CHAPTER ONE
1.1 BACKGROUND OF THE STUDY
To be able to transform into an industrialized economy an underdeveloped economy has to privately and commercially develop.
The importance of establishing public enterprises or corporations began during the 19th century with the British Telecom in 1884 under the telecommunication act and gained a worldwide support in Britain. Thereafter several nations particularly those in Africa, have come to embrace the principle as a way of eliminating low performance and inefficiency in the public sector.
Following the trend, the Nigerian economy has come to embrace privatization as a cardinal principle of the state‟s economic policy. Over the years, the Nigerian government has encouraged the development of the public sector since independence in 1960 and particularly 1970s but has not been successful because government owned industries and establishments remain citadels of corruption, studies in
inefficiency and consequently a heavy drain on the economy. As a means of combating this menace, the (IMF) international monetary fund and World Bank have advocated the twin policies of privatization and commercialization. Incidentally, Nigerian has fully adopted this policy and is embarking on it with freazy, for example, Nigeria Brewery change from the most inefficient and less making company before privatization to one of the most profitable businesses in Nigeria. Nigeria has more than 1,800 public enterprises at federal and state level which can be categorized as follows:
(1)Strategic industries such as petroleum and petrochemical, fertilizer plant, ion steel.
Public utility providing infrastructural services.
Economic/commercial enterprises such as manufacturing of consumer goods, insurance, bank and hatotoic .
And Department / stationary boards designed to serve specific social or development roles as university and research institutes (Ake 1981). The major purpose and reason for the introduction of the privatization and commercialization programs in the country was a result of the failure of public enterprise in
the economy the need to reduce dependency of public enterprise on government/public purse and the urge to increase efficiency in public enterprise whose inefficiency was causing the governmental considerable embarrassment are shown.
The purpose of improving national economic is to improve the quality of the life the people and not to create easy avenues for foreign exploitation. Nigeria believes fully in international trade and relations provided they make life of Nigerians better. Mainly IMF and world bank prescriptions have been fully tries Nigeria in SAP (structural adjustment program)in the last two decades but, they have made Nigeria much Poorer and miserable. No nation surrenders the bastions of its economy to foreigners without adequate control except in colonial rule. If government wants deregulation it must be in accordance with the deregulation as emaciated by the ordinary people, private sector, while the public is expected to create right environment for growth and set the policy frame works.