THE IMPLICATION OF PRIVATIZATION ON NIGERIA ECONOMY

816 Users found this project useful

CHAPTER ONE

INTRODUCTION

 1.1              Background of the Study

Privatisation is the transfer of ownership and control of enterprises from the state to the private sector. It is a system of economic and operational restructuring and reallocation of public assets from the public sector to the private sector. Adnan (2005) asserts that the process is a fundamental economic ideology that promotes ingenuity that can lay claim to property right. This topical issue has drawn intense global debate in recent years especially in developing economies like Nigeria where the organised labour, academia and individuals have criticized the policy on account of transparency. The critics argue that privatisation is capitalist oriented likely to short change the labour force resulting in redundancy, pay-cuts, downsizing, lay-offs and retrenchment to pave way for increase in profit margins of the private investors. However, the proponents of privatization opine that privatization is a global economic reform that promotes efficient management of resources for economic development of the country. Some of these public enterprises had outgrown their utility and therefore the committed and energetic employees of those moribund enterprises who understood the concept of value could transfer their entrepreneurial premise to any private sector. Privatization is a radical movement of unproductive government enterprises to more efficient relevant private investors with proven records of technical know-how (Young and Brodkin, 1987). It is a route out of the procedural thicket to corruption. It is a deliberate policy for the main purpose promoting efficiency that informs such decision rather welfare. The sceptics on the other hand are concerned about the uncertainties in the private sector even though they agree that the private sector has more opportunities. Development in economic term means achieving sustained rate of expansion that is far greater than the growth rate of the population (Todaro and Smith, 2011). In others words, for any economy to tow the path of development, positive change in all the factors of production and people’s standard of living must exist. The aim of this study therefore is to assess the implication of privatization as an ideological economic reform policy of any government and how such policy impacts on Nigeria’s economic development by ensuring that certain enterprises are private-sector-driven.