CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
To be able transform into an industrialize economy; an underdeveloped economy has to be privately and commercially developed.
The importance of establishing public enterprises or corporation 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 enterprise 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 being commonly non successive because of government attitude towards public enterprises business management. In Nigeria, most government owned industries and establishments remain citadels of corruption, studies in inefficiently and consequently a heavy drain on the economy. As a means of combating this menace, the (IMF) and (World Bank) have advocated the twin policies of privatization and commercialization incidentally Nigeria has fully adopted this policy and is embarking on it with frenzy. For example, Nigerian breweries changed from the most inefficient and loss-making company before privatization to one of the most profitable business in Nigeria. Nigeria has more than 1,800 public enterprises at federal and state levels which can be categorised as follows;-
i. Public utility providing infrastructural services.
ii. Strategic industries such as petroleum and petrochemical, fertilizer plants, iron steel.
iii. Economic /commercial enterprises such as manufacturing of consumer goods insurance ,banks and hotel ,and
iv. Departmental / stationary boards designed to serve specific socials or development roles as university and research institutes. Ake (1981).
It is important to note that the introduction of SAP in 1986 serves as a bench mark in economic policy-making in Nigeria with the resultant, liberalization, deregulation, privatization and commercialization measures.
The critical question here remains how many of these policies have been able to restructure the political economy of Nigeria and in turn alleviating the yearnings and aspiration of the working class.
The world no doubt is moving towards capitalism and liberalization and any nation that is not moving towards this direction is seen as either not developing or even retrogressing. A capitalist economy is a free market economy which allows most economic decisions to be guided by the twin forces of demand and supply. Since capitalism discourages monopoly but encourages competitive market, it therefore enhances efficiency and high productivity which is very vital in any developing economy.