ABSTRACT
A deepening world economic crisis,
sustained and a continuous fall in prices and demand for crude oil has left
Benue State in particular and Nigeria in general with sure recession and depression. The need for the government to intervene and
manage the economy has become very imperative.
But the petro – Naira is no more and the need to generate revenue from
alternative source is seriously urgent.
However, the purpose of this
dissertation is to appraise the impact of privatization on a developing
economy, with a focus on Benue Cement Company Plc, Benue State.
The
privatization process, therefore, aims at improving the efficiency of such
enterprises and encouraging innovation in the ways in which they are
implemented. It thus goes hand, with the
establishment of an effective regulatory system that protects the consumers and
the legitimate core investors – which refers to the economic reform strategy [privatization].
Therefore, the dissertation consists
of an introductory chapter and four other chapters. Chapter two dealt extensively with related
literature while chapter three covers the research design and methodology.
Chapter
four deals with data presentation and analysis.
And chapter five summarizes the findings, proffer recommendations and
conclusions for further references and other appendices.
TABLE
OF CONTENTS
Title page
Certification
Declaration
Dedication
Acknowledgement
Table of Contents
CHAPTER
ONE: INTRODUCTION
- Background
of the Study
1.1. Introduction
1.2. Statement of Problem
1.3. Objectives of the Study
1.4. Significance of the Study
1.5. Scope of the Study
1.6. Definitions of Terms
1.7. Research Questions and Hypotheses
CHAPTER
TWO: RELATED LITERATURE
- Introduction:
Theoretical Framework for the Study
2.1. Historical Development of Privatization in Nigeria
2.2. Private Sector Development in Nigeria
2.3. The Impact of Privatization in Nigeria
2.4. Legislation and Competition of
Privatization in Nigeria
2.5. Current Literature on Theories Postulated Above
2.6. Current Privatization Implementation
2.7. Recent Privatization Sub-Polices [PSSPLS] [NEEDS]
CHAPTER
THREE: RESEARCH DESIGN AND METHODOLOGY
3.1. Introduction
3.2. Sources of Data
3.2.1. Secondary Sources of Data
3.2.2. Primary Sources of Data
3.3. The Population of Study
3.4. Sample Design and determination of Sample Size
3.5.2010 Method of Data
Collected
3.5.1. Questionnaires
Design, distribution and collection
of
Responses
- Secondary Sources of Data Collection
- Method of Data Presentation and Analysis
CHAPTER
FOUR
- Data
Presentation and Analysis
4.1. Introduction
4.2. Data Presentation
4.3 Hypotheses Testing
4.4. Data Analysis
CHAPTER
FIVE
- Summary
of Findings, Recommendations and Conclusion
5..1. Summary of Findings
5.2. Recommendations
5.3. Conclusion
Bibliography
Appendix A
Appendix B
CHAPTER ONE
INTRODUCTION
- BACKGROUND
OF THE STUDY
Up
till recently, there have been many years of exhaustive deliberations by stakeholders
on how to put the Nigeria
windingly economy on the path of sustainable growth and development. Now a consensus has emerged on the imperative
of the privatization and commercialization of the state owned enterprises.
However,
the global economy is characterized by competition, rapid technological
development as seen in the fast paced changes in information technology,
regional market integration, social economic activities and political unrest.
The
inauguration of the national council on privatization is, therefore, very
significant in several important respects, it is a critical step in our
administration’s social –economic agenda.
It is a demonstration of our commitment to institutional reforms. Finally, the response of stakeholder in the
month 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 the economy in particular.
It
is important to observe t hat there was a time when it was considered sound
economic policy for government to establish and invest in statutory
corporations and state owned companies.
Though, it was argued that public owned companies were better for
stimulating and accelerating national economic development than private
capital. The result was proliferation of
such state owned enterprises covering a broad spectrum of economic activities.
It is estimated that successive Nigeria
government have invested up to 800 Billion Naira in public owned
companies. Annual returns on this huge
investment have been well below 10%.
These inefficiencies and, in many cases huge losses, are charged against
the public treasury. With declining
revenue and escalating demand for effective and affordable social services, the
general public stepped up to its yearning for state owned enterprises to become
more efficient.
State
enterprise suffer from fundamental problems of defective capital structure,
excessive bureaucratic control or intervention, inappropriate technology, gross
incompetence and mismanagement, blatant corruption and crippling complacency
which monopoly endanger. Inevitably,
these shortcomings take a heavy toll on the national economy.
The
problem associated with state owned enterprises and monopolies are not peculiar
to Nigeria.
It is true, however, that many developing countries which Nigeria is one, have
overcome the problems through a well designed and single minded pursuit of
privatization programme, the rationale is that privatization permits government
to concentrate on resources on the core functions and responsibilities while
enforcing the rules of the game so that the markets can work efficiently, with
provision of adequate security and basic infrastructure, as well as ensuring
access to the key service like education, hearth and environmental
protection. The objective is to assist
in restructuring the public sector in a manner that will affect the new synergy
between learners and more efficient government and a revitalized, efficient and
service oriented private sector.
There
has been a lot of public debate and concern as to the impact of the
implementation of privatization on the social economic status of the country,
indeed a slot of public conferences have been held across the country to
enlighten, inform the public and appraise the performances of the privatization
on the economy of Nigeria.
Despite
the extensive adoption of privatization, it has from onset been highly
controversial and political scenario, first, these are those who claim that
privatization does not produce financial and operational benefits, or at least
not enough to offset the social dislocation it causes, secondly, there an acute
and pervasive fear that privatization leads to ‘lay-offs, in short run in the
firms divested and then economy at the long run. Lastly, there is a wide spread belief that
even if privatization enhances efficiency, the bulk of its benefits accrued to
a privileged few shareholder, managers, domestic or foreign business interest,
those connected to the political elite. While
the costs are by the masses, particularly workers and end users. In addition, many are concern that lack of
transparency and corruption in the
privatization process has minimized the intended gains and led to or deepened
broader problem of governance. [Kikeri
and Nellis, 2001]. It is therefore, upon
this background, that this study seeks to appraise the impact of the scheme on
the economy of this country in other words this study seeks to ascertain to what extent the aim and
objectives of privatization scheme have been met as a economic reform strategy
in Nigeria, with emphasis on Benue cement Company [B.C.C.] Gboko, Benue State.
From
a historical point of view, Benue Cement Company [B.C.C.] was incorporated as
Limited Liability Company n 1975. However,
the company started operations precisely on the 15th August 1984, the first bags
of lion brand Portland cement was dispatched.
The plant was commissioned with a related capacity of 900,000 tones per
annum with the capacity expansion 1.2 million bones per annum. The highest production of 810,538 tones was
recorded in 1985 by 1990, the federal government privatized some of it share
holding with capital restructuring of the company, the share holding structure was
as follows:
1. Federal government 30.00%
2. Benue
State government 19.72%
3. Nigeria Bank or commerce & Industry 6.57%
4. Plateau
State government 5.09%
5. Cementia holding of Ag of Zurich 4.00%
6. Benue Cement Company Plc staff 3.20%
7. Federal Capital Development Authority 2.89%
8. Nigeria Industrial Development Bank 2.45%
9. New Nigeria Development Company 2.19%
10. The Nigeria Public 23.19%
Due to
the privatization effort of the federal government, the bid for core
investorship of BCC Plc was won by
Dangote Industries Limited [DIL].
However, the core investor could not take control of the Benue Cement
Company [BCC] Plc as a result of
stiff opposition from the Benue state
government. Geographically Benue Cement
Company is located at Tse-Kucha, a village 72 km on the Makurdi – Gboko Road. This location was chosen primarily because
the availability of local raw material [limestone and clay] at Mbayion in Gboko
local government area of Benue
State.
Organizationally, Benue Cement Company
Plc has a peak –like management structure.
The company has a board of Directors made up of the following members, a
Managing Director, four [4] General Managers, Sixteen [16] Senior Managers as
shown in the table below.
The organizational structure has given
rise to high cost in administration due to staff strength. It is a common knowledge that most business
organizations are discarding a bureaucratic nature of running an organization.
Before the privatization process, the company’s management structure was
made up of a Managing Director, Deputy Managing Director and four other
managers. However, the present structure
affects decision making process thereby slow pacing actions and consequently
affecting the overall performance of the company. The major performance indexes of Benue Cement
Company.
THE IMPACT OF PRIVATIZATION ON A DEVELOPING ECONOMY
