THE IMPACT OF PRIVATIZATION ON NIGERIAN ECONOMY

CHAPTER ONE

1.1       INTRODUCTION

The concept privatization denotes the transition from one ownership structure to another. It is the transfer of some public institutions. Government holdings to private individuals or corporate bodies.

Privatization is a relatively new word in the English Language, it does not appear to have found its way into English Dictionary.

The concept of “privatization” means to make “private” or to convert from public to private ownership. It denotes a transition from one form to another.

However, even though the “private in privatization refers to the private sector. It does not automatically connote private ownership in the sense of being owned by less than fifty (50) persons as set out by companies Act private refers purely to the sector of the Economy and usually within the private sector. There are private companies and there are public companies.

It is the strong indication of the Federal Government to allow private sector more participation in the Economy to pursue grate efficiency in certain parastatals, through privatization Government arguments for wanting to privatize some of its parastatals among others are poor performance. It also aims at removing wastage and inefficiency in those companies.

The effect of privatization in an Economy will depend on low mixed the economy is, one can then ask what is meant by mixed economy.

Mixed economy as defined in the “Webster third new international dictionary is an economy in which both privately and publicity owned enterprise operate simultaneously”. In other words, it simply refers to an economic system whereby ownership of means of production and distribution is shared between the public and private sectors in such a way that dominance by any sector is not easily discernible.

Privatization is therefore inevitable and indeed natural to this type of development process.

1.2    PURPOSE OF THE STUDY                                           

The study can be viewed as a contribution to greater understanding of privatization as an instrument that can be employed to increase productivity. The purpose are stated below:-

–              Identity and access sources of revenue.

–              Look into the concept of privatization in AP.

–              The impact of privatization on the Economy.

–              Access the effectiveness in achieving the set objective of the organization.

–              Formulate new privatization strategies to supplement or replace existing ones that might be found ineffective.

–              Make recommendation aimed at providing solutions to the problem of low productivity.               

–              Discover and recommend other relevant areas for further research work.

–              Prospects and problems of privatization.

–              Reasons for public enterprise in Nigeria.

–              The financial implication of privatization.

1.3           SIGNIFICANCE OF STUDY               

The findings of this research will be partial and theoretical significance not only with reference for the organization studied, but also with regard to the available knowledge about the impact of privatization on the economy.

Many research studies have been carried out on the problems and potentials of the African Petroleum (AP) and the researchers have made their views known. They are all calling for one form of reformation or the other in the organization.

That not withstanding, this study is a contribution to the body of knowledge existing in the field of privatization.

The relevance of this study however is the focusing of attention on the ways by which African Petroleum (AP) efficient performances can be divided.

This will definitely ensure better services to the numerous customers with the multiplier effect of improved productivity increase on the level of the economy and also in the enhancement of the social well-being of the populace.

1.4       PROBLEMS ANALYSIS                             

The privatization programme of Government parastatals was initiated to enable them arrest the inadequacies inherent in some public institutions.

Although the scheme appear executed to its logical conclusion, attainment of efficiency in the institutions under reference appear illusive. The managers of these institutions and other policy makers are now in a dilemma as to be reasons for the highlighted issue.

The problem of indiscrimate, way in which prices of service rendered by those privatized parastatals cannot be over-emphasized. If they are not appropriately controlled their activities may cancel the entire gain from privatization.