BACKGROUND OF THE STUDY
Government involvement in business enterprises in Nigeria and the predominance of state owned enterprises, reflected a desire to control the economy after wrestling political control from the colonialists enterprises and viable indigenous private sectors, the government had to move into the large empty spare left by society to take over the budding economy.
Government played a very important role in many areas of economic and industrial development. Moreover, provision of services is such areas of business like, insurance, petroleum manufacturing, shipping and banking where government acquired equity interests in twelve commercial and merchant banks. In all these, Nigeria had a rather bloated public sector with well over 1500 public enterprises at the federal and state levels enterprises at the federal and state levels with a regulated private enterprise. These enterprises accounted for between 30 – 40% of fixed capital investments as stated in the final report of the (TCPC) Technical committee on privatization and commercialization. As the chase may be wake of the economic recession which started in 1981 made it possible for attention to be focused on the activities of these parastatals.
The 1983 presidential commission on parastatals with a view to determining the basis for a new funding scheme, appropriate capital structure, as well as incentive measures to enhance their productivity and general efficiency. The report of the commission showed the following:
(1) Misuse of monopoly power
(2) Defective capital structures, resulting in heavy dependence loan the treasury for funding
(3) Bureaucratic bottlenecks in their relation with supervising ministries.
(4) Mismanagement, corruption and nepotism
The federal Government could not fund the monumental wastes and inefficiencies of the enterprises with problems such as ill conscious investments, political interference in making decision etc.
The Federal Government Of Nigeria in the year 1985 for example, had invested a total sum of N23 billion in the public sector. In addition to this, a total of N11.5 billion was recorded as subventions to various parastatals and companies.
The government revealed that the total dividends received from this investment, during the period of 1980 to October, 1985 was N933.7 million, averaging approximately N155million per year.
The structural adjustment programme was first announced in 1986 as part of the bread efforts to reduce budgetary allocation to public sector efficiency and support the aim of fixed balance. Divested holding will be taken care of avoid it being concentrated in the hands of a few individual.
In order to enable all interested citizens own shares in the private enterprises, commercial banks were directed to grant credit facilities for the purchase of shares under the programme (CBN 1989) i.e the Central Bank of Nigeria Programme. Another programme was introduced and it was then, that bank was first privatized in Nigeria in 1992.
The federal government structural adjusted programme is the drive towards higher efficiency in the promulgation of the privatization and commercialization Decree No. 25 in 1988 by the Federal Government which reflected that government will divest its holdings in agricultural production. Electrical appliances and non- strategic industries and reduction of its holdings in banks, insurance companies and other financial enterprises without losing control.
The year 1989 was ear marked the first year of implementation of the privatization and commercialization programme of the Federal government.
Privatization as Ibie opinioned, it is a process by which the size of an inefficient and ineffective public sector is reduced by transferring some of its function to a relatively more efficient private sector. The introduction of privatization in Nigerian brought in the opinion of many intellectuals such as professor Adebayo who was of the opinion that, privatization and commercialization to succeed, there must be a reshuffling in the economic policies. .
Privatization and commercialization of public sectors has been a dream in the mind of Nigerian Government in the past years. Now that its needs arise further growing economy of Nation Nigeria His Excellency, Chief Olusegun Obasenjo the president of the Federal Republic of Nigeria has brought to focus in this recent year 2003 the programme again to privatize and commercialize public sectors to invest profile and enhance political, social and economic development on a sustained basis.
Anonymous, U (2020). Prospect of Privatization and Commercialization of Public Enterprise in Nigeria. Afribary.com: Retrieved March 04, 2021, from https://afribary.com/works/prospect-of-privatization-and-commercialization-of-public-enterprise-in-nigerian
User, Anonymous. "Prospect of Privatization and Commercialization of Public Enterprise in Nigeria" Afribary.com. Afribary.com, 07 Sep. 2020, https://afribary.com/works/prospect-of-privatization-and-commercialization-of-public-enterprise-in-nigerian . Accessed 04 Mar. 2021.
User, Anonymous. "Prospect of Privatization and Commercialization of Public Enterprise in Nigeria". Afribary.com, Afribary.com, 07 Sep. 2020. Web. 04 Mar. 2021. < https://afribary.com/works/prospect-of-privatization-and-commercialization-of-public-enterprise-in-nigerian >.
User, Anonymous. "Prospect of Privatization and Commercialization of Public Enterprise in Nigeria" Afribary.com (2020). Accessed March 04, 2021. https://afribary.com/works/prospect-of-privatization-and-commercialization-of-public-enterprise-in-nigerian