CHAPTER ONE
1.0       INTRODUCTION
There are rapid and sweeping changes taking place in the political economy of most developed and developing countries. This is dominated by liberal democracy in the political process and free-enterprise in the economic sphere. In the economic sphere, these changes are characterized by economic reform programmes whose fundamental objective is the rationalization of national economics for the achievement of efficiency and effectiveness in resource allocation and laying the foundation for future growth. By economic reforms, it means a significant movement by governments to expand the use of market signals in shaping production and distribution patterns, and the reduction of direct state ownership and direct stale controls over the economy.
Typically, these reforms occur across several important sectors and include changes in the degree of stale ownership and regulation, in pricing, personnel and other management decisions at the enterprise level.
It is important to observe that state enterprises suffer from fundamental problems of defective capital structure, excessive bureaucratic control or intervention, inappropriate technology, gross incompetence and mismanagement, blatant corruption and crippling complacency which Monopoly engenders. Inevitably, these shortcomings take a heavy toll on the national economy.
Nigerian economy from colonial history through independence and up till today has been characterized by huge government investment in Public Enterprises (P.E.) had always arrived in a mixed economic system where government at all levels, being the major spender, sought to nurture and increase commonwealth for the greatest good of the greatest number through heavy capital investment.
The deciding factor propelling such investments by successive governments in Nigeria was (and still is) the availability of enormous spendable resources more than anything else. Thus, one might, especially given the topic of this discourse, well, extend the argument to say that the shortest act to our economic blues is to legislate government out of the control of excessive disposable resources via privatization.
Privatization has emerged as a major public policy issue in many countries of the world in the decade of the 80's, following the revival and efficiency of the doctrines of the market forces in the leading industrial countries. This programme entails the transfer of some government owned enterprises to the private sector, either fully or partially and the adoption of National commercialization practice in some enterprises which still remain publicly owned.
Thus, going by definition, section 14 of the Decree Number 25 defines privatization as the "relinquishment of part of all the equity and other interest held by the Federal Government". Commercialization, which appears to be a different concept from privatization, aims to re-organize enterprises whether owned wholly or partly by Federal Government, to profit making ventures. Thus, the key words to note in the case of enterprises to be commercialized are: re-organization and profit-making.
For the avoidance of doubt, however, it is important to state that, the term privatization does not just mean the transfer of ownership of shares or equity from one sector - the public sector, to another sector. Nor does it just mean the relinquishment of part or all the equity and other interest held by the Federal government or its agencies. The term privatization means a good deal more. It also means the transfer of power and functions from the public sector, viz-a-viz from the Government, to the Private sector. Suffice it to say that, this is the crux of the matter that has attracted divisive debate.
The case for privatization is clear evidence that P.E. have contributed to our economic stagnation and poor national image. The foregoing state of Affairs partially reveals why government justifiably did a rethink on increased investment in such enterprises. Privatization is not a cure all panacea for economic difficulties, but a situation where the option of continued investment in P.E. has been proven a failure, the trial of the next best alternative (Privatization) recommends itself to consideration.
Efficiency and effectiveness today demand that government units itself to a. regulatory role, creating enabling environment, facilitating and encouraging the activities of the private sector. In line with this over arching need, the Federal government of Nigeria is determined to develop, install and maintain institutional capacity, which is compliant with our defined need. Moreso, government role in this exercise must therefore be seen to be directed at creating relevant institutional and regulatory framework with the necessary incentives to facilitate the development of the private sector as the engine of economic growth as well as protect the public interest.
The justification for privatization is to assist in restructuring the public sector in a manner that will affect a new synergy between a learner and more efficient government and a revitalized, efficient and service-oriented private sector. Hitherto, privatization was directed at removing the financial burden which these enterprises constitute on the public and release resources for the essential functions of government.
Thus, this study is precipitated on these real issues aimed at examining government role in the privatization exercise as a deliberate strategy to entrench efficiency and effectiveness in our public enterprises.
Here lies the litmus test for the Bureau of Public Enterprises (B.P.E) whose implementation task calls for optimizing its organizational skills and repositioning its administrative machinery in the pursuit of its mandate.