African countries, though it well existed on a small scale, according to scholars, nigeria. This analysis shows clearly that the word privatization is absolutely inapplicable in describing the contemporary broadcasting situation in the country. Benefit of privatization and commercialization on nigeria. The arguments or advantages of privatization maybe be as. Thus, the evidence from empirical studies of privatization in developing countries suggests that the performance of banks improved significantly after privatization in many cases. Privatization is advantageous because it improves efficiency and profitability, prevents political interference and increases competition. The issue of privatization has been a topical matter in nigeria economic activities and policy making. A critical assessment of port privatization policy and. Privatization is the transfer or sale of governmentowned assetsinstitutions to the private sector. Privatization must result in better service delivery at lower prices as desired by consumers. Advantages of privatization privatization opportunities for states. Has nigeria benefitted from privatisation of the power.
The advantages of privatization from the governments perspective included. Download this complete banking and finance project material titled. An evaluation of financial problems and prospects of. In the final section of the paper i will attempt to draw useful conclusions regarding privatization as an economic growth policy.
Problems and prospects of privatization in nigeria. It provides the opportunity for someone to make a lot of money. But privatization, which transfers ownership of production and control of enterprises from the public to the private sector, has been very controversial. 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. They argue that privatization is antilabour and will always lead to unemployment. The issue of privatisation has been a subject of intense global debate in recent years. It is argued governments make poor economic managers. The benefits of privatization real or imaginary the nigerian experience. 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. The rule of thumb for an industrial nations power usage is circa 1mw for every thousandth of its population. 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. Megginson william m och netter jeffry m from state to market.
The main advantage of privatization is to generate financial resources for the government in order to generate resources. 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. 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. The fourth section will introduce and discuss the results of my own empirical study. The benefits of privatisation can spillover to other sectors and consumers. In nigeria the prices of kerosene increased by 6000 % between 1985 and 1995.
However, mounting empirical evidence of the benefits of privatisation coincides with increasing. 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. Nigeria, the telecoms company and the fiscal impact of the whole privatization process on the nigerian economy and labour market. This puts nigerias energy need somewhere around 160,000 mw given its population of.
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. Privatization of specific government operations happens in a number of ways, though generally, the government transfers ownership of specific. The benefits of privatization real or imaginary the nigerian. The effect of privatization on economic growth of nigeria. Request pdf deregulation and privatization in nigeria. A look at the arguments for and against privatisation selling stateowned assets to the private sector.
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 focus of this study will be on privatization in developing countries, and. The advantages and disadvantages so far the economic principles of deregulation and privatization were first introduced in nigeria in the. Privatization is the phenomenon of governments contracting privately owned, forprofit companies to provide services that were previously provided by the governments themselves. It has generated strong debates, everywhere especially in developing countries. The privatization of education is a global phenomenon with multiple manifestations. 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 main argument for privatisation is that private companies have a profit incentive to cut costs and be more efficient. Privatisation in the power sector 3 introduction nigerias power sector reform has proceeded as scheduled. The impact of privatization and commercialization in nigeria. Therefore, the objectives of this research project are as follows. The core objectives are reducing fiscal deficits, building a broader tax base, attracting more investment and growing the private sector. 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 initial groundwork and clarification of objectives recommended herein should enable. 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. Indeed, each element of privatizationfrom its apparent costsaving properties to its possible negative impact on.
Department of banking and finance, faculty of management sciences university of calabar, calabar, cross river state, nigeria email. However, the gains from privatization in the utilities sector electricity and water have tended to be limited. The advantages and disadvantages so far the economic principles of deregulation and privatization. Nigeria power sector privatization program appraisal. The problem to research for to assess the impact of privatization of public companies in nigeria. There are about 600 public enterprises in nigeria run by or controlled by the federal government.
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. Privatization and commercialization in nigeria will be a mirage unless institutional reforms take place. Firstly the wholesale disposal of state assets, eg gas, electricity, water etc. Privatization, which is an integral part of an extensive public sector reform policy. 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. Advantages and problems of privatisation economics help. Evaluation of privatization policy in nigeria 1999 2004. Secondly the transfer of management to a service company eg it, prisons. Northern and southern countries and states with very different educational traditions and regulatory frameworks have promoted proprivatization reforms for many reasonssocial, political. 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.
There are numerous advantages of privatization as well as many disadvantages of privatization, and. It can happen at the local, county, state and even federal level. The government should create an environment favorable for private economic activity. The federal government has a target of 40,000mw by the year 2020. 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 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. What are the advantages and disadvantages of privatization. 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. 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. With an installed generating capacity of about 7,500mw and operating capacity of. It has received so much criticism from labour, academia and individuals. Privatization has an important ideological content, namely, recognising that states are inefficient as providers of goods and services.
The inquiry centers on the benefits and the expected. 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. Commercialization and privatization policy in nigeria. In africa, it has remained highly controversial as well as confusing. 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. 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. 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 privatization process in nigeria is a fragment abuse of this provision of the constitution.
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. Many reasons explain the movement by cities and states toward privatization to restructure and rightsize government. The following thesis is aimed to research the issue of advantages and disadvantages of privatization of health insurance. In other words, it is possible to consider divestiture as an instrument to reallocate resources efficiently through the market. Privatisation in the power sector navigating the transition. In addition, privatization of public enterprises is being pursued with scant regard to the laws of the country. In nigeria, privatization came as integral parts of adjustment credits and was aimed at enhancing the efficiency of resource allocation of government. Overall, the literature now reflects a more cautious and nuanced evaluation of privatization. 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. 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. Pdf privatization and enterprise performance in nigeria. In other countries, such as nigeria, the privatisation program started well but then. For instance, attempts were made to privatize nepa when the law that sets it up prohibits private ownership of electric company in nigeria.
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