

What are thc rcnsons liw I'ri\~atization and Cori~mcrcial ization it1

Nigeria?

Whar are the problems 01' I'ri\.atizatio~i and Cotii~nercialization in

Nigeria?

What are the prospects ol' I'r.i\latization arid Cor~~~nc~-cializatirn in

Nigeria'?

Does the clangling alicl sliaki~ig, pol irical tcrrairi a l k c t the mouth

and successful i~npltriientatio~~ (11' the exercise'!

1.

. . 11.

... 111.

iv.

\I .

1.6

illto tlic I ~ I V ~ I C I I I S a d prospects.

the research to gain all irivalrrablc kriowlcclgc by assessing alrcacly

doci~iiiented lnnterials 011 thc subicct uiattcr.

To Iind out wlietlier pi\.atiration a d co1ii111~1.ciali7ation arc viablc

econo~nic politics in tlic countrj'.

To increase the voluliie ol' litel-ature alreacly nvailablc on the

subject 1113tt~r.

As well as scwe as a kind 01' iiilimiation ~.escr\;oir l iw rcscarcliers.

SCOPE OF THE STUDY

The scol~e deals Lvitli I k g I ~ I C I I - O ~ O ~ ~ S , atid [lie ~cipondents have

1.7 1 , l Ill l'l'Arl'ION 0 1 7 '1'1 I K ST1 IIlY

'l 'l~c 111ost limiting I';ictol- oi'tl~is s(i~d!; is t l~c "I.:tggctl" nat111-c ol'tlic

privatization and coint~~crcializatioti cfSect on the cconomy. It takes a

long timc !'or thc cl'l'wts ol' a privatized and co~nmcrcializcd

establishmctit to be felt within the economy.

Anothcr limiting factor is the fact that the excrcisc is still an on

going one malting it diIlicillt o r ~ht. wl~olc privatization and

commcscialization effects on the ecolloniy to bc arliculatcd.

Lack of co-opcraiio~l among respondent resulting to inadequate

information is encountcred as well as inadequate finance, insuflicicnt

time that would have allowed in-depth research investigation and

consequently gathering large information on the issuc at stake.

structirral adjustment p.ogi.ariiriie (SAP). I t would be recalled tliat unlike

in the sixties when ngriculturc \\/as h e lilain stag i l l the Nigerian

economy. The early sc\witics cal-ncrl lijr Nigwia I~uyc cl.ilde oil revenuc

at a level tliat was never anticipatccl. 'I'linl devclr~lment got gwernrnent

involved more \?lit11 widely rli\wsilierl ilivestnicnts iii arcas tliat spare

both the trxditional public scctoty ;111cl csclusi\lc p-i\.atc scc~or Lx~sinesses.

One of the ways to elnpliasize the strengths and of'l' Inad the \veakncsses

in the public sci-vice i s [llc pri\.ntimtion approach.

Acccmling to Olic~.ekc (199s: I I ), i n the 1086 Budgct Speech, the

then President Ibi-aliim I3adariios 13aI~angitla (IRB) annoirnced the

ca l l cd 1'C PC'.

establish~nents are traclccl o\'cr h c stock cschnnge \vitli tlic TCPC/BEI3

supervising such trading. Such c~iterprisc must nicet the requirements ibr

listing or tlic capital niarkci.

I n public offer tiw salc, tlie1.c i s 311 el'liwt to equalize geoy-apliic

spread of ownership or the shares of privatized enterprises. I-lence there

is an atteliipt to allot sliares by statc o f origin si~cli that each state i s

adequately rtpresentd. 'I'lic aim is to cc~itixlizc sliarc o\wtrship in any

state. A total of 35 public enterprises were pri\?atized tlirough public

offer.

2.4 COMMERCIALIZATION DEFINED

'The privatization and Co~i in ie i .c iaI iza l io i i r)ccrec No.25 of 1988

provides the legal l iarnc\vork 1hr ~ h c implenlcnta!io~~ 01' [lie governlnent

dissatisfactio~i and lack ol' con~mit~iic~it compwccl to the private sector

leading to bribery and C O I . I I I ~ ~ ~ C ) I ~ ;IS \wII ;IS o h r numerous problems.

All tlic salnc, other clbviot~s rcnsws advanccd h r tlic gcnetxl poor

performance ol'these grwtlnmcnts owlied parastatals bcsicles the integrity

fiictor 01. :I c o ~ ~ u p t lv~l~lic S ' I ~ \ ; I I I \ is ~ l ~ t : it1~\;1 (.)I. i ~ ~ : ~ ~ ; t h i I i t \ , i n tlic

~ n : ~ ~ i a g c ~ i ~ c ~ ~ t : I I I ~ boa~.tIs 0 1 ' ~ I I L S C C I I I L ~ I - I ) I ~ ~ S L : S . I I. i s h c i l ~ y o h s ~ ~ ~ ~ ~ c . t i tha t

cvcry 11c\v I i i ~ i s ~ : ~ I \ \-hcrll~i, i I I ci1.i l ian bqins 11).

dissolving thc homis ol' all : I I S I I aid ~ ~ ~ ~ C I - I I I I I C I I ~ o\\r~ciI

c s t a ~ d i s l ~ ~ ~ ~ c ~ ~ ~ s : I I ~ ; ~ p p o i ~ ~ t i ~ ~ g . I I C \ \ I I I C I H \ W I . S t o ~ ~ q ~ l x c thct~i.. l'lic

civilian :IWI n i i I i tai-y A I I I ~ I I is [ I.;\ t iol 1 sees I I I C S C I X ~ : I I ~ S 01. a p p o i ~ i t ~ ~ ~ c ~ i t s :IS

patro~iagc lbr tliosc \ \ - I N ) srtppcwtctl t l i m ~wior to t;\lii~ls o\.cr t l l c malitlt: 01'

lca~lc~~sliip, l'lic :~ppo in t~ i~c~~ts arc l~:i~dl!~ c\ CI- lhsCtl 011 t l w i t . tlic ~ i i i I i t ;~ r \ ,

\\, ,IIO irsi~ally C O I I W illto ~ O \ . ~ C I . I I I I I C I I ~ 011 ;I co~wcti\ c ~ I : I ~ I ~ ) I Y I I ~ sees :HI c d y

necessity to ~.t.pl:icc tlie ~wvioris ~ o \ - c ~ ~ i ~ i i ~ l i t :~lyx~i~itecs a s parr 01' thc.

prograniliie to t-c~llovc or ~ - ~ t l ~ r c c co~-r-uptioli i l l pi11dic sc'ctor'.

111 addition, the so called irlstabilitjt ol'tenut-e did not fail to extend

to the top nlanagenient of ~licsc ~x~ras[atnls ancl cstahlisl~rnents.

111 fact [Iic post 01' CliicI' esec~~li\.c 01' tlicsc. c.sk~l~lis\ili~cnts Iia\ie

virtually becornc a 1ioticeal7lc appoirit~liclit \\~hcr-c. pcoplc are know11

because of' tlic post or positiu~l tlicy arc liolrli~ig and riot what they are

doing. Invariably, t l~c cl'lilct 01' instabilitj' can bc quite pr.ofi)urid in tlie

case of large public utilities. 'l'alte liv irlstarice; at tlie National Electric

Power Airthority (NEPA) no gwel.aI Iiialiagcr tias ever Iield of'lice for too

long. And the same i s applicable to its Uonrds O F Directors and the

positions ol' Cliiel' Executives. In tllcsc circulnstnriccs, plannins beco~iies

quite meani~~glcss, bccausc tach rlc.\v cl~icf' cscculi\lc. mlrl board mcn~bcrs

2.6 ISSCJES OF PRI\~ATlZA1'10N A N D

COI\I1MERCIALISATION IIE1jATE IN NIGERIA

, - I his issuc ol'pri~,a[izatiiw :~rirl c t )~ i i r l l c~ -c i ;~ l i / :~ t io~~ clchatc i n Nigcrin

came into being during the rcgimc of' tlic tlien I Ieacl of State, President

I blahim Bahangida. 'I'liis tool; placc c lu r i ng I1 i s I 086 buclget speech in

whicli he airlounced the privari~:irion ii11d ~o~i~llic~-clial imtion of pitbl ic

estahlislinic~its.

I-Io\\wes, this publicity saisccl a nunibcr of' issues in which

powerful economist and some \\ell kno\\w political analyst viewed the

issue of privatization atid cornr~iercializa~io~i from one perspective. I'he

philosophers, ideologists atid (lrl1~1- intcllcctuals it1 their o\w sce it from

nnothcr perspective. As a rcsult o l ' h clil'li.~~c~iccs i l l ~lit~irglit led to the

privatization and co1ll1iic1.ciali/:11ioti in \\liicli rllcy L-rnse their arguments

on tlie points of' inef(icie11cy a ~ i c l unl~rtrlictabilit!~liIit 01' lxumtatals, and the

bureaucratic and monolilhic structure of govc~~~~i ie l t t . This scliool stand

firmly on the hct titat public entcsprises I w c bcc~i colussal Ibi lures that

betrayed all aspirations and hopes ol'dcliiwing the good h a t is provision

of the ~ n u c l ~ needed goods 311d services as well as yielding reasonable

returns on their investments. 'I'lir!: I>lt hat tlic scale of' entities and

creatioti or a pcrlorma~icc orielitecl administrati\.c Iitnnngerilenl should

head to a significant i ~ n p r o \ ~ ~ i i c ~ i t in their tradition activities.

Not with standing a11 these, the clel'ect of this scliool of thought lies

in its undue cn~pli:~sis on 1i1an:lgcnicn~ principles wliicli ~nndc il ignore the

realities of tlie Nigeria11 political economy. To this school, it appears that

Privatization and subsid!. issilc, 111-i\r;rtir,atiun and Eco~iorliic Reco~wy

and a host of others to n~cntion but a f't.\v.

. - Privatization nnrl Sohsicly lsst~c

Tlie eliniiriation a ~ i c l or 1.c.lentio11 of' sul~sidics eslwcially on

petroleum became an issuc that was tlelwtetl ill 1987 when some

government agencies put up atlvertisc~iicn~ 011 (lie p111-ported magnitude of

subsidies on petroleum. The controversy wliicli emerged from the debate,

institution doubted the existelm of subsidy on petroleum, government

agencies hclsed heir ar.gi~rnc~i ts on ~~lohol pct~.olcum pricc di fl'erentials to

establish a case !'or thc esiste~ice ol'subsiciy.

While the controversy persists, h e 1988 budget cleverly handled

the issue by not taking a definite position wlietlier to eliminate or retain

subsidies to petroleutn atid agriculture. In spite of this no-clelinite stand,

few messages were deduced fimi the 1985 budget. One of such

messages is tliat subsidies may riot persist Ibr two lotig a time in Nigeria.

The budget also contained a co~iditional statement under E Y I I ~ C I I subsidies

will be conditioned - that subsidies should Ibllow the "principle of

resource allocation that takes into account the greatest good of the

greatest number". Budget speech, ( 1 988) to this end, the &wem~nent to

adopt the principle of ~.egulnr, periodic and flexible price ad.iustment with .-

r

sufficient concc1.11 for goods \.alut.d l i w ~noliev . 1~~ - thc customers will be

required among gove1.1111icr-tt cskhlisl11-tic~its.

In otlier \c;ords, thc subsidy issue iiivolves somc sinrple Aritlmetic

and its attendant problems - the adjustiiient 01: prices of goods in general.

For instance, tlie removal 01' petroleu~ii subsidy implied increase in the

price of petrol wkicli resulted to high cost of transportation, and the effect

continued spreading to other areas, t i l l the burden was firlly transferred to

the common man (i.e. the mall i l l tlie street).

Obviously, with the privatization and comniercialization exercise

subsidy or no subsidy, the prices of public goods and conlrnercial

enterprise goods may be reviewed upwards in due course. The main'

. s point to note here is that privatisation and co~nrnercialization implies..

,removal of subsidies at the expense of the poor masses as well as making

profit which will be of help in the provision ol' the things needed by tlie

poor masses as well.

Privatisation nnrl Con~niel-cialis:~tian of Economic Recovery

Another issue raised by privatisation is that it will lead to economic

recovery. This is one of the aims of the programme. But the question is

"will privatization actually lead to the recovery of the Nigerian

economy?" This questim has kept many Nigerian in a , tight corner in

which some believe it will not work, while some believe because of their

and disadvantages. I t hecomes clear then, that privntisntion, and

com~nercial ization alone cannot lead to any ecotio~iiic recovery in

Nigeria.

On the premises, good 111icl-o-economic policies it1 interest rates,

import license policy, I'oreign exchange rates; t a r i f f s a i d taxes are the

sine qua tion of the eco~lo~iiic recovery

recruit and retain si~i~nhle cluali l i t d pcsson~~cl

. . . I . Evolve a Inosc sesult-oriented ancl nccountnhle ~iianage~nent, based

on pcllbsmancc contracts.

iv. Strengthen financiaI/accou~~titig controls at the all'ected e~~terprises

v. Upgrade the ~lin~iagen~ent inl'or-n~ation ~!~s tc i~ i h e alTected

enteqxistrs

vi. Ensure financial solvency of the public enterprises though effective

cost recovery, cost control and p-udent ti~ia~icial management.

vii. Remove buscaucratic bottlcnccl.cs and pnlirical interferences

throu~li clear role dclinilions hct\\cc~i ~ l i u supcn-ising ~ninistry. the

board of directors and the nianagement of public enterprises.

2.8 PURPOSE FOR I'RIVATIZATION AND

COMMERCIAI,IZATION PROCRAMWIE IN NIGERIA

I. Restriction and realization 01' the pu131ic sector in ordcr to reduce

the dominance of unprocluctive investlnent in that sector.

. . 11. To ensure positive rctut-11 OII pi11dic sector investment in

PRIVA'l'ISING AND COMMl$RCIAl,IZING JIOLDINGS IN

CEH'TAIN EXIS'I'ING 1Nl)US'I'liIAL ENTERPKJSES

ACCORDING TO DECREE NO 25 OF 1988

'The 'Technical Committee on Privatization and Commercialization

(TCPC) was backed by dccsec No 25 oT 1988.

According to an interview granted by the tlicn Chairman of TCIT

i l l Enugu State, My S1yvcstc.r Tdoko, in Ilcccinber 15, 1988 the then

military Governor oS the defimct Anambra State inaugurated a Task force 1

to revitalize government companies were in a very bad condition

The taskforce continued its work on revitalization until March

1991, when the government directed them to start privatization and

com~nercialization of those cornpanics listed by the Edict. l'h is task f'orcc

Functions of the Conr nli ttcc

Among the Ii~nctiotis or this co~iilnittee as slipulated i n its first report are:

( I ) '1'0 ensure tlic succcss ol' tllc pri\.atisalio~i and c o r ~ ~ l i l c r c i a l i z a ~ i ~ ~ ~ i ~

exercises, taking into account the need hr balance ol' m e a n i ~ ~ ~ f u l

participation by Nigerian and I'oreig~i interests in accordance with

- the relevant laws i n Nigeria.

(2) To oversee the nctilnl salc of' shorcs of cntcrpriscs conccnicd by thc

issuing house in nccorcia~~ce with the guiclelines approved by the

federal 111inistry guver~inlent.

All the same, the co~n~nitlee i s faced within onerous task d' selling

all or part of gove~*n~nent's equity Iwlcli~y on its pmstatals hotels, food

and beverages, br.e\\wics clistrihulio~i. electrical appliances. and non-

the sale 01' governnwnt assets or h c privatisation ol' public sector

enterprises is not new in Nigeria. Indeed, pt.ivatisatio11 was a Itcy element

of the Structural Adjust metit Progra~n~ne adopted by the Nigerian

Govern~iient i n 1956 to stabilise tlic ccor~o~i iy and position it Tor

sustainable gro\vtli. 1 1 1 that lirsl round ol' privatisation, governtilent's

shareholding in hanks, cement companies, oil marketing coliipanies and

Iiotels were divested ~naitily t l ~ ~ w g h ol'l'ers Sot- sale on the Nigerian Stock

Exchange.

What i s new in thc otigoing pt-ivalisation process is the courage and

determination of the governments to extend to the utilities (power and

tlie utilities, tlic airways, the petroche~nical plants and the refineries, have

such, the sector has assunlctl i l i i~~ ic~~sc political inipcxtancc n4li the rcsul t

that a change of ow~it'rsliip c'oi~ltl have wider ramificatiotis tvhich could

be politically expensive. In ncldi tioii, the level or waste, ineSliciency and

dependency on the national treasury that cl~a~nctcrise most of the

enterprises now being privntisecl, Ihr cxceeds tliose o F the enterprise

earlier privatised. Furthermore, the sheer sizes of the enterprises relative

to the ~narlcet capitalisatio~l of the local stock market and the need for

specialisecl skills to nianapc tlic cntcrprisc prolitabl y, mean looking

beyond the shores of Nigeria Ibr investors.

Consequently, the ongoing exercise suggests that its design and

implementation must meet certain international standards if tlie exercise

is to be successti~l. The thee broad areas are:

( i ) lransparcncy ol'fl~c. cxcrcisc

(ii) tinling o f sale. arid

( i i i ) the clual stlvcturc

of a level playing licld \vliicli Iiclps to huilti support liv tlic ~viva t i sd io~~

process.

In N i p i n n cnsc, the priv:~tisatio~l 131-ocess 112s bccn largely

transparent in design and so Iiir, in i ~ ~ i l ~ l c ~ i l c ~ l t ~ i o ~ i . 'I'liis opinion derives

from the following:

(i) the enabling legislation, the guiclelines on the pl-ivatisation and

. co~iimercialisatic.rn IN-ocess and the blueprint of the programme

are contained in a privatisfition ' l~anclbook published by the

govemrnent which i s widcly circulated to tile general public;

( i i ) advertise~nerit Ibr expression or interest by core groupistrategic

investors in the ente~prisc to be privatisetl we placed in lintio~lal

and internah~ial ticwspapc~.~. Competition is encouraged in

order to secure the best deal. 1-his has ed to investors

outhiclrling one anotl1c.r ill rutlcr to scc'ure tlie corc iri\:cstnr

positio11, \\ hic'li atso [ I . ; I I I Y I : I ~ C \ to Iiiglicr \ ; \ I L I C liw pu c ~ m i c ~ i t :

( i i i ) n d w k m c n t 1iw c\p~cisioii r~f'i~it~rt'st Inv p~.oI'cssimal advisers

arc also paid i n iiatioiwl a ~ d intc~-n;~l ioti:~l tic\\ spalwrs. O n l ~

LKII iscrs/conlractt,~s hat a~.c ~-c'gisfcrccl ( 3 1 tlw I3ur.criii oS I'ul>lic

I'nterprisc ( 1 3 I ' I . 1 31-c clipblc l i ~ r cc~tisidcratio~i ns pri\.:~tisation

xi \~isc~x;

(iv) the use of intelnatio~ial privatisation advisers pn~ticularly Sor tlie

mort cotnplcs iliantlarcs - lllc utililics, tlic lilt-tiliser conipanics,

tlic airways and tlic ~.cli~wics. 'Ilic iri~c.ruatio~~:~I advisers

co~nprising investment banks, lawyers and other consulting

tirms are being engaged to undertaltc strategic review,

rest~.ucturing and sale preparation lbr tlie afSected enterprises;

(v) tlie offers are widely publisliecl using natio~ial newspapers,

~ d i o s arid television. Applicatio~i forms are ~videly distributed

using local govern~nent otlices. state inveslinent companies,

post of'liccs. Nigcria~i Mission abroad, etc in addition to the

co~lventional branch iietwol-It ol'ba~ilts a d stockbrokers; and

(vi) allotment of sliares is to be guided by gwernnient policy of

\vide geograpllical sprcacl o I* on;nership. All allotments are also

to be pi~blislied in natio~ial newspapers.

lkspitc the : ~ h n v S ~ I I I C ~ ~ I I V S hich ha\ c I ~ C C I I pul ill place to CIISLII-c

that pri~.atisatioti proccss is trnnslwrent. tlicre Iit~s I w l i cla~iiour tio~ii

certain cluark~-s (incluclir~g ot'licial qual.ttx) t h a ~ t l~c p~nccss is indeed, not

transparent. This is 11ot cnt ircl) s ~ i s i ~ i as the process has

ii~~l'o~~turlately Iwen clia~.actc~.isccI I>! conflicting sipals, ~wersals 01'

decisions or erfen a chnllc~~yc 01' tlic legal a d xlrni~iistrnti\ e authority for

decisiv~i taltei~. For i~~sta~icc. tlic i c p l Ii-a~ne\vorli for h e Imyramme, the

Public Entcrprisc (I'riwtisntio~i nncl C'omnicl-ci:~ l i s a t i ~ ) Act of 1 999

wliicli was pro~nulgatcrl by tllc last 11iilit:u.y govcr~wierit, has been openly

criticised by some legislators. In addition. n cotniiiittee of the lower

house Iias scheciuled a public hearing on the clioice by tlie National

Council on I'rivatisatioti (NCI") of n corc investor thr an oil marketing

company.

Timing of Snlc

In this rcc&aal.d. it is ahsolutcly i~iiportant that early sales succeed as

this helps to build momentu~ii for tlie exercise. This suggests that the

programme should logically begin with tlie sale of the easy candidates

first.

More specitically, tlie Nigerian Economic Summit Group (NESG)

had in its I998 Report recomtnendcd t h n t the go\Je~n~iie~it should achieve

All the same according to T-oh Acleola in his write-up the

programme has now been classilietl into tliree i~nplementatio~i phases:

Phase 1: This inclucles l i ~ l l di\~cstincnt of shar-cs in oil marketing

companies. banks and cenient plants t h t ;w already quoted on the Stock

Excliange

Pliasc 2: Full divestment oTshares in hotels, vehicle, assembly plants and

other enterprises operating in competitive riiol.kets \diere no regulation of

price or market behaviour is ol'pri~nary collceni to government; and

( i ) 'l'ransl'cr- of'subs~at~tial cquily staltc plus management control o f

Strategic Investor

Federal Govem~nent

Nigerian Inclividuats and Associates

Partial I'rivatisation Steel Rolling Mills -- - - - - - - - - - - - - . . - - - - - - .-

Air and Sea 'l 'rawls Partial I'rivatisation

Ferti Iiser C o ~ i i ~ a ~ ~ i c s

I'artial Privatisation Par.ti:~l I'rivatisation

Full Privatisation I A w i c a d Livestock I'roduction - -

Salt Companies w o o d and ~ w n i turc co~i lpanics -

tnsumnce Companies 1 Film Production atid Distribi~iioti

Full Privatisation 1, 17ull Full Privatisation Full Privatisation ---

Flour Milling - - -

Full I'rivatisation Cattle Ranclies Full Privatisation

Full Privatisation Full P~.ivatisc?ticm -- -

, 1:uIl I'rivatisatio~i

~. . .. . - . -

SII=C'I'O 1< - - . - . . - . . . . . - . . -- . . .

Rivcr h s i n Ikvclojmicrlt A[~tlivrity - - . . ~ - - -

Nigeria11 - . - - I h i . lwav - - - - - I . .. Corposation . .. ~- .~

Nigcsian . Ail-ports - - - . - - Autliot-ity - .

National l!lcctsic 1'0wc1- ~ u t l l & i t ~ . . - --. - . - -

Nigcria~i Security l ~ i i l i ~ i g ; 1 1 d

Associatccl Ores Mining Co. Ltd -- - - - - - - -- -

Nigcsiati Mining Corporalioti -- - - --- -. -- - --

Nigerian Coal Corporation - --

National I~isul-ancc Corporation of Nigeria (NICON) - - . --- - - - - - Nigerian Reinsurance Cor~oration

National I'ro~erties Ltd Tafawa J3alcwa Square Management Cotnrnittec -- - .- . -. - - - - - - -- Nigerian Posts Authority

I'artial Com'mcrcialisatir

Partial Co~n~net-cia1 isatic Partial Co~nmcscialisatit --

Partial Commercialisatic --

Partial Commercialisatil

Full Commercialisatior

Full Commercialisatio- Full Comincrcialisatio -- --

Full Commercialisatio Full Commercialisatic

Soarcc: Dr. 11. R. Zayprtl f 1992) Economic Derllncratisation p. 24 - 26

2.1 2 PI<lVArTISATION SO FAR

In thcir submission, thc publicity sub-co~nmittcc on Bill Clinton'?

visit in 1999, the following observations wcrc made.

stake Iiolcliny in somc hanks aurl i nsuraticc co~npanic.~ as part of the

phased in~plementatioti ol'the progralilnie.

So Far, tlie present arlmi~~istratio~i led by President Olusegun

Obasa~?jo has den~onstraterl its commitment to the ongoing privatisation

exercise. The acl~ninistratiot~ within t\\w niouths ol' coming to power set

up the National Council on I'~-i\~atisation (NCI'). chaired by tlie Vice

President, Alh,?j i Atiku Ahuhnkar to i~~~dcrscor-c the seriousness attached

to the implementation of the programrile.

rests with the Bureau of' Public En tcrprises' (BPE), headed by a Director-

General. 'l'he RPE carries oil( all activities I-cquired Ihr the successful

issue of shares and sales assels of' h e public enrctp~.ist.s lo be grivatised.

I t also makes recomrnenclations to the council on the appointn~erat of

COIISU~~II I I~S , advisc~~s, i I ~ \ W ~ I I I C L I I I ~ : I I~~<c ' I . s . i s s t ~ i ~ i ~ ~ 1 0 1 1 8 ~ ~ . stock broken,

solicitors and other prol'essio~inls required !'or the purpose of privatisation.

The government also c~iacte~l 011 e~iablirig legislatioti, public

Enterprises - Privatisation and Con~mer-ciai isat ion Act 1 999 to provide

the legal framework in adclitioti to listing a set ol'guiclclines to ensure the

success of the progralnme. The guirlclincs ~~rovicle Iix

enterprise in Nigeria and Inte~mational Media

2.13 BENEFITS O F FRlVATlSATlON AND

COMMERCIALPSATION

( i ) Developing competitive real sector ot'ferings relatively better

services and p~.otlucts

(ii) Improving enterprise eriiciency and performance tl~roiigh

competitive matlagcnwnl

(iii) Incentive to access capihl know how and ~narkets which pennit

gro\vth

(iv) A inore efrective co~*porate control \villi improvement in the

[ask assessnwr and pc1-lb1~111cc

(v) Broadening and deepinp capital inarkets

2. I4 PROSPECTS OF PRI\'A'l'ISATION AND

COMIP1T:IICIALISATIC)N IN NIC; ElXlA

The thing that have led to (he privatisntioti and co~ii~iiercialisation policy

i n Nigeria Iiavc caten tlccp iello the dclvis ol' our ccotioniy. In the ligli~ of

this, the li~ture prospects ol' this escrcisc include the attitude of

governments in Nigeria towartls Im~glmirncs started bcl'o~-c they assume

poorer such attitudes as cancelling almost as a reflex, progranirnes

commenced by their prcclcccssors.

Moreover, 111;lny rears are beitig expressed about sale of

government's assets and ~.corgai~isatioti of Fcderal Government

Enterprises to co~nme~~cial parastatals, In one dimension, it is argued that

assets govemrncnt could not realise the f i r l l \ d u e of, profits, and

undefined nietliod ot' dete~-~iiii~i~ig the \\.ortli of such establishments. On

this note it is argued that only tlie most inlluential and affluent few

among tlie citizens could get tlie access and means to buy these assets.

According to this line ot'tlii~~king. it is like mbhing I'cter to pay Paul.

Still others argue that i f gavel-titnent losses control ot' certain sectors of

the economy. tlic cxpcctcrl t i pal-\kipation may riot be

the pscsence and scrious~icss of tlic st it n u l i in \\wliing 1br private prolit.

2.15 PR013LEMS 01; PI<I\'ATISATION AN11

COMMERCIALISATION

R nur~iber of plnhlen~s tciitlccl to constrain tlit. implenientation of

privatisation and c o ~ i ~ ~ i i c ~ . c i n l i s a t i ~ ~ ~ ~ programme i n Nigeria.

Accoscli~ig to Obaclan (2000: 58 - 62), some oi' (Ilc problenis are as

fol lo\cs:

consideratio~ls have proviclecl a basis Tor both arguments for and

against privatisatiou. While the argu~iie~it in ii~vour of the

exercise is hinged or1 seducing the ~-olc. of gove~mient, the

contrary urgu~nclit ;ga i ~ s t pri \!i~tisotih has ;llso heal hascd on

taming the lnarket aticl expancling the I-ole oi' h e state. Thus, to

( i i ) U I I ~ C o i ~ ~ ~ i i o l ~ ~ ~ i ~ l I i . ~ ( ~ / i o l ~ , rh~w c ~ i s t s / / l o ~ I I ~ ? I ~ ~ I I I of' not

were to resell n pqwrtiori ol' their S I I ~ I - c s to the public. But a

nurnber of tlie~ii have not couipliecl wid1 this ptwondi tion e.g.

the New Nigerian Salt Co~iipany Li~iiited.

(iv) T I J O I . . I i i o i t . All any prospective

equity sharcliolclc~-s did not lia\~c cnougli l'irnrls to process their

application l'w~iis, contrary t c ~ h e ispectnt ions ol' pnverliment

perceiving the prohlem of linancial li~nitations; the government

had di~cctcd ,111 lictmcd con~mcrcial h i k s to cxtcnd credit to

all interested persons. Inspite of this directive the banking

system did not respond Savourably. Tlic linancial problem thus

shareholders distributioli. Eflbrts are being ~iiade to increase

publicity and public eriligl~(tn~iie~it so as to ensure that the level

of participation is i~icseased consitle~*ahl y in those areas lagging

bell i nd.

( l ~ i ) T1lcr.c. is olso rlrv / ) r c h l c . r r r ~ I / ' ~ I ~ ~ ~ I ~ ~ O I ~ ~ , P I I I 17.1~ l i ~ h o r ~ ~ : A subset

of the group \vho cyqmseetl pric~~tisatio~i on the ideological

erouncts are those \vlio belic\lc that they are anti-labour, as it L

will inevitably lead to massive I-etrencli~iient

(vii) I ~ m d q ~ m t e R~cord Kcepin~. The Ministry of Finance

iricorporatecl (MOT;!) the primary institution in charge of

goveniment investment. has serious problems o f incomplete

I-ccol-d keeping. This arose partly because other ministries and

clepwt~iieti~s oS govcrri~iient olieli ivcllt aliesd atid undertook

2.16 SUMMARY OF T1lK I iEVIEW O F T H E RELATED

l i teratures kern

the Teclinical

Committee on Privatisatioi~ niiil Conlmei.cinlisntion (TCPC), Bulletin,

paper presentation, internet, etc.

However, it takes the recognitiot~ of the concepts of privatisation

and conimercialisation in which tlie di l'krerit deliriitio~is of the two

concepts were taken into consitlcration.

The accouilts of tlie reasons ibr ~ri\~atisation and co~ii~~iercialisatio~i

were also meiitioned. as e l as rile issues of privatisation and

commercialisation debate in Nigeria. ideas and criticisms of the two

scliools of tliouglit i.e. the Mannge~iient pliilosophy school of thought and

tliscovercd that sale ol' go\ ernnicut nsscts i s not a nc\\. thing in Nigeria,

rather it involves the translkr ot'assets li.0111 tlic state to the private sector

and For this ongoing exercise to be n reality both its design and

impleiiicntaticm ~iiust ~ncct certain i~itc~watio~ial stnlldarrls \\hich

e~iibraces three broad areas i.c.

f Transparency of exel-cisc

4 Timing of sales and

5- The deal structure

The scope of Nigeria's privatisatiori arid co~~i~iiercialisation

programme is also mentioned in which tlie names of enterprises meant for

either partially or wholly privatisecl or conimercial ised were also noted.

Privntisation so far i s taken into recognition in which the present

administ ration led by Presitlcnt Olusegu11 Obasanio has demonstrated its

c o m ~ i i i t m e n ~ to the o n g o i ~ i g cscrcisc \\hilt the hcnclits. p l -cqxxts and the

problems that constrain tl ic i ~ i l c ~ i c ~ i a i t ~ i 01' pri\:ntisalion and

co~umcrc ia l isation o t' pr-i\.alisatiw ;~ritl con i~ i ic rc ia l i sa t im I w y n m m e in

Nigcr ia i s also taken into consi i lc~al ion.

I<I<FT:l<INCT3

Odife, D. 0. ( 1990). ' 'l~riva~izntio~~ in Nigeria:." Concepts, Issues and

Moclnliks L,;rps: Gt~nrdin~l, Augi~st 20.

Okcreke, C. 0 ( 1988). " Privaiizatiori ard C701iirnet-cializatit~tl Process and

Methods," Awlta A paper Delivered at ICAN, MCPE Programme.

Kay, J. and Thompson. D. (1986), "Privatization a Policy in Search of

Ratiotial:", Ecotionlic J O H I - I I ~ I VOI. 96.

Federal Government, ( 1 988). volulne 75: Privatization and

commercialization Decree No. 25, Federal Government Press,

Lagos: July 16.

Mbanefo, J. C. (1987), "Privatization", lcori News April -June.

Otobo, E. E. (1998), Privatization and Regulation Africa:, "Some

Key Policies Issues", DPMN Bulletin, Val 5, No. 1 December. Decree

No. 25 of 1988

Sanusi, J. 0. ( 1 989). 'Trivatisn~iori ol' Public Enterpl-ises", a n Address

Delivered to the Akoko Diocesiau Synod 011 May 26.

Anetii, A. Y. (1997), "Funding a Multi-Rillion Naria Ol'ganization

Gachi, M. S. ( 1988). "l'~.i\:atistion nl' Ibrblic En~ct-p~-ises, who sliould

Buy:," National Concord, Thu~.sdny, October, 6.

Falami, A. V. (1988), "l'riv~tiscl~ion \von't Work,'' Sunday Concord,

August, 14. Decsce No. 25 of' I 088

Adeola, F. The Privatislic~n 1'1.occss i t1 Nigeria: IW-ieved on 3/23/2005

on the Website: I:ilc:// A:\ 'I'i~c 20 I '~.i \~\t izi[io~ 0/; 20 Process % 20

in % 20 Nigeria. I-lftii.

Zayyad, 1-1. R. ( 1 Y E ) , "Eco~io~nic De~iiocratization." Printed in Nigeria

by Newpak PIC Kaduna. Nigeria.

Privatization so far: Courtesy ( 1999): Publicity Sub-Co~n~nittee on

President Bill Clinton's Visit Retrivecl on 3/23/2005 on Website:

File//A:\ Indcs. 1 Ilru.

3 2 RESEAI<CI-I DESIGN . . The rcsewcli desig~i sc~-vcs as the uieans tli~vugl~ \vliicIi the and/or

itiformatiori or this study \\*crc collcctcrl. 'I'his c l i a l ~ r is divided into

different sub-headings, this is to enhance tile understantli~lg of the various

stages of the means through which the data were sourced. They are as

follows: ~netl~ocls ad sources of data collection, pop~llaticm Ihr the study,

determinatio~i ol' snmple size. \~~lidnlion and rel iabi l i ty of data

instruments and rtietlirrtl ol'rhtn analq'sis.

3.3 METHODS AND SOCIRCES OF DATA COLLECTION

111 the riiethod of data collection. the study was designed.in such a

way to enable the researcher sample the opinions or different people from

1(1 thc

irlcas,

arid

respondents to the particular questions

(2)Dichotoinous questions i.e. tlie YeslNo type ol' question. This gives

room for tnTo possible optio~is; i t is aimed to making the answers easy

for the reslwnclents and also gi\,c lil t lc opportunity fbr bias.

(3)Multiple-Choice qirestions, \vhich ~ l l o \ v the rcspo~idents to choose

fioni an nrtay of suggested questions that best describes their own

suggestions where possible.

In addition to tlie use of' questio~~mire, the rtsearcl~er personally

interviewed some top executives of'botli the private slid public sectors in

Euugu metropol is.

individuals selected. 'l'lie researclicr used the statistical tirniula devised

by Yanietw .I ( t 964) to rlcte~-mine the smple size. The formula states

Ihus:

11 = sa~iiple size

N = poplation Ibs the study

e = rnargin of'esror. I11 this study the margin oI'c~.ror i s 5%.

'Tliel-elhre, in substi tuti rig the above Swn~ula, \ve obtain

Therefore, the sample size for the study is 300. and based on this,

a total of 300 questionnaires were printed atid distributed to the

respondents who were randomly and systematically selecled.

So, to ensure adequate and proportional allocation fbr these 300

questionnaires, the researches used the I3owley's psoportional allocation

technique. The formula is thus:

where;

n = sample

N = popidation for the study

nh = Number of Individuals used tbr the study

For the individuals used (i.e. h e Academicians, Top Ministry

OfficiaIs, Bankers, Private and Public Sector).

3 7 METl-101) OF D A T A ANALl'SlS L .

This study dealt i tllc issue 01' Privatisatioti arid

Commercial i s a h of Gcrve~*i~~~ie~i t owned Establisl~t~ie~its: Proble~m and

Prospects.

V i e tools used in analysit~g [lie data include: 'I'ables, Simple

percentages and nbsolrrte numhcrs.

REFERENCES

Yamene, Y. (1964); "Statistics": An Int~.oducto~y Analysis; I-larper and

Row Publishers, New Yorlc

CHAPTER FOUR

PRESENTATION, ANALYSIS ANI) l N r l l l T A N OF

I

DATA

This chapter deals \\fit11 represcntaticm, analysis and i~iterpretation

of data collectecl Iiw the stud!.. 'Ilw lwsc~irat io~~ arid ariaI!.sis were based

on the responses got l'rorn tlic r~sp~t~cI t '~ i t s cll-a\\.n li-om both private and

public institutions though tlic questiotinairc and oral interview. These

responses will be presented in tables and si riiple percentages.

Ge~ietnl l y speaking, a total ol' 300 clucstiunnair-es wcrc clistri buted

out of which a lohl ol' 280 werc. rchrrncrl I-clmscnting 03.33"/0. But out

of this number 280, 4 were rqjectcrl \\liilc the I-eniai~~itig 276 were

accepted and used for the analysis. The re.iection of'tlic 4 questionnaires

was as a rcsul t of i~i~proper li l ing 01' docu~iie~~U Table 4.1 belo\v shows

the distribution, completio~i and IY~LII-11 mtc o l'the questionnaire.

Ti1 ble 4.1 Distributiot~ and Return Rate of the Questionnaire

Number of questionnaire distributed

Number of questio~~naire returned

Number of questionnaire not returnecl

Nuniber of questionnaire rejected

Number of questiontiaire hr analysis

Perccn tage

-

100

93.33

6.67

1.43

98.6

SIN

IJncIer 5 years 76

5 - 10 years 4 0

1 1 - I5 years 20.29%

service put in by the ~*espondents 76 (27.54%) I-cspondents replied that

they had been in the service for less than 5 years. 46 ( 16.67%) indicated

that they had been in the service h r 5 - 10 years, 56 (20.29%) replied

also that they had been i n the service Ibr I I - 15 years, while 98

(35.50%) confir~ned that they had put in more than 15 years.

+-

Frotii the above table 4.2, the scscasclie~~ dectiw! i t necessary to get

her itiforniation ti-om those h a t I~ave served tlicir vasious t.stablisIi~iients

for many years because they stand a better C I I ~ C C to si~pply the needed

and authentic infomation.

- a - - - - -- - - - - Total

I

-- - - -- I 00%

Table 4.3 tio on Showing Rcsponrlents Position -

Options 7 No. of Respondents "/t of Respondents

Se~~io~-/.l~r~~iorLectut-e

ManagerIDirector

Head of' Stal'f

Total

93

167

16

I According to table 4.3, 93 (33.70%) I-espondents sliowed that they

belong to the Senior/Junior lecturer level, 67 (60.500/0) confinned that

they belong to the ManagerIDirector level, while 1 6 (5.80%) indicated

that they were heads oC staff at various levels.

So based on the responses above, it is the researchers opinion to

believe that there is a good distribution of different positions which is

needed in any viable establish~iient.

Table 4.4 Distribution based on the Awareness of Government Policy on the Privatisation and Commercialisation in the Countr

From the above table 4.4, 256 (92.75%) respondents agreed that

SIN

No

Total

they are aware of the government policy on privatisation and

Options

20

276

No. of Respondents of

7.25%

1 0O0!

co~iimei~cialisation in the coutilry \vl~il t . 20 (7.25%) respondents indicated

that they are not aware of it.

Therefore, thc rcscal-cher conclurlcs that a large nunibers of

I-espondents arc aware ol' the polic.1. hasccl or1 tllc inti~r~natiori li-om the

above table.

Table 4.5 Distribution showing thc

3ptions

-

zosteri~ig and suslaining the

:fficiency and effectiver~css ol'

.he organisation in Nigeria

Allowing individuals in the

society to buy and operate

govetwment establishme~its

Creating an atniospliere ol

private ownet-ship and control

of existing organisations in the

society

Deregulating business i n tlic

society

All of the above

Total

Policy on Pt-ivatisation and

Vo. of I<cspondents

,. . Fro111 tlic abovc tahlc 4.5 an;ll\*sis. onc could s w that 43 ( 1 5.58%)

respondents sees tlic policy ou privatisation arid commercialisatio~i as

fostering and sust:lining tlic cl'licic~icy am1 cflkctivcncss ol' the

orgaiisatim i l l Nigeria. 33 ( I 1.969'0) I-cspo~ldcnts sec tile policy as

allo\vin~ itidi~~iduals in t l~c society to h y and operate govemriietit

establislimelits, 19 (O.SSN) ~-espo~iclents sees i t :IS crwting a11 atmosplierc

of private o\\wersliip a~icl co11l1-01 of existin? oryaiiis:itiui~ in the society,

then 3 1 ( 1 1.23%) rcsponderlts also sees it 4s Dcrcpulnting business in the

society, while 150 (54.35%) respontlcnki is ol'tlic opinion that they agree

with all the opinions.

Theretbre, one could conclude tliat all the above policies should be

adopted since ~najority of the responclents attested to tliat.

Table 4.6 Distribr~ tion on Priva tisa tion ; ~ n d Con1 mcrci;llisa tion as I-laving

Table 4.6 above shows that 150 (54.35%) respondents indicated

that they see privatisation and com1116rcial isnt ion as having the problem

of implementation arid npplicatio~i ill Nigeria, ivliile I26 (45.65%) gave a

negative response sl-rowing that 11it.y do IIOI see it as t~aving the prohletn

of implementation and application in Nigeria.

Therchre, liom the nhm-c a~ial!?sis one cc?n conclirde that it i s

having the problc~n of i~iiplenicntatioti aucl application.

Close ~iioni toring, and

supervision of'thc policy

Continuity of the

progratnme policy

All of the above

- - - - -. - - - .

Tota l

No. of Rcspontlcnts '% o f Responclcnts

Table 4.7 above, shows that 83 (30.07%) respondents suggested

that the solution to the problenis of implementation and application is

close monitoring and sul~ervisio~i ol' the pol icy, 6 1 (22.1 0%) respondents

indicated that the solution to it sl~oultl be conti~ii~ity o f the programme

policy while 132 (47.83%) respondents suggested all the above options.

Therefore, the researcher concludes that al l tlie above options

should be adopted.

No. of Kcs~ondtnts "A, of Respond(

that privatisat ion and cotnniercialisation ha\.e tlic prospects of ~wamp ing

the nation's ecolionty by wsuri~ip elliciency a~id el'l'ectiveness tlilaugli

ownership and control oS organisatious, while 1 9 (6.88%) indicate that

they are not of that opinion.

From the above table, the researcher concludes that privatisation

and coriimercialisation have the prospccl 01' restructuring, rather renewing

the - nation's econorii y by gtiarmteeing el'ficicricy and etTectiveness8

through ownership and contrcd of' tlic organisations by the private sector.

Table 4.9 Distributiori showing the Proldtnis of Priviltisation and

Options

Non-c,onipl iance with sale

term

Inadequate record keeping

Antagonism by labour

All of the above

Total

No. of Rcsl~onclc~i ts

Table 4.9 above shows that 74 (26.8 I %) respondents confirmed

that he problem of privatisation and co~~i~iiercialisation is as a result of

non-compliance with sale term, 57 (20.65%) respondents indicated that

the problem is inadequate record keeping, 62 (22.46%) respondents

agreed that the problem is due to antagonism by labour while 83

(30.07%) respondents replied that h e programme encounter all the

problems listed above.

So based on the responses above, it should be noted that the

progratnme encounter all the problenis as shown from the table 4.9

above.

Table 4.1 1 above sliows that 12 (4.35%) respondents indicated that

the reason for privatisation atid comme~~cialisatio~ of government

establishments in Nigeria is as a result of gove~mlent owned colnpanies

have not been doing well in the various facets of management, 21

(7.61%) respondents confirmed that it is dtre to lack of profit and general

poor performance, 10 (3.62%) respondents replied that it is as a result of

mismanagement and incompetence. while 233 (84.42%) respondents

strongly believe that it is as o result ol' all the above reasons.

Therefore, one can conclude that all the above options are the

reason why the government embarked on the programme since majority

of the respondents attested to it.

Table 4.1 2 Distribution showing Privatisa tion and Corn mercialisation having the Potentials of Private Participation with attendant Competitiveness leading to a More Vibrant, Effective and Efficient Delivery of Goods and Services amon 'egan isa lions

Table 4.12 above shows that 213 (77.17%) residents agreed that

privatisation and commercialisation had the potentials of private

participation with attendant competitiveness leading to a more vibrant,

No. of Respondents

B I No

Total

Oh of Respondent

63

276 '

.,

22.83%

100%

CONCLLISION

5.1 S U N ~ ~ I A ~ W or; r;rNnrNc;s

In this c.1iaptc.r tlic ~~csc:l~dicr ~ ~ s c r i t s :I colicisc summoty 01' h c

findings of thc study. l'sscntially tlic I-escasclior ~~ndcrtoolc a

comprehensive study of' tlic Privatisatio~i and Cornnitrcialisatinn ol'

Government-Owned Establish~nents: Problems arid Prospects.

Consequetitly. tlic l'ollowing titiclings \\we niade: the inlormation

obtained fi-0111 the study indicated that a large nuniber of respondents

were aware of the ongoing psivatisatim and co111 tiiercial isation, when it

came into existence as well as the policies.

Furtliern~ore, tlic Iindings i~idicatod that the progranime ~iiiglit have

a problem ol'imple~ncntatiw mcl application and suggested solution was

also indicated.

It i s also noted that tlie lin~ering political party has an effect on it.

It made mention of the perception and appreciation of the policy among

Nigerians which is indicated to be on lie average side.

All tlie same, the findings also shows that the progralntne has a

.. tremendous prospects ol' 'est~uclut-ing the nations economy by ensuring

efficient and effectiveness of tlie business environlnent which have the

potenhls of private par"licipatio11 \\it11 attendant co~iipetitivcness, leading

-4- Ensuring a pri\rote scctor d r i \w cconom!, I boost business

appreciably

4 Ensuring better perlhnnonccs li~llowed by appreciable pmlits

among organ isalio~is

4- Avoiding m isma~iage~i ie~~~ of resources, inconipetence and other

busiriess anomlies

5.2 RECOMMENDATIONS

The following reco~nrnendations have been ~nacle:

(i) 'Hie govcrnmcnt sliould ~naltc sure that i t does everything

possible in order ta solve every other problem that confronts

this 1~mgramtiie, especiall>f in the issue ol' record keeping, the

governnient shnultf ninlte sw-e that e\w-!diing i s accounted f'or

and a compreliensivt. r.ecosd sliould be kept for rel'erence

p ~ I " p 0 S C s

(ii) Each scctor ol' tlic go\wrilwnt cstahl islii~icrlts should bc spread

equally, and if they are selling 011 commercial basis they sliould

titile to time which may assist governrmnt to focus attention on

areas I i tlw S C O ~ C 01' tlw ~ i t i s t i o ~ i w r l

co1111i1c1.cialis:rlio11 ~ I - ~ ~ I I I ~ I ~ I C ' can Ix C ' S I X I I ~ C I C ~

(iv) Each sector of the go\~~.n~iient estahl ishmen ts shoulcl have a

target profit, and if the manngement is not meeting up, they

should disband them i.e., they should apply ~nanagement by

ob-jective (MBO)

(v) The government should s~and in a better position in 111aking this

programme to be appreciated by every Nigerian, both big and

network indivicluals, corporate investors and other risk takers to

acquire substantial interests in privatiserl atid conirnercialised

establishmet~ts, so that these can be cortipeting Nigerians

controlling interests in such en[erprises. This is likely to blow

discovered are ove~wlielmi~ig and i t irlcludcs rc~lamping the nation's

economy througli o\\wr-ship and contr-ol 01' or-ga~iisatior~s \\hicli i s built

on sound scitwti l i c rnanagcnic~~l I'RINC'I I'LICS.

Based on this o\~t~.\\~l ic. lni i~ig prcq~ccts clisco\u-cd 17). t l i t study and

even as polwlarily I~clr l ;~r i icm~ sclwla~.s. puriclits. cspcrts arid staltelioldcrs

o f tlic Iwsi~lcss i~~rlustrich. tlic ~ w c ~ d i c ' r Iic~-chy concluclcs that

pivatisation and coni~~ic~rialisatir,n o l ' p t c r n ~ i ~ c ~ i t l i~ndcd es~ablishmcnk

are but a giant economic step taken by h e gavel-nmerit not only to ensure

deregulation in tlic s1*s(c111 1~111 to r11su1.c c Il?cicncy and t'l'lilc~ivcncss ol'

existing organisations.

The programme, therc1b1-e in all i t s I o r ~ ~ i s and ramifications i s a

discovery that sliould be recognise, appreciated and e'mbarrassed by all

and sundry in tile couritry a~ id [~eyo~id. A l h - a11 tlie \\wltl is all about

competitiveness which can o t~ ly hc atlain4 through privatisation and

commercialisatiot~ (deregulation).

5.4 AREA FOR FURTHER s r u w

The researcher believed that the problems and prospects o f

government owned establisliments have not been used up completely in

this research walk 17urtlic~* studies could hc niade on h e comparative

review o f profitability indices o f both private and public sectors o f the

economy.

Adeola, F. "The Privatisation Process in Nigeria:" Retrieved on

3/23/2005 on the Website: File:// A:\ The 20 Privatization % 20

Process YO 20 in YO 20 Nigeria. I-ltm.

Aneni, A. Y. (1997), "Funding a Multi-Billion Naira Organization Such

as NITEL", A paper Presentation at a Seminar f'or the Management

of Staff of NITEL in March 5. Decree No. 25 of 1988

Ezeigwe, J. (1998), "Privatization:" What Relevance to the Nigerian b .

Economy. A Public Lecture Delivered at the Federal Polytechnic

Iclah, January.

Falami, A. V. (1988), "Privatisation won't Work," Sunday Concord,

Federal Government, (1 988),Volume75:Privitisation and

Cotn~iiercializatio~i Decree No. 25, Federal Government Press,

Lagos:July 16.

Gachi, M. S. (1988), "Privatisation of Public Enterprises, who should

Buy:," National Concord, Thursday, October, 6.

Kay, J. and Thompson, D. (198G), "Privatization a Policy in Search of

ratiotlal:," Econon~ic J o ~ ~ r ~ i a l Vol. 96.

Mbanefo, J . C. (1987), "Privatization", Icon News April -June.

.. Odi fe, D. 0. ( l996), "1'1.ivatizatio1i in Niger-la:, C'onccpts, Issues md:

Modalities Lagos: ~iuarcliari, A u y s t 26.

Otobo, E.E ( 199S), P~.ivntiznticm and Ikgulation in Aliicrr:. "Some Key

I'olicies Issues", II>I)MN I3ullcti1i. Vol.5, No. I . Dc-cenilw.

Oyeniyio, C. 0. (1988), "I'rivatisation in Nigerian Accounts", "Vol. 19.

No. 4, October/Dccc~~~bc.r.

Privatization so I'ar: Courtesy (1909): I'ublicitj? Suh-Committee on I '

Presideni Bill Clintons Visit Retrivrd 0 1 1 3/23/2005 on Website:

Yamene,Y ( 1 964), " Statistics:" An Introclt~ctory Analysis Harper and

Row Pub1 isliers,New yr.rrk.

Zayyacl. 1-1. R. ( 199 1 ). "D i s t i ~ i y i s l i e r l ]'el-sonalit!. I n t e n

Financial Wecltly, hlonrla!; A u z i ~ s t 5 .

Zayyacl, 11. R. (1992). " l ~ c o ~ i o n i i c I)c1nocr.ati7.atic,11." I ' r i~ i tcd in Niger ia

by New 1'ak Plc Kx lur ia , Nigeria.

Dear Responclcn t,

I am a studen( o f t lw nho\>c l iamcd i ~ ~ s t i ~ i ~ t i o r i unrlertaking a

postgracl~rak ~ii;\stcrs d c p c c ( A I 1 3 I\ ) 111 lhc' I ) q ~ a ~ - t ~ i i c ~ i t ol' h lanngc11lt.n t.

1:acultjr 01' I3usintss Ac l l i l i ~~ is t l .a t io~~ . 1 a111 u~dcr, ta l \ i l ig a ~-cscard i \ \wk

titled, "I'RI \~ATISArT10N I C'Ohlhl l 3 l ~ l , ~ L l S ~ \ ~ ~ l O N OF

GOVEIlNRIENT O\VNI;:I) CIS'l'I~AL1SlIhl l<Nl'S IN NIGEIlIA:

PRORLEIVIS A N D I'IIOSI'ECTS.

In order to enable me ncco~npl is l i h i s ~.cscarch, you are kindly

requested to complete this c1~1estioil1iai1.e as instructed since i t is the major

aspect o f this research. Th is is nothing but an acacle~nic exercise and you

are assured that al l the i n fo~ma t i on supplied by you will he treated in

strict confidence

'Th:\t~Ii you h r our n~~t i c iparc t l c o - q x r n l i n ~ i .

OSUAGWU, GLORlA C.

.a

' 12. Do you agree that the li~igeritig political crisis has not been identitied

as one of the factors that pose a probleni to privatisation and

coin~nercialisation ol' go\wlmwit owlied cstablish~nent in Nigeria?

13. Do you agree with any of these or a co~iibination of the f'ollo\ving

(a ) Govcr~i~iicnt o\\;~wcl conipa~iies I i a w 1101 \we11 doing \wll ill the

(b) Lack of prolit and genelal poor perfor~nance

(c) Mis-ma~iage~nent and inconipetence 0 (d) All of the above

14. Do privatisat

participation

ion alitl comlnercielisalion Iiqyc h e potc~itials of private

\vith an attendant co~iipetiti\w~ess Ileacling to a more

vibrant, effective and eflicient clelivery of goods and services among

organizations? (a) Yes (b) No