THE IMPACT OF COMMERCIALIZATION ON THE NIGERIA PUBLIC ENTERPRISES

CHAPTER ONE

INTRODUCTION

1.0    Background of the Study

Right from the beginning the Nigerian administration registered it importance with an unprofitable government companies and left no one in doubt as to its plan to sell them off to the public if only to make them more efficient. Before the promulgation of Decree No. 25, 1988 Commercialization and Privatization programme, the Buhari’s administration (in 1984) and focused attention on the necessity of restructuring the Nigerian economy when it established a number of study groups to address various aspects of the Nigerian economy.

The former Chief of General Staff Commodore EbiteUkiwe, Ex-ray the magnitude of waste emanating from government parastatals and companies. According to him between 1979 to 1985, government suck about N23 billion those ventures, equity made of N11.4 billion while N10.4 billion was give as loans granted within the same period and as disappointing a paltry average of less than 10%. The General Buhari called the attention of the leaders of industries and told them that the days of big government where over policy watchers were left in no doubt that the era of commercialization and privatization is down on the Nigerian economy. This era would be characterized by way of partnership where the government are to provide the needed services and infrastructures, to keep the wheel of development moving. According to the arrangement of the decision to privatize and commercialize the government companies and fully exercise of the companies is therefore the logical climax of two years trend. The companies under full commercialization will receive some subvention but will be expected to generate at least fifty percent of their financial needs for their operation.

1.2     Statement of the Problem

It is no doubtful whether commercialization will be the panacea. It is possible that Nigeria would be exchanging one evil with another. There is higher probability that commercialization may improve operational efficiency of the affected companies. There is also doubt about government pursuit will swell either from the sales of equities from saving the money that would have still be invested in these ventures now being commercialized. More so, serious fear is that commercialization will further enlarge the gulf between the few rich politicians and the multitude of deprived people as only the rich minority can buy the shares that will be sold. The various publications and writings on the impact of commercialization of public enterprises on the Nigerian economy have remained more of descriptive study. Much studies have not been carried out empirically to place the concept of commercialization in proper settings as far as the Nigerian economic welfare is concerned via the positive of public enterprises. Hence this study is geared towards the above facts.
1.3     Purpose of the Study
The purpose of the study is the review of the existing literature on the topic: Impact of Commercialization on the Nigerian Public Enterprises”.
1.4     Significance of the Study
The significance of this research is that, it gives us an insight on the importance of commercialization on the Nigeria public enterprises. It is very significant because it gives us the information on how commercialization contributes positively to the regulation and restructuring of NITEL Plc. It also makes us know that commercialization will improve or develop the Nigeria economy. It help the management of NITEL to know that if fully commercialized, it strengthen the financial accounting control at the enterprises level. It gives us the insight that commercialization affects the operational efficiency of the Nigeria public enterprises.  
1.5.   Research Hypothesis            
H0: Commercialization does not have an impact on the Nigerian public service.            
H1: Commercialization has an impact on the Nigerian public service.  
1.6     Scope and Limitations of the Study
This research work is simply on the impact of commercialization on the Nigerian economy. The research is mostly in NITEL plc. And therefore, the researcher tries his best to use his disposal to obtain a comprehensive and thorough data so as to enable him present a good work. This work as organized in orderly manner and the researcher encountered into some problems which include finance, mobility, under-developed scientific facilities unequipped libraries, uncooperative attitude from respondents to research question etc.
1.7     Definition of Terms               
i)      Commercialization: This is the way by which some of the government parastatals and companies change some amount of money to cover expenses. Commercialization can be defined as the re-organization of enterprises wholly or partially owned by the government whereby such enterprises shall operate as profit making commercial ventures.              
ii)     Public Enterprises: According to Section 22 of the 1979 Constitution of the Federal Republic of Nigeria, it is defined as a body set up by government to carryout, in the public interest, different kinds of operations or render various types of services.             
iii)    Impact: Though there is no direct definition, but according to learners English Dictionary, it is described as the impression effect consequences of something over the other.             
iv)    NITEL: It means Nigerian Telecommunications Limited. It is therefore an enterprise which renders communication services to the public. Two persons in different locations speak to each other with the aid of cable or wireless equipment through the services rendering by these enterprises.
v)     Privatization: This is a process of transferring ownership and control of government-owned enterprise to privates. It may be full or partial.