THE IMPLICATION OF PRIVATIZATION ON NIGERIA ECONOMY
(A CASE STUDY OF NIGERIA NATIONAL PETROLEUM COMPANY NNPC)
ABSTRACT
This work the implication of privatization on Nigeria economy a case study of Nigeria national petroleum corporation (NNPC) is to know how privatization will affect the economy of the country and the citizen of the country at large.
Chapter one introduce the topic and should us the general background of privatization the problems associated with the subject matter the problem (s) that the study and definition of some important terms
Chapter two is the literature review the origin of the subject area school of through without the subject area the school of through relevant to the problems of study different method of studying the problems and summary
Chapter three is conclusion data presentation highits of the study analysis of the reference and bibliography.
TABLE CONTENT
CHAPTER ONE
1.INTRODUCTION
CHAPTER TWO
2. LITERATURE ERVIEW
CHAPTER THREE
3. CONCLUSION
CHAPTER ONE
INTRODUCTION
This work is being carry out is enable us solved the problem of unemployment that is becoming more rampant in our economy and at the same time making our industrial sector function effectively and efficiently to enable us achieve our desire goals and objective
1.1 GENERAL BACKGROUND TO THE SUBJECT MATTER
In any developing country, the government is the main initiator and promoter of economic development. This is specifically true in Nigeria government in development countries usually intervene in some area of the economy in which private sector cannot perform.
According to Abubakar 1985, which stay in, order to facilities the achievement. Of the national development objective. The federal government has instituted and made use of many public enterprise over years it would be beneficial to recall that in the fifties and sixties Agriculture, was the main stay of Nigeria economy. the early seventies with ness rapid increase in oil revenue for Nigeria at a level that won never anticipated, crude oil has since then remained the main source of the Nigeria economy.
This new dimension got the government involved pronounced with wildly diversified investment in area that span both traditional sectors and elusive private sector business. It is importunate thing to say that the Nigeria public enterprise have failed in the efficient provision of the service for which they were established infact it is this feeling of failure and hopeless situation arising from the increasing difficultly as the side of the government that promoted the proposition of the privatization policy in Nigeria.
Privatization was first hunted by the shagbark government of the second republic ( 1979-1983) it was later mentioned again by the general Buharis regime (1983-1985) but is was given priority in the 1986 budget by general Ibkahim Badamasi Babangida who was the head of state from (1985-1993) he said “the parastatals have generally come to constitute can unnecessary heavy burden on the government resource” as from 1986 the volume non statuary transfers that all economic parastatals would institutes that successive Nigeria government have invested up to eight hundred billion naira (N8086) in public owned enterprise and the annual returns on this huge investment have been well below 10 percent. Up till now there have been many years of exhaustive deliberation by state holders on how to put the Nigeria economy development. A consensus has engorged on the imperative of priuclizetim of state none enterprise.
The inauguration of the national council pf privatization is therefore very significant in several improtant resects firstly it is a critical step in our administration social economic agenda. Secondary it is demonstration of our commitment to in situational from. Thirdly the response of state holders in the months ahead will enable us determine with a great measure of accuracy the extent to which we have regained international faith and confidence in our country in general and in our economy is particular.
Privatization is one of the reforms we have to undertake to integrate our economy into the mainstream of world economic order. There are two interrelated aspects to this integration. In the first place we need the technology the managerial competence and the capital from the developed world to enhance the performance of pupilages between the efficient functioning of our utilities and our ability to attract foreign investment.
In the first two chapters we will work into the issues raised and find compromise between them in order to make sound recommendation for privatization policy in Nigeria. As a result of their used to be mainstay of our economy was given attention owing to this circumstance the government investment were sponsored by mostly by the oil revenue. The oil boom ( 1974.1979) has been described as the golden ear of the public investment the government invested in over 30 parastatals and companies within this period of boom most of this parastatals and companies have been unprofitable some of them cannot meet their operating cost and gave to depend on the government subvention for survival.
The public co-operation in Nigeria have been considered as the efficient and wasteful. This is because they have viewed in line with public criterion KINDEL BERGER “I think that this through is not fair judgment because when attempting to gouge the efficiency of government economic activities it is usually not appropriate to use the standard of the private sector. They are horse of different colour. The objective of a private business is profit while the government enterprise is service to the society or promotion of general welfare”
1.2 PROBLEM ASSOCIATDE WITH THE SUBEJCT MARTET
In a build to develop the economy of Nigeria AILLICK 1984 maintained “ that many people strangely advocate more for public ownership as essential to further economic progress bus at least so many people see public ownership as synonymous with inefficiency and waste of public funds and resource belief is often times transmitted into preservative in situation hypothesis that public enterprise are inefficient to private enterprise efficiency and effectiveness are attaining various goods and thus provide useful indication of organizational performance as stated by Chief EKONG N EKONG.
In view of the national economy it is seriously dwindling coupe with the widespread of public discontent with Nigeria public enterprise due to poor performance. The government saw the institutions as a colossal wastage of public investment characterized by non-profit making red tapism unproductive ineffectiveness and gross inefficiency. This is opposed to government objective the public enterprise has over the years turned into the biggest single source of wastage instead of generating growth economically they are found to be censuring for more than the resource they generate
According to commodore EBITU UKWTE the Chief of general staff Nigeria (1984-86) by 31st of October 1985 “ the public enterprise has consumed of total investment of N 23.25B in consisting of N 1.143 B in equity N10 42 B in loans and N04B in guaranteed debit the equivalent to N802 1B also N23.25B was also consumed. However the estimated number of federal and states owned enterprise was about 300 by early June 1987. by 1986 the estimated investment of federal government in about 160 parastatals was more than N23 billon By 198Nigeria has 250 federal parastatls and 25 ministries by January 1998 the estimated investment of federal government in about 250 parastatals is about N100 B yet total divided received by the federal government between (1993-99) in the investment amount to a marge sun of about N233.7 million which is appropriately 2% of investment returns this is for below a comparative figure of 15% return of the private sector according to the Nigeria stock exchange (NSE) estimate by July 1999 it is estimated that the federal government invested up N800 billion naira is public owned enterprises and the annual returns on this huge investment have been well below 10percent. These inefficiency and in many cases huge losses are charge against the public treasury. The inability of the public enterprises or return significant financial profits is on unequal. Proof those that the public sector (enterprise) are economic waste pipe.
However the policy of government raises a number of questions some of them are what the enterprises for are they really dispensable it this stage of our development if no what are the implications of such policy? Indeed it is not really correct to say that the public enterprise have performed poorly all thing considered if yes why is it that Nigeria in sector perform efficiently that those in public sector.
Lastly is privatization the only option the would best serve the interest of the public and who define its nature and scope of that interest
The study is concerned so that criticism will be based on the area and the extent one has covered.
The same is applicable tot this study although there are many implication of privatization is Nigeria economic we shall concerned our selves to management and financing implication of the policy in Nigeria national petroleum corporation (NNPC) in the basis of this limitation we shall not involve ourselves in the full debate of the proponents and opponent of privatization. We shall rather discuss why the government has decided to privatize these enterprise
Finally owing to time and financial an straits involved in investigating this issue in all the companies that are about to be privatized we will confine ourselves to NNPC I however hope that the result obtained from this study will be adequate
Privatization is not only merely a matter of selling shares in a nationalized enterprise. The underling interest is to improve performance and efficiency which has eluded the public enterprise for many years.
The division to private government enterprise were based on the concepts of inefficiency nepotism sentiment non performance this approximation of the researcher hope that the study would provide basis on which further research could be carried out. To this end student government and individuals and private sector will be of utmost interest to students undergoing research on related topic. It will serve as a secondary data to the student thereby supplying information needed government will apparently benefit form the study this they will do by looking back whether the action to be taken is justified or not. Action here means whether to privatize or not.
Finally in the case of private sectors the study will also be beneficial to then because it will provide and bring about change in the attitude to work and enjoying on atmosphere, which will lead to creativity and satisfaction.
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