Impact of Privatization Policy on the Performance of Public Sector Organization in Nigeria. A Case Study of NEPA
Chapter One
Objective of the study
The objectives of the study are;
- To ascertain whether Privatization of public enterprises has encouraged price increase of goods and services
- To ascertain whether Privatization of public enterprises has created more job opportunities to the citizens in Nigeria.
- To ascertain whether Privatization of public enterprises has encouraged price increase of goods and services
CHAPTER TWO
REVIEW OF RELATED LITERATURE
PUBLIC ENTERPRISE
There appears to be no generally accepted definition among all the scholars regarding the conceptual meaning of public enterprises. One reason according to Sosna(1983) for the inability to have a single standard definition of public enterprises was that public enterprises were established at different periods and each epoch naturally brought forth the types of public enterprises most clearly matching its own conditions. It is therefore believed that the variation in definition are informed by the ideological, values, interest, dispositions and circumstances that brought public enterprises into existence (Adeyemo and Salami,2008). In spite of the above, we shall examine and review a number of definitions as given by renowned scholars of public enterprises. Efange (1987), for instance, defines public enterprises as institution or an organization which are owned by state or in which the state holds a majority interest, whose activities are of business in nature and which provide services or produce goods and have their own distinct management. Obadan and Ayodele(1998) define public enterprises as an organizations whose primary functions are the production ,sale of goods and services and in which government or government controlled agencies have no ownership stake that have sufficient to ensure their control over the enterprises regardless of how actively that control is exercised. The basic reason for establishing public enterprises in all economies has been to propel development. Hanson (1972) reflecting on Turkey, Mexico, India and Nigeria noted that the establishment of public enterprises is premised on what he considered as obstacles to economic development in the post independence states. It is also instructive to note that in Nigeria like many other developing countries, public enterprises are used as employers of last resort. Ugorji (1995) observes that public enterprises have also been established for political reasons and many government undertakings are used to provide jobs for constituents political allies and friends. But in Nigeria establishment of public enterprises and distribution of government employment have been defended on the need to maintain federal character and promote national integration. In Nigeria public enterprises suffer from 19 gross mismanagement and consequently resulted into inefficiency in the use of productive capital, corruption and nepotism, administrative bottleneck which in turn weaken the ability of government to carry out its function efficiently (World Bank, 1991). These undesirable physical and financial performance and other problems of the PEs have made Nigeria to embark on the public enterprises sector wide reforms via the privatization policy.
WHAT IS PRIVATIZATION?
Privatization can be defined in several ways depending on the form it takes. The World Bank defines privatization as “a transaction or transactions utilizing one or more of the methods resulting in either the sale to private parties of controlling interest in the share capital of public enterprises or of a substantial part of enterprises or of a substantial part of its assets”. Privatization has become an important instrument for streamlining the public sector and promoting economic development in countries all over the world. It is a strategy for reducing the size of government expenditure and transferring assets and service functions from public to private ownership and control (Ugorji, 1995). Helad (1988) maintained that there is a very wide range of initiatives usually discussed under the term privatization. Such initiatives includes: the substitution of user charge for tax finance, the letting of management contracts while retaining ownership, and liberalization for the promoting of competition in markets previously reserved for statutory monopolies. Cook and Kirkpatrick (1988) maintained that the drive towards privatization is merely a result of the confusion arising from the role of price mechanism and of the private sector in mixed economy. The shift from the ‘more – government’ attitude of the 1940s to the ’more-market’ attitude in the 1980s is merely a shift in paradigm, rather than in ideology. Thus, all the initiatives that emphasize more use of the market or more use of ‘private- sector- culture’ is termed privatization. Hence the entry of more firms into the previously monopolistic field is privatization; and exposure of enterprises to bankruptcy and take-over is privatization. Cook and Kirkpatrick (1988) define 20 privatization as the transfer of productive asset from public to private ownership and control. Boachie-Danqush (1988) defines privatization as the transfer of ownership of public resources or asset to private individual and firm through various options: – sale of state-owned enterprises to the private sector through privates placement, public offerings or competitive bidding by strategic investors; – allowing private operators to compete in sectors that have been the exclusive domain of PEs; – breaking up a monopoly into various branches of activities to stimulate competition; – transferring the management of PEs from public to private through contracts, leases or concessions.
CHAPTER THREE
RESEARCH METHODOLOGY
INTRODUCTION
In this chapter, we described the research procedure for this study. A research methodology is a research process adopted or employed to systematically and scientifically present the results of a study to the research audience viz. a vis, the study beneficiaries.
RESEARCH DESIGN
Research designs are perceived to be an overall strategy adopted by the researcher whereby different components of the study are integrated in a logical manner to effectively address a research problem. In this study, the researcher employed the survey research design. This is due to the nature of the study whereby the opinion and views of people are sampled. According to Singleton & Straits, (2009), Survey research can use quantitative research strategies (e.g., using questionnaires with numerically rated items), qualitative research strategies (e.g., using open-ended questions), or both strategies (i.e., mixed methods). As it is often used to describe and explore human behaviour, surveys are therefore frequently used in social and psychological research.
POPULATION OF THE STUDY
According to Udoyen (2019), a study population is a group of elements or individuals as the case may be, who share similar characteristics. These similar features can include location, gender, age, sex or specific interest. The emphasis on study population is that it constitutes of individuals or elements that are homogeneous in description.
This study was carried to examine impact of privatization policy on the performance of public sector organization in Nigeria. NEPA, portharcourt forms the population of the study.
CHAPTER FOUR
DATA PRESENTATION AND ANALYSIS
INTRODUCTION
This chapter presents the analysis of data derived through the questionnaire and key informant interview administered on the respondents in the study area. The analysis and interpretation were derived from the findings of the study. The data analysis depicts the simple frequency and percentage of the respondents as well as interpretation of the information gathered. A total of eighty (80) questionnaires were administered to respondents of which only seventy-seven (77) were returned and validated. This was due to irregular, incomplete and inappropriate responses to some questionnaire. For this study a total of 77 was validated for the analysis.
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATION
Introduction
It is important to ascertain that the objective of this study was to ascertain impact of privatization policy on the performance of public sector organization in Nigeria. In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations made which in the opinion of the researcher will be of benefits in addressing the challenges of impact of privatization policy on the performance of public sector organization in Nigeria
Summary
This study was on impact of privatization policy on the performance of public sector organization in Nigeria. Three objectives were raised which included: To ascertain whether Privatization of public enterprises has encouraged price increase of goods and services, to ascertain whether Privatization of public enterprises has created more job opportunities to the citizens in Nigeria and to ascertain whether Privatization of public enterprises has encouraged price increase of goods and services. A total of 77 responses were received and validated from the enrolled participants where all respondents were drawn from NEPA portharcourt. Hypothesis was tested using Chi-Square statistical tool (SPSS).
Conclusion
The major conclusion, from the foregoing, is that, privatisation, if properly implemented, can lead to enhanced performance of enterprises. It can also lead to enhanced efficiency and better service. However, it must be reiterated that enterprises that will be privatized must be ones that can be operated profitably, at least initially. Government may have to make some financial sacrifice by investing in enterprises with serious financial difficulties so as to upgrade such enterprises and make them attractive to the private market. The writer of this paper believes that privatisation of public enterprises is good for our national development in Nigeria if all the critical success factors discussed in this paper, and others that are not, are implemented. In the final analysis, government revenues will be maximized while property ownership will be spread, not only to the rich, but also to the poor. The economic objective of harnessing and distributing the material resources of the nation to serve the common good (as stated in Section 16, sub-section 2(b) of the Constitution of The Federal Republic of Nigeria 1999) would have been achieved.
Recommendation
Government should not privatize all sensitive strategic and mass oriented agencies such as those providing services like water, electricity and health. These agencies should still be managed and subsidized by the government because they provide social services. They would not be expected to make profit or break-even, but it should be mandatory that they provide efficient, reliable and adequate services.
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