Privatization And Commercialization Policies – Economic Impact On Nigeria

Privatization And Commercialization Policies – Economic Impact On Nigeria

Privatization And Commercialization Policies – Economic Impact On Nigeria

The economic structure of Nigerian since the mid 1970s was based mainly on the oil sector, which provided over 90 percent of total government revenue.

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Before the emergence and inception of crude oil into the Nigerian economy, emphasis was on the private sector, for instance, the policy package of the first National development plan was to stimulate the development of a vibrant private sector with marginal public participation in the productive activities. But in an effort to speed up development and to compensate for the lack of an active private sector the government came to play a very active role in economic development.

The government did not only develop and finance necessary physical and human infrastructure but also invested direct in productive activities through state owned public enterprises.

By the beginning of the third National Development plan; the public sector had a domineering economic role in Nigeria. The number and variety of these public enterprises steamed from the general thinking that it is to public enterprises that is assigned the greater part of the task of laying the basis upon which the structure of a dynamic and diversified economy is to arise.

But over the years the growth of the public sector activity was not accompanied by sustainable economic growth rate anticipated by the planners, or policy makers.

Thus in the wake of the world economic recession of the early 1980s, due to the oil glut in the world market, prices of oil declined. This decline in oil price led to a decline in oil revenue available to the government.

Consequently, the country could no longer support the economy, so in that case, government was forced introduced the structural Adjustment Programme (SAP) in 1986, which aimed at correcting the imbalance in the economic development of the country. The first categories official statement on privatization and commercialization was made by the former head of state “Ibrahim B. Babangida” in his January 1986 Budget speech.

In 1988, the government enacted the privatization and commercialization. Decree No. 25 clearly emphasized the importance of a new economic development base on minimum involvement of government in public enterprises decisions and disengagement of government subvention in public enterprises (privatization and commercialization).

To this, much attention has been given by way of proposal, debates seminar and even symposia all over the country. Many public enterprises in Nigeria, which suffer from inefficiency and political manipulations, are being privatized commercialized to enhance efficient and proper management. The problem has been whether to privatize or commercialize strategic public utilities. While many speak strongly in favour of privatization and commercialization, others dismissed the whole idea, they rather prefer government to continue supporting those public corporations utilities and in support of their argument; with series of examples as government being the greatest employer of labour and the most effective means of ensuring economic equality of the citizens.

The factors militating against this argument is the fact that, no economy. In this world is without some setbacks. It is essential to note that privatization and commercialization has actually served as a penance for some ailing parastatals but continued use as the only recognized solution correcting inefficiency in the economy.


Within the past 15 years, successive government in Nigeria had taken steps to boost the performance of public enterprises through provision of fund and organizing workshops for the management of these enterprises to enhance their performance.

The economic impact of privatization and commercialization on the Nigeria economy have attained such an height that Nigerians find it handy discussion almost every time inefficiency occurs in public enterprises.

The study therefore, intends to find out whether the privatization and commercialization of public enterprises has the prospects of improving performances in these public enterprises.


The objective of this study is as follows:

(1) To find out whether the Nigerian privatization and commercialization policies will enhance efficiency.

(2) To investigate the attitude of Nigerians towards privatization and commercialization policies.

(3) To determine the extent to which the Nigeria privatization and commercialization policies will affect the Nigerian economy.

(4) To determine whether the Nigerian privatization and commercialization policies has a tendency of abdicating national security.


This study is expected to be of great importance to economists and other scholars interested in this as an area of study and also policy maker’s bodies in governance as well as researchers. It will also keep Nigerian populace informed about the economic impacts of privatization and commercialization of public enterprises in the economy.


The researcher’s work will cover the period 1980 to 2000 because information within this period are found more recent and relevant, for the researcher’s purpose


The hypothesis are as stated below:

Ho: b1 = 0 Null hypothesis.

Hi: b1 = 0 Alternative hypothesis.

Ho: b1 = 0: Privatization and Commercialization of public enterprises does not have economic impact on the economy.

Hi: b1 = 0: privatization and commercialization do have economic impact on the Nigeria economy.


In the course of this study the researcher had to content with the understated problems.

(i) Time constraint: The stipulated time frame for this study was not enough that is, the time is considered two short for a topic as wide and interesting as this to be adequately and effectively handled.

(ii) Academic constraint: for the fact that this research work was carried out by a student researcher and as such, the researcher had to combine some with his studies.

(iii) Financial constraint: This is another problem encountered during the process of this research work. None availability of adequate finance was a truge hindrance towards effective execution of impending the researcher’s efforts.



Anyanwu, C.M. (1999), An analysis of Nigerian privatization programme 1988, 1999 sessions of Experience. CBN Bullion Lagos. July/Sept No 3 vol. 23.

Anyanwu J.C (1993) The monetary economics Theory, policy and Institution Hibrid publisher Onitsha Nigeria.

Baycko et al (1993) A theory of privatization Harvard University Boston.

Emelife J.C (1982) why government owned enterprises perform poorly Business time July.

Eskor Toyo (1999) Economic Express worries over privatization. The Punch December 6




This chapter attempts at reviewing of the related works of other scholars particularly with reference to Public enterprises (PES) reforms, privatization and commercialization in Nigeria economy.


I am attempt to create a price picture of the historical background to the development of Public Enterprises (PEs) it became essential to identify what public enterprises really is, may be simply defined as an enterprises own and managed by the government for the benefit of the masses.

According to Oxford Advance Learner’s Dictionary of current English, which define enterprises as organization, which supply service and commodities such as water, Gas, Electricity, transportation and communication to the general public.

Onimode (1988:33) sees public enterprises as an embracement of all undertakings, which are directed by a branch of the government itself, or body that has been established by the government to direct such under takings in the public interest. And Ndukwu also stated, public enterprises to be those established whose survives/output is utility to the generality of the public.

Finally, J.L Hanson (1972) was of the view that public enterprises is the state of ownership and operation of industrial, agricultural and commercial undertakings.

Having defined public enterprises, I will return to the historical background to the development of Public Enterprises (PEs).

In a pure capitalize economy characterized by free enterprises; the government has no role to play in the provision of goods and services. Its concern is usually limited to the creation of the correct economic and institutional frame work to enable the private sector operate. More efficiently (Unianikogbo, 1995).

Although it was only after the devastating effects of the economic depression of the late 1920s and early 1930s that the government of capitalist countries of Western Europe were compelled to think seriously in getting involved directly in economic activities in order to ensure stability and efficiency of the state especially, with the collapse of the private enterprises during the depression, Idehai et al 1995.

Shirley and Nellis (1991) pointed out that the economic justification for public enterprises in the developing world and other places has been based largely on the notion of market failure, that under certain conditions the market produces optical economic outcomes such as how production and extreme of wealth and poverty. The expansion of State Owned Enterprises in both developed and developing nations in the 1960s was predicated on the assumption that these State Owned Enterprises (S O Es) would provides opportunities for optimal and efficient resource allocation for national development Salak (1999:19).

According to Akinlo (1995) who further added that prefered are the arguments of lower production, cost, lower units price, increased productivity and efficiency that would result in view of the fact that public enterprises are not principally profit motivated thereby eliminating all expenditures on terms of competition and equally due to the sense of public goods that would be involved on management and employees by the state ownership. The social consideration for government intervention, he argues, is based encouraged gross income inequalities and exploitation. Thus, to avoid this kind of inequalities and bridge the existing gap in the society, government has come in. He added that for the purpose of even development government may decide to established industries in economically disadvantaged areas of the country. However, Salako (1999), explains that these public enterprises were also expected to make greater contribution to national output, investment and employment. In this regard, many developing countries rely on State Owned Enterprises than industrial economic in the hope of substituting for a weak private sector.

Here in Nigeria as many third world countries, the motivation factors behind the establishment of public enterprises (P Es), according to Emelife (1982), include the provision of basic social services, the insurance of rapid economic development, the assumption that the risk of capital intensive projects are a drudged.

Too large for the private sector also to private vital sectors at the economy from being dominated by foreign private capital sector and to compensate for the lack of in indigenous entrepreneurial capacity.

In light of the above, the Nigerian public enterprises policy was clearly stated in the (Indigenization degree 1972), and amended in 1974 second national development plan documented statutory corporations and state owned companies have become an important tool of public intervention in the development process. Their primary objective is to increase and accelerate national economic development under the conditions of capital scarcity and structural defects in private business organization arising from the danger of leaving vital sector of the economy to the whims of the private sector often under the direct control of foreign large scale industrial companies. Therefore, public enterprises are thus crucial in Nigeria’s quest for true national economic independence and self-reliance.

In developing countries including Nigerian, large public resources were used for the creation and development of public enterprises (P Es), especially in the 1970s, Salako (1991: 19). To him, this contributed to the accelerated growing of public enterprises in number, size and complexity. For instance, based on the public enterprises policy in the decade of the seventies, the oil boom years, Nigeria developed a large public sector as banking, cement, insurance, oil prospecting, refining and marketing, cement and paper mills, hotel and tourism. Also Fertilizer Plants, motor assembly, plant railways, seaports and air ports, roads, bridges were built and constructed.

Salako in complete agreement with the 1974 amended decree of the second National Development plan says that the increased establishment of public enterprises in Nigeria at the time was based mainly on the reasons that they were going to be leading edge of modernization and the government of resource of further investment which constitute the commanding high of the economy, guarantee control away from foreign interest and lead the country towards self-sufficiency in the production of essential goods and services.

In terms of size, public enterprises accounted on average for 17.0 percent of Gross Domestic Product (GDP) in sub-Saharan Africa in a thirteen country sampled by early 1980s, Nellie (1986), 12.0 percent for Latin America and a Modest 3.0 percent for Asia (excluding China, India, and Myanmar) compared with 10.0percent of GDP in mixed economics world wide short, (1984).

Salako (2001) asserts that Public Enterprises in Nigeria are estimated to account for 16.3 percent of GDP. According to him, public enterprises also accounted for as high as 90.0 percent of productive activities in Eastern Europe and central Asia.

However, he quoted Mekmon (1994) and Yusuf et al (1992), that it has been observed in many countries, especially developing ones, that public enterprises have been economically inefficient and have incurred heavy financial loses over the years. They went further to say that the world Bank estimates show that State Owned Enterprises lost, about 9.0 percent of GDP in Yugoslvia and more in an average of 5.0 percent in a sample of sub-Saharan, African country, between 1989 and 1991 respectively. Similarly, 30.0 percent of State Owned Enterprises in China incurred loses and the consolidated government and enterprises deficit was in the range of 8.0 percent of GDP in 1991

State-Owned Enterprises are adjusted to have contributed substantially to public sector deficits and have financed less than one fifth of their investment through internally generated resources.

Also, world Bank (2001) estimates asserts that government transfers and subsidies to State Owned Enterprises (S O Es) amounted to 3.0 percent of GNP in Turkey and 9.0 percent in Poland in 1990s Salako (1999) also points out that the financial performance of Nine State Owned Enterprises (S O Es) (telecommunications, postal services, air lines, railways, transport, power, cements, iron and steel including textiles) in five West African countries (Benin, Guinea, Nigerian and Senegal) has been persistently poor, win annual government transfers and over drafts to those sectors ranging from 8 to 14 percent of GDP further various government documents (Annual Budgets, development Plans etc) characterize public enterprises with low declining productivity, capacity under-utilization of plants, feeble financial structure with serious indebtedness, considerable over staffing and very weak lease of accountability and financial discipline. These features according to various analyst, Ayodede (1987 1991 and Iwayemi (1992), arose from the regulatory policies linked in one way of the other with ineffective public enterprises. To this shivley and Nellis (1991:5) adds “although governments in most of the developing world during the post war period looked to the public sector as the engine of economic progress, practitioners. And theories have increasingly agreed that reliance on the public sector has stretched the managerial abilities of developing countries government beyond their limited. “In their views, government almost every where have become increasingly aware that they must realign their priorities to mobilize the skills, and resources of the private sector in the larger task of development and to concentrate government efforts on essential public services- pruning activities that have become unmanageable and using all resources more efficiently.

It was on these evidence that we conclude government policy of acquisition and direct participation in the productive sector or the economy has failed. This is because most public enterprises has failed to achieve their objectives, Ekpo Opiner that public enterprises failed not because they are not desirable but because of mismanagement, half backed government policies lack of unite and the perception of capitalist accumulation.

In the light of the above evidence, no responsible government can continue to allow failure of it is public enterprises to persist, if the required growth and development of the economy is to be attained. This consequent had motivated government in the 1980s and early 90s to consider relatively radical method of reforms for reviving the State Owned Enterprises (S O Es).


In an attempt to define privatization and commercialization the researcher has been able to discover that both can be defined in both narrow on broad sense. In the context of a shift or transfer of public sector activities Narrowly, according to Unimogu (1995:80) sees Uniakgbo read (1985).

“Privatization involve the transfer of owners from public enterprises while commercialization is the total sale of government owned enterprises to private owners. In the same view, Begget-al (1994) sees privatization as the sales of public sector companies to the private sector. This definition of Been et al is in line with harming and Mansor (1999:34) who said that privatization is the transfer of public sector activities to the private sector, also in support of the views is on Wioduoket (1999:55) who defined privatization as the systematic transfer of appropriate functions activities on property from the public activities or property from the public to private sector, where services (production and consumption) can be regulated more efficiency by market and price mechanism, perhaps that is why Usman 2002 says privatization involves redefining the role of the government by having it disengage from those activities which are best handled by the private sector, with the over all objective of achieving economic efficiency. Verr (2002) makes a little variation, he pointed out that privatization is the part of a process of structural adjustment, he is of the opinion that it involves redefining one role of the states by disengaging the state from those activities which are best done by the private sector, with one all objective of achieving economic efficiency.

By way of modification, privatization is avenue for raising productivity and enhancing overt all economic growth achieve through increased involvement of the private sector in productive economic activities through the sale of public enterprises to the private sector, with a view to improving economic economic efficiency, Salako (1999:17) Ayodele (1999:13) points out in C.B.N vol No.3 that the commercialization and privatization decree (FRN, 1988) the transfer of government owned shareholding in designated enterprises to the private shareholders comprising individual and corporate bodies.

Obadan (2002) summarizes privatization in the narrow sense as the transfer through sales of public assets or enterprises to the private sector.

Broadly defined, privatization involves not only the sale of sale a sets, but also the transfer of the management of state activities to the private sector the cough contact and less leases and the contracting out of activities that were previously done by the state, Shirley (1988:34,36) Jones (1991:37) and Todaro 2000 agree with Shirley to point out that:

Privatization involves the transfer of ownership and control of public enterprises to the private sector.

perhaps, this is why privatization has been defined as the transfer of majority ownership of public enterprises (PES) to the private sector, Kikeri et al.

According to Ibie (2002) privatization may be described as a situation whereby government offers for sale its shares in some commercially oriented companies and corporation, he stated that:

It refers to a situation in which decision on what, when and how much to produce is determined by marketed forces to government policy which had litter to been the case. Ibie goes at length to define privatization as a process whereby the size of an ever- burden public sector is reduced by transferring some of its function to a relative more profit oriented private sector.

He further pointed out that privatization is a denationalization of nationalized business.

In addition, it was stated in I.F.C. 2002 that privatization is the transfer of total equity ownership and central of public enterprises to private sector by the sale of enquiring concern of the assets following liquidation. It referred to privatization as asset divestiture process.

From the foregoing one can say privatization is a tools for economic management of modern industrial economics.

The world (privatization) has some from the world “private” as opposed to public sector. It is takes from private, returning to ownership, management and control of business enterprises from the public sector to the private sector. ODIFE (2002) this transfer presupposed that the private has a relatively higher efficiency to produce goods and services at lower unit costs.

Privatization can be whole or partial. This is why Anyanwu (1993:91), quotes privatization and commercialization degree of 1988 as saying, privatization is the relinquishment of part or all of the equity and either interest held by the federal government or its agency by the enterprises wholly or partially owned by the federal government.

In other words, privatization is a systematic and programmed withdrawal of government from those activities which private persons and undertaking can perform more effectively than government agencies or enterprises.

On the other hand commercialization according to Akamikhor (1986) implies government retention of its ownership but a reduction or complex stoppage of their further funding through subsidies.

In the light of this, commercialization can be seen as the reorganization of any enterprises owned by the government to enable it operate as a profit making commercial venture Ekpo (2002).

Anyanwu (1993:19) views that commercialization is the reorganization of the enterprises wholly or partly owned by the federal government in which such commercialized enterprises shall operate as profit making ventures and without subventions from the government.

There are two categories of commercialization, namely fall commercialization and partial commercialization no divestment of the federal governments holding will be involved and may, subject to the general regular, powers of the federal government, the enterprises shall fix rates, prices, and changes for goods produces and services rendered. Also these commercialization can be used in privatized industries can be used in their corporate names.



Before the structural adjustment programme (SAP) made privatization and commercialization a component of its conditionality, two committees on the evaluation of the operations of public enterprises were instituted in the 1980s. while Onosode commission’s report of 1982, during shagari administration recommended the commercialization of public enterprises, the report of Altlakin’s committee of 1984 recommended the privatization of public enterprises, Oninode (1988). This development was square to the degree of enormity of government investment in public enterprises with the resultant disheartening yields.

With this, the policy of privatization and commercialization was made an issue of importance in 1986 budget speech, consequently, the government introduced the policy on July 27, 1988 with the promulgation of the privatization and commercialization degree No.25 of that year, FRN (1988). To this, the technical committee on privatization and commercialization (TCPC) was established.


In 1999, committee on privatization and commercialization (TCPC), Chaired by Ahmed, N.EL Rufal was see up. The TCPC is now Bureau for public enterprises (BPEs). This Bureau according to the public enterprises Act of 1999 degree No.28, is to provide secretariat support to the national council on privatization (NCP) and carry out other duties and responsibilities that may be assigned to it from time to time Council, NCP (1999).


The decision to transfer public enterprises over to private control is an important –development in the history of the country. It is a policy measure, which cannot pass without opposing views of its economic, political, and implications.

Therefore a number of arguments have been raised for and against privatization and commercialization. The plansibility of some of the arguments on either side seem to have further plunged the average person into a dilemma. And so the debate goes on, privatization of public enterprises it seen as one of the options debts specifically, Everest (1999) believed that, if the privatization exercise is carried out objectively, more than and 10 billion assets will be actualized from some of the key public companies.

In the same vein, Kunle (1999), believes that, only privatization can profer the much needed long term economic recovery and sustain national development. To buttress his argument he said that:

Indeed a heaving private sector in any country is an elixir, for a sound economy and repellant to any serious degree of economic difficulty.

Adebayo (2002) on the other hand is of the view that, the real problem with the Nigeria economy is not that companies are owned by government but that of acceptability within the government. To him “what needs to be acknowledge by an including the a postles of privatization is that the failure of the Nigerian economy is not due to any major faults in our system but is the result of human being gone bad “The proceeded to claim that “The battle to bring Nigeria back on the pain of profitability is one the must be fought be fought against The managers of the nation who, over the years, have plundered the country for their own employment “By way of elucidation, he says” privatization of the Nigerian economy have been forced into the narrow part of strict accountability.

It is equally contended that privatization is synonymous with deprivation of the masses for the benefit of the few rich since only the rich can afford to raise the large amount of money that will be required to purchase undertakings marked out for sale. In doing this it seems a deliberate effort is being made to widen the gap between the rich and the deprived poor. Some other strong antagonist of privatization believes that it will cause more harm then good to the welfare of Nigerian masses. People who hold these view seems to be convinced that what will make the ailing parastatals or public enterprises perform well is to man them with qualified, competent and committed personnel. Such people, it is suggested, should be given target period for implementing given undertakings will be rewarded when they merit it, while mismanagement should attract punishment, FRN, (1986).

Eskor (1997), fauited, the programme, describing it as “:a ploy by some selfish and day slavery”. He believe that government should remain in business to provide basic infrastructure for the entire populace.

By way of elucidation, he said government should have leased out the enterprises to be privatized or hand them over to private hands, if they were not doing rather they sell them, he asked.

How many people will want to sell their father’s houses to a capenter just because the houses are leaking?——– How many intelligent people will retain their ownership?

Eskor wondered why government decide privatize enterprises not set up for profit making, adding that loses making enterprises could be turned around positively without privatization.

Mahmud (2002) is in support of Eskor. He suggested that, instead of privatizing enterprises like Nigerian National petroleum Corporation (NNPC) Nigerian telecommunication (NITEL) national electric power authority (NEPA) because of their roles is the lives of Nigerians, government should invite experts from countries that specialized in theses areas to help improve their services. He stated that privatization is good only for industries, which are not the main stay of the economy. In his words, “many Nigerian are poor and if we sell organization such as NNPC, NITELK, NEPA, which are the main stay of the economy, the poor people will be slaves to the buyers of corporation forever

By way of explanation Idrisu says private investors who acquire these organizations have the control and would therefore indicate whatever they want to achieve in these industries. He asserts that “government may still own shares but if the majority shares are held by private investors, these people will become Lords in Nigeria and will indicate to all, what should be done, I am opposed to privatization of big corporations ike NITEL, NEPA, Railways and water corporations Idrisu declared.

Of the same view is Ahmed (2000) who explains that privatization is not best solution to the country’s economic problems. Pointing out that any government parastatals was not performing well; the management could be contracted out to those who could management it well for a fee.

In the same vein, Ifeyori (2000) cautioned the federal government against a total privatization of public enterprises, he says it is dangerous to leave the nation’s economy entirely with the private sector, he argued that the ideal is the market economy, there is no room for government intervention to the completely true. He stated further that government in all parts of the world including the capitalist USA, do not leave their economic totally in the hands of profit motivated individuals or corporation or corporate bodies in the private sector, without some monitoring.

It is equally argued that those who will be buying from the parastatals require a large sum of capital while those blessed with capital are the multinational corporations and some indigenous “bourgeoisies” who are the representatives of the big international capitalist. Thus, the Nigerian economy was feared through privatization will be tied to the international finance capital of the rich countries. This is why in Nigerian government will become puppet of foreign forces, the sovereignty and aspiration to protect the county’s interest will be undermined, FRN (1986) in the light of the above.

Sani (1999) urged the president and the National Assembly not to lose national iniciative and identity to foreign invcestor. He says “it is a very good, sign that Nigerian has embraced market economy. And also good that government has followed up on privatization and hope those companies that are privatized will be owned mostly by our own people, because if the federal government privatizes those companies and other foreigners comes and by up all the companies, our country would then assume a mere geographical expression to Nigerian investors. If that trend is allowed to blossom, then foreigners will dicate the policies of these government”

Ifediora (2000) also disapproved the sale of shares of the nations public enterprises to foreign buyers, saying that profit made by the foreign buyers do not accrue to the domestic economy but repatriated home. He, therefore advices that Nigerians should be given the opportunity to buy shares in these enterprises so that any benefit of such divestiture will accrue to the such divestiture will accrue to the benefit of the people.

In a similar vein, Odudu (2002), insisted that foreign investors must not be allowed to hijack the purchase of shares of the public enterprises (Pes). He suggested 30 percent shares in each of the enterprises for foreigners while 70 percent should be for Nigerians.

However, Ijewere (1999) allayed fears that privatization would not allow foreigners to hijack the economy, describing such fears unfounded.

Some other opponents of the scheme believes that under privatization, enterprises created with public funds would be turned into the hands of a few class-based individuals which would further perpetuate the existing inequalities in the distribution of national assets. Others regard privatization as the “highest form of neocololism” such people argue that parastatals are one form of state intervention in the economic sector in form of control and management. It is a physical means of intervention and the most effective means of ensuring economic equality of the citizens, FRN (1986) Yissa (2000) debunked allegation of a possible hijack of the privatization scheme by “money-bago” and neo-colonial investors, explaining that “the fear about dominance by foreigners should not be there because the government is sensitive enough not to allow mediocre foreigners to dominate any of these companies” he went further to explain that “The government is determined that our enterprises will not be given to people who don’t know what the business is about. We want to make sure that only core investors take part in the privatization programme.

According to Tunji (2000) “privatization is a double-edged sword” Although he was not against privatization as such, however, added that “privatization like SAP may lead Nigerian into another economic woe if the relationship among the factors of production were not carefully studied.

To buttress his argument he said that All I am saying is that we should be careful in our.

Privatization bid, lest we hand over the economy to the executive looters’ who have capital to buy all the shares and who certainly became economic exploiters due to their greed.

Further more, he said “The present privatization spree” is routed to achieve our economic-re-enslavement” adding that the ex-colonial powers under the new gears of neo-colonialism will dominate our economy with the help of their local collaborators, who are the looters of our National treasury, if care is not taken.

Further, those who think that privatization should be shelved maintained that government is the greatest employers of labour. In their thinking, privatization will encourage unemployment while some says we are undertaking privatization to satisfy the world bank and international monetary fund (IMF), FRN (1986).

The president Olusegun Obasanjo allayed fears of those opposed to privatization when he says:

“Nigeria is neither seeking to gratify the world Bank and international monetary fund (IMF), nor replace public monopoly of national assets with private monopoly”.

We are privatizing for the benefit of our economic recovery and social life, we are not embarking on this exercise to please the world Bank or the IMF. Privatization is not designed to share our national assets to a few rich people.

We are not about to replace public monopoly with private monopoly. Rather, in our determination to be unyielding on unrecognizing in the pursuit of the best interest of this country, we want to remove the financial burden, which these enterprises constitute on the public and release resources for the essential functions of government.



This is the summary of my findings to four hypothesis earlier raised in my chapter three, the result obtained and analyse above are quite informative. In the first place, a large number of Nigeria population welcome privatization and commercialization policies.

They are of the view that would be better off, if ailing public utilities are privatized or commercialized. It is also discovered that privatization and commercialization will enhance efficiency in the economy and this correspond with the work of S. O. Uniamikogbo (1950) issues in privatization and commercialization at public enterprises in Nigerian.

We have also discovered that privatization and commercialization will lead to technical and economic recolonization of the Nigerian economy in the hands of foreign investors.

Furthermore, this study also reveals that privatization and commercialization will lead to unemployment in the short-run, in the long run there will be more opportunity for employment.

We also found that employment and commercialization has the tendency of abdicating national security and as such will caused some harm to the welfare of the economy.


Privatization and commercialization policies of state enterprises were a comfier piece of structural Adjustment Programmes (SAP) objective of liberalizing the Nigerian economy.

It was introduced in July 27th 1988 under decree No 28 at that year FRN (19880.

In 1998, a regulatory technical committee on privatization and commercialization (TCPC) was set up under the chairmanship of Harza zayyad.

This regulatory body has since been changed to bureau at public enterprises (BPES) its duty and responsibility is the provision at secretariat support to the national council on privatization (NCP) it has been shown that public enterprise in Nigerian suffers from gross inefficiency. This of course has affected the development of the Nigerian economy and hence the bid to privatize and commercialize public enterprises.

Privatization is the transfer ownership from public enterprises to private sector Ihimodu (1995)

The decision to transfer public enterprises over to the private sector can not pass without opposing views because of its economic, political and social implications.

Some of the social economic implications are the inefficiency introduction and management while the social cost is that of unemployment.

Privatization and commercialization has been highly favoured by majority of Nigerians because of its promised efficiency.

However, efficiency does not follow from privatization alone, but from the benefits, which increased competition, can bring to the market place, especially if privatization is accompanied by industrial restructuring.


Despite the fact that privatization and commercialization has been used to bring about efficiency in some ailing parastatals, we are recommending the following.

The technical committee implementing the policy should ensure that the management of the privatized and commercialization form are entrusted into the hands of efficient and effective managers. If this sis not done, innocent citizens who invested their money may be lost to such invested fund. Also the implementing committee should not just sell public enterprises, they should investigate the viability or otherwise of these enterprises with a view to liquidating those that are unviable instead at saddling, innocent individuals and Organization with enterprises which are doomed to fail from the beginning, there are advantages to this, the first is that resources can now b e diverted to profitable or viable ventures while at the same time the economy will be rid of unnecessary leakages. Also it will be easier to monitor the activities of few firms with a view to formulating appropriate economic policies.

In order to forestall inflation through the incessant increase in prices by imperfect competitors, laws regulating merger and the formation of cartels should be reviewed with a view to checking ill-motivated mergers and cartels.

While it may be economically wise to merger or from cartel in certain case, those whose primary objective is to impose untold hardship on the citizens through arbitrary increase in price should be discouraged.




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Bay ckd et al (1993) A theory of Privatization Harvard University Boston.

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Ifedora Godson (2000) privatization Estate surveyors urje federal government to look inward “the punch march 6, p. 2

Ifeyori Ihimo Du (2000) Don cautions Government over Privatization, The punch April p. 7.

Kunle Okeowo (1999) Democracy and challenges of privatization. The punch April 3.

Mike I. Obadan (2000) Privatization of public Enterprise in Nigeria, issues and Conditions for Success in the Second Round NCEMS monograph series No. 1 ui Ibadan p. 54.

Odudu Williams Orkula (2000) Privatization Estate Survey yors urge federal government to look Inward the puch march 6 p. 17

Omojimite B. U. (1995) Privatization Government enterprises problem, prospects in issues in privatization and commercialization of public enterprises in Nigeria (Ed) S. O. Umanmikogbo Ui Ibadan Kraft BookLimitedp. 97.

Onimode B. (1998) The politicaleconomic of privatization in Depressed economy in privatization of public interprise in Nigeria NES p. 33-49.

S. A. Idehia and S.O. Uniamikogbo (1995) The Effects and Welfare Implication of Privatization and commercialization of public enterprises in issues in Privatization of public enterprises in Nigeria. UI Ibadan Kraft Book Limited.

Uewere Emmanuel (1999) No Alternative to privatization. The punch September, 24 p. 19

Yissa Solomon, (2000) Ex-Enjoy Warns over Attempts to Sabotage Privatization Scheme. The punch April 10.



H. A. Salako (1990) An overview of privatization in Nigeria and options of efficient implementation C B N Economics and Financial Review June Vol. 37 No. 2 p. 17 x 19

Shire M. (1988) The Experience with privatization, with privatization, finance and development September Vol. 25 No. 3 p 34-35

Sulaiman Akino Sho (1999) Privatization or Deregulation? The punch May 12.

The Guardian July, 30 (1999) Obansanjo Explain Privatization inaugurate panel punch p.2

Verr, Bernard B. A. (199) Issues in privatization of public Enterprise CBN Bullion July/ September Vol. 23 No. 3 p. 13.



Adebayo Lamikanra (2000) bus Before Privatization guardians.

Askpor Toyo (9999) “ Support Mounts for Privatization the Guardian June 24.

Emelife J. C. (1982) Why Government-owned enterprise perform poorly Business Time July p. 12

IBIE C. O. (1986) Restructuring the Nigeria Economy, the place of privatization Business Concord May 6.






1. Age.…………………………………………………………..

2. Sex:……………………………………………………………..

3. Occupation: ……………………………………………………

4. Level of Education (WAEC, NCE/OND, HND, BSC, PHD)

5. Nationality (Nigerian of foreigner):…………………………..

6. Location:………………………………………………………..


Please tick [] to your option

(1) Will Privatization and commercialization enhance efficiency?

(a) Yes (b) No

(2) Privatization is designed to share any national asserts to a few rich people. As only rich can afford to raise the large amount of money that will b required to purchase enterprises marked out for sale.

(a) Yes (b) No

(3) The new owners of a privatized enterprise will surely prune down the workforce to ensure that at the end of the year more profits will be declared.

(a) Yes (b) No

(4) Profits made by foreign investors do not accrue to the domestic economy but repatriated home

(a) Yes (b) No

(5) Part of the reason why most government owned companies (public utilities do not make profit is because they pay salaries to people who do virtually nothing?

(a) Yes (b) No

(6) Privatization will cause more harm than good to the welfare of the Nigerian masses?

(a) Yes (b) No

(7) Foreign buyers of the National public enterprises will dictate the policies of the government.

(a) Yes (b) No

(8) Privatization will attract foreign investment and new technology into Nigeria that will produce good products and services thus ensuring the growth of the economy and creation of more jobs for the citizens.

(a) Yes (b) No

(9) The privatization and commercialization is a replacement of public monopoly with private monopoly.

(a) Yes (b) No

(10) Privatization and commercialization has the tendency of abdicating national security.

(a) Yes (b) No

(11) Privatization of public enterprises will enhance the expansion of the economy which lead to increased economic activates and hence provide more employment.

(a) Yes (b) No

(12) The Nigeria economy through privatization in the hand of foreign investors will be tied to the international finance capital of the rich countries.

(a) Yes (.b) No

(13) Privatization and commercialization has the prospect of increasing employment in the economy.

(a) Yes (b) No

(14) The shares allocated to the Nigerians investors should be higher while those for government and foreign investors should be lower.

(15) It is impossible for any individual persons or company to buy more than one percent (1%) shares of the privatized company.

(a) Yes (b) No

(16) Where there is no competition, private enterprises may be able to reap substantial monopoly profits leaving consumers worse off.

(a) Yes (b) No

(17) The Nigerian economy would be better off as a result of privatization.

(a) Yes (b) No

(18) The Nigerian economy would be worse off is public utilities are privatized and commercialized.

(a) Yes (b) No

(19) The shares of privatized public utilities are privatized and commercialized.

(a) Yes (b) No

(20) Efficiency does not follow from privatization.

(a) Yes (b) No

(21) For workers who remain in employment after privatization the terms and conditions employment may change such as employment security, wages, working conditions. And social protection.

(a) Yes (b) No

(22) Privatization and commercialization will lead economic recolonization in the hands of foreign investors.

(a) Yes (b) No

(23) The 40: 40: 20 equity structures for the government foreign investors and Nigerian investors would encourage technical recolonization of Nigeria vice their privatization policy

(a) Yes (b) No

Privatization And Commercialization Policies – Economic Impact On Nigeria

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  1. Abdulkadir says:


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