PROBLEMS AND PROSPECTS OF PRIVATIZATION AND COMMERCIALIZATION OF GOVERNMENT ENTERPRISES IN NIGERIAN

Privatization commercialization are issues of our time and it is to the credit of the Structural Adjustment Programme (SAP) that now have this objective as a current economic policy. Together with rationalization of government parastatals and removal of bottlenecks, privatization is the last of four concrete policy measure of SAP yet to be implemented. Other three are:

All these policy measures as embodied in the SAP were all designed to restructure and reform the Nigerian economy. The economy withnessed a recession since 1981 and recorded some marginal improvement in 1985 but was adversely affected by the fall of  oil prices in early 1986. The economy was characterized by dectiming industrial output, heavy dependence on crude oil and dwindling foreign exchange earnings. It was also marked by price distortion, non-optional public investment and expenditure, traditional imponts of consumer goods, etc.

This is the background of the SAP and amongst its objective we have restructuring of consuption and production pattern. The SAP is expected to further rationalize and restructure expenditure and it is here that privatization comes in as one of the policy instruments. 

It is obvious that with the level of national development that privatization is still a concept yet  to be full developed and understand what do privatization / commercialization  involve as government policy and as concept. Essentially from federal military government official gazette, “Privatisation” means the relinquishment of part or all of the equity and other interest held by the Federal Military Government or it agency in enterprises weather wholly or party owned by the federal military and “privatize” shall be construed accordingly. The common strand running through all is to increase  the participation of the private sector in the activities previously performed by the public commercialization on the other hand, menas  the reorganization of enterprised wholly or partly owned by the Federal Military Government in which such commercialized enterprises shall operate as profit making commercial ventures ad without subvention from the Federal Military Government. From the same gazette, enterprises means any corporation, board, company or parastatals established by or under any enactment in which the federal government or any of its department, ministries or agencies has ownership, joint venture or any other form of business arrangement or organization.