ABSTRACT
The topic for this project is A financial Appraisal of the operational performance of privatized Nigeria company. The research study is done in order to get possible solution or recommendation to the problem of the company and to make the staff to be efficient and effective.
Privatization can be defined basically as the process of transferring the ownership of a public enterprise to the private sector. The method adopted in this paper work was purely primary sources i.e from the field an secondary sources i.e magazine, journal e.t.c. The ratio shall be used as a benchmark for evaluating the performance of the company while the data can be analyzed into two and these are pre-privatization and post privatization.
In this respect, my aspiration to go into this research work is the modern techniques of finance mobilization, privatization has grown to attain much popularly as it is how being embraced by many developed countries and developing countries.
TABLE OF CONTENT
TITLE PAGE PAGES
CERTIFICATION I
DEDICATION II
ACKNOWLEDGEMENT III
ABSTRACT V
TABLE OF CONTENT VI
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY 1
1.2 STATEMENT OF THE PROBLEM 4
1.3 SIGNIFICANCE OF THE STUDY 7
1.4 AIMS AND OBJECTIVES OF THE STUDY 7
1.5 SCOPE AND LIMITATION OF THE STUDY 8
1.6 RESEARCH METHODOLOGY 9
1.7 ORGANIZATION OF THE STUDY 10
CHAPTER
TWO
LITERATURE
REVIEW AND THEORETICAL FRAMEWORK
2.1 LITERATURE REVIEW 12
2.1.1 MEANING OF PRIVATIZATION 13
2.2 PRIVATIZATION IN NIGERIA 16
2.3 THE PRIVATIZATION PROGRAMME 18
2.4 PRIVATIZATION AND LIBERALIZATION 20
2.5 HISTORICAL BACKGROUND AND REGULATORY FRAMEWORK OF PRIVATIZATION IN NIGERIA 24
2.6 THE PRIVATIZATION PROCESS 25
2.7 ESTABLISHMENT OF AN APPROPRIATE LEGAL AND REGULATORY FRAMEWORK 31
2.7.1 INSTITUTIONAL ARRANGEMENT 31
CHAPTER
THREE
RESEARCH
METHODOLOGY
3.1 INTRODUCTION 45
3.2 DATA COLLECTION METHOD 45
CHAPTER
FOUR
4.0 PRESENTATION ANALYSIS AND INTERPRETATION
VIA STATISTICAL AND ALLIED TECHNIQUES 49
4.1 ANALYSIS OF PRE-PRIVATIZATION AND POST PRIVATIZATION OPERATIONAL PERFORMANCE OF SELECTED COMPANIES 50
4.2 ANALYSIS OF RATIO MEAN VALUE 51
4.3.1 TAX FOR THREE COMPANIES 53
4.3.2 POST-PRIVATIZATION AND PRE-PRIVATIZATION MEAN DIVIDED 54
4.3.3 POST-PRIVATIZATION AND PRE-PRIVATIZATION MEAN RETURN ON CAPITAL EMPLOYED 55
4.3.4 POST-PRIVATIZATION AND PRE-PRIVATIZATION MEAN SHAREHOLDER’S FUND GROWTH 56
4.3.5 POST-PRIVATIZATION AND PRE-PRIVATIZATION MEAN EARNINGS PER SHARE 57
4.3.6 POST-PRIVATIZATION AND PRE-PRIVATIZATION MEAN DIVIDEND FOR SHARE AFTER TAX 58
CHAPTER
FIVE
SUMMARY
CONCLUSION AND RECOMMENDATION
5.1 SUMMARY 59
5.2 CONCLUSION 60
5.3 RECOMMENDATION 62
BIBLIOGRAPHY
CHAPTER ONE
- BACKGROUND OF THE STUDY
Privation
is basically the process of transferring the ownership of a public enterprise
to the private sector. This can be said to be injection of private resources in
order words, capital and man power (in the aspect of more qualitative
management ) into public sector activities. In Nigeria, privation has led to
the transfer of ownership of government establishment to the private sector
With
the advent of the modern techniques of finance mobilization, privation has
grown to attain much popularity as it is now being embraced by many countries
both developed and developing countries which Nigeria happen to be part of
them.
The
need for an efficient mechanism finds mobilization need to deregulate the
economy and a quest for the elimination of include political interference in
the economy amongst other reason have led to recent international appeal for
privation by many government.
This
wide spread acceptance of privation could be accounted for by various factors
these includes:
- The failure of
government to run their parastals efficiently and effectively due to prevalent
factor like bureaucracy. These have hundred their responsiveness to government
public policy: hence they have constituted a drain on the nation economics
- The minimization
of excesses of political interference and non-market oriented decision making
- The need to
restructure internal policy due to an international economic demand for
deregulation, instance of this is the international monetary funds (IMF) demand
for deregulation of some third world economic s as a condition for granting
loan facilities to them
Privatization
has proven to be a channel through which domestic and international investment
get into and perhaps stay with in the country’s
economy. Also fund tied down in state owned establishment. Also fund
tied down in state owned establishment can be released and redirected towards
more welfare oriented program like heath are delivery, funding of education
national security e.t.c.
However,
in the case of Nigeria and some developing countries privatization is taking a
slow pace and this can be blamed on previous bad government greed on the part
of policy makers, minimal awareness of the gains of privation on the part of
the majority of the populace amongst other reasons.
Privatization
has been adopted as a key mechanism for deregulation policy in developing
counties like Nigeria is that of accelerated domestic participation in economic
activities that will enhance economic independence.
The
history of privation in Nigeria and it’s implication for economic independence
of the private sector owned no part of establishment, but the government and
foreigners own them.
Although,
the whole process was not know as privatization then it was all the same as an
attempt to transfer ownership of enterprise in Nigeria to the private sector.
It was further modified in 1977.
Under the indigenization exercise, the government still retained its hold on many enterprise from the global perspective, the growth in the popularity of privatization then, especially in industrial nations like Britain etc. can partly be traced to the economic development of the mid 70’s because it was used as a very vibrant tool to salvage the economy from the repercussion of the failure of the widely expanded public sector activities (Ekpentony 1992 ). then, privatization brought a kind of relief by providing market system, which is being required to achieve some necessary macro economics adjustments. Countries that found themselves in this situation include Pakistan and Brazil
- STATEMENT OF THE PROBLEM
In privatized companies, it is strongly believed that with very sound policies, their implementation and monitoring will bring about a lot of gains both structural and financial, and the economy of large especially in the area of deregulation that will be enhanced by qualitative backward and forward linkages.
There
is no organization without it’s own share of problem. The success of any
organization depends on it’s ability to make a good programme and excite it.
For example of privatized companies have good plans and could not execute
Them for the following reasons
- Ability to finance :- some privatized companies find it difficult to fiancé programme that will bring success to their bring success to their out put either caused by the ignorance by the decision makers.
- Practice competence :- some may be ready to finance, but the technical hands, they have on the floor of the organization may able to meet the requirement
- Management consistency:- this also may pull back the hand of the organization clock as in accounting data on the determination of business efficiency
- Excessive urge for profit:- this means the organization interest in making more of profit them it’s reasonable, there by having an adverse effect on the quality of it’s form the global perspective, the growth in the popularity of privatization them, especially in industrial nations like Britain e.t.c can partly be traced to the economic development of the mid 70’s because it was used as a very vibrant tool to salvage the economy from the repercussion of the failure of the widely expanded public sector activities (Ekpentony 1992) then, privatization brought a kind of relief by providing to achieve some necessary macro economic adjustments. Counties that fund them selves in this situation include Pakistan and brazil.
A FINANCIAL APPRAISAL OF THE OPERATIONAL PERFORMANCE OF PRIVATIZED NIGERIA COMPANY (A CASE STUDY OF NATIONAL OIL PLC, LAGOS STATE)
