The effect of privatization on economic growth of nigeria. The benefits of privatization real or imaginary the nigerian. African countries, though it well existed on a small scale, according to scholars, nigeria. Has nigeria benefitted from privatisation of the power. Privatization must result in better service delivery at lower prices as desired by consumers. Privatization is most of the time associated with improved efficiency due to the. Request pdf deregulation and privatization in nigeria. The initial groundwork and clarification of objectives recommended herein should enable. Evaluation of privatization policy in nigeria 1999 2004 a study of bereau for public enterprise bpe peter ogwuche iduh masters thesis economics case scenarios publish your bachelors or masters thesis, dissertation, term paper or essay. The advantages and disadvantages so far the economic principles of deregulation and privatization were first introduced in nigeria in the. According to the guardian, privatization is disadvantageous because it can create private monopolies and a focus on profits rather than public interest in the delivery of essential services, such as healthcare. The impact of privatization and commercialization in nigeria. Evaluation of privatization policy in nigeria 1999 2004.
Therefore, the objectives of this research project are as follows. The advantages and disadvantages so far the economic principles of deregulation and privatization. Problems and prospects of privatization in nigeria. Megginson william m och netter jeffry m from state to market. The main argument for privatisation is that private companies have a profit incentive to cut costs and be more efficient.
Much of the impetus is the desire to inject competition into the delivery of state services in order to provide services to citizens in a moreefficient and costeffective manner. Firstly the wholesale disposal of state assets, eg gas, electricity, water etc. The advantages of privatization from the governments perspective included. The size of nigeria s power challenge led to the governments release, in august 2010, of the roadmap to the power sector reform, a blueprint. Indeed, each element of privatizationfrom its apparent costsaving properties to its possible negative impact on. Privatization has several benefits such as reduced government bureaucracy, reduced state monopolies and financial structures, increased competitiveness, increase in quality of goods and services reduce corruption and control by government, increase staff quality and supervision, improve market analysis, free up government funds for more pressing problems, create employment, reinvigorate the. The benefits of privatisation can spillover to other sectors and consumers. However, the gains from privatization in the utilities sector electricity and water have tended to be limited. The focus of this study will be on privatization in developing countries, and. A critical assessment of port privatization policy and. Many reasons explain the movement by cities and states toward privatization to restructure and rightsize government.
Privatization, which is an integral part of an extensive public sector reform policy. The benefits of privatization real or imaginary the nigerian experience. Privatization is the transfer or sale of governmentowned assetsinstitutions to the private sector. In the case of nigeria, the issue of mismanagement and underutilisation which led to huge wastage of resources and manpower potentials gave the government of the day no other option but to pursue quickly the privatisation programme. Department of banking and finance, faculty of management sciences university of calabar, calabar, cross river state, nigeria email. Privatisation in the power sector navigating the transition. This analysis shows clearly that the word privatization is absolutely inapplicable in describing the contemporary broadcasting situation in the country. An evaluation of financial problems and prospects of privatization in the nigeria economy a case study of nigeria breweries plc with abstract, chapter 15, references and questionnaire.
The federal government has a target of 40,000mw by the year 2020. The adf prgs will mitigate the risk of the nigeria bulk electricity. However, mounting empirical evidence of the benefits of privatisation coincides with increasing. But privatization, which transfers ownership of production and control of enterprises from the public to the private sector, has been very controversial. This paper a critical assessment of port privatization policy and port productivity in nigerian maritime industry highlights the role of seaports in the socioeconomic development of nigeria.
In africa, it has remained highly controversial as well as confusing. Commercialization and privatization policy in nigeria. The main advantage of privatization is to generate financial resources for the government in order to generate resources. History examples, and issues page executive summary i i. The rule of thumb for an industrial nations power usage is circa 1mw for every thousandth of its population. This puts nigeria s energy needs in the 160,000mw range given its population of 160 million. They argue that privatization is antilabour and will always lead to unemployment. Privatization aims to increase electricity generation in nigeria by catalysing private sector investment and commercial financing in nigerias power sector through the provision of partial risk guarantees prgs. Problems and prospects of privatization in nigeria is topical not because its leaders are playing politics with privatization and the process has become a never ending one, but because the policy was a good one which was intended to cut waste of scarce resources, bring good governance closer to the people and lessen the economic hardships of citizens. The arguments or advantages of privatization maybe be as. Advantages of privatization privatization opportunities for states.
The issue of privatisation has been a subject of intense global debate in recent years. The fact that privatization and an important strategy of economic rejuvenation of even the communist nations is a testimony to the economic role of privatization. But there was policy departure with the advent of democracy in nigeria in 1999 as the federal government embraced privatisation policy as a way of bringing about efficient management of the national economy. Nigeria, the telecoms company and the fiscal impact of the whole privatization process on the nigerian economy and labour market.
In nigeria the prices of kerosene increased by 6000 % between 1985 and 1995. In the final section of the paper i will attempt to draw useful conclusions regarding privatization as an economic growth policy. There are numerous advantages of privatization as well as many disadvantages of privatization, and. Benefit of privatization and commercialization on nigeria economy marketing focus uthman saheed march 2, 2019 businesspublic admin project materials download complete final year project materials for the benefit of privatization and commercialization on nigeria economy marketing focus from chapter one to five with references and. Northern and southern countries and states with very different educational traditions and regulatory frameworks have promoted proprivatization reforms for many reasonssocial, political. The following thesis is aimed to research the issue of advantages and disadvantages of privatization of health insurance. Thus, the evidence from empirical studies of privatization in developing countries suggests that the performance of banks improved significantly after privatization in many cases. Privatisation in the power sector 3 introduction nigerias power sector reform has proceeded as scheduled. The problem to research for to assess the impact of privatization of public companies in nigeria. Secondly the transfer of management to a service company eg it, prisons. There are about 600 public enterprises in nigeria run by or controlled by the federal government. They argue that privatization is a neoliberal approach to development, which is imposed by the brettons woods institution as part of globalization that can only favour rich countries and individuals. Advantages of privatization the biggest advantage of privatization is that once a privatization is done completely there is no interference from political leaders and also one does not need to do undue favor to them which in itself is a big boost when it.
Today questions are being asked about the essence of privatization in nigeria and it is the focus of this paper too to ask probing questions into the nature, practice and the context of deregulation and privatization in nigeria. The fourth section will introduce and discuss the results of my own empirical study. In this publication we look at some of the milestones that have been crossed and explore the next steps in the sale of 17 federal government power assets. In other words, it is possible to consider divestiture as an instrument to reallocate resources efficiently through the market. Benefit of privatization and commercialization on nigeria. The governance structure of the energy industry in nigeria, be it power or oil and gas, is still very weak and there is nothing you build on a weak structure that can stand. The core objectives are reducing fiscal deficits, building a broader tax base, attracting more investment and growing the private sector. Privatization of specific government operations happens in a number of ways, though generally, the government transfers ownership of specific. It is argued governments make poor economic managers. Privatization is the phenomenon of governments contracting privately owned, forprofit companies to provide services that were previously provided by the governments themselves. The policy of the government is to make nigeria a private sector driven economy where the government will regulate but leave business to those who cn run it. Privatization issues this section addresses the issues, and the decisions which governments themselves must make prior to embarking upon a privatization process. What are the advantages and disadvantages of privatization. Privatization has an important ideological content, namely, recognising that states are inefficient as providers of goods and services.
However, in a narrower sense, privatization refers to a transfer of state activities into the private sector by sale full or partialof ongoing concerns or by sale of assets following liquidation. Nigeria power sector privatization program appraisal. Press 1990 hereinafter privatization in nigeria noting that throughout the 1950s and 1960s, the nigerian governments economic role was interventionist and tutelary, but limited to the state acting as a catalyst for private sector development by creating the. The government should create an environment favorable for private economic activity. An evaluation of financial problems and prospects of. Overall, the literature now reflects a more cautious and nuanced evaluation of privatization. It has generated strong debates, everywhere especially in developing countries. Privatization and commercialization in nigeria will be a mirage unless institutional reforms take place. Advantages and disadvantages of privatization the merits and drawbacks of privatization have been subjects of considerable debate among businesspeople, city leaders, and public employees alike. A look at the arguments for and against privatisation selling stateowned assets to the private sector. For instance, attempts were made to privatize nepa when the law that sets it up prohibits private ownership of electric company in nigeria. Privatization is advantageous because it improves efficiency and profitability, prevents political interference and increases competition.
In addition, privatization of public enterprises is being pursued with scant regard to the laws of the country. The privatization process in nigeria is a fragment abuse of this provision of the constitution. The inquiry centers on the benefits and the expected. This puts nigerias energy need somewhere around 160,000 mw given its population of. With an installed generating capacity of about 7,500mw and operating capacity of. Basic advantage in privatization is accurateness and commitment towards the service as they private organizations are very much concerned about the profits they make ultimately. Download this complete banking and finance project material titled. It can happen at the local, county, state and even federal level.
It has received so much criticism from labour, academia and individuals. Advantages and problems of privatisation economics help. The following topic is highly debated nowadays in most countries, and each one of them has its own pattern of health care and health insurance. In other countries, such as nigeria, the privatisation program started well but then. The privatization of education is a global phenomenon with multiple manifestations.