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This article argues that -owned firms in have become a financial burden for the government.

They rely exclusively on the government for subventions and grants. To achieve economic efficiency in Nigeria, SAP will employ privatization as one of its tools.

The purpose of the study is to determine why government-owned firms and parastatals that were initially established following commercial lines have underperformed their private sector counterparts despite receiving large subsidies from the body that established them.

The research is based on both primary and secondary sources of information. The administration of questionnaires, periodicals, newspapers, and books constitutes the data. Chi-square is the statistical method used to test the hypothesis.

The researcher believes that the findings and recommendations will be of great assistance to government-owned firms, which make up the majority of the public sector of the economy. Through the of data administered at random to both public and private firms in , the research uncovered a number of interconnected conclusions.

As a result of this research, it is suggested that there should be debt equity swap methods. This will contribute both managerial expertise and new capital facilities. Also, foreign investors should be encouraged to invest in Nigeria once the government has established a favorable investment climate. Lastly, the allure of technological and administrative expertise that may be available in our .

If all of these conditions are met, Nigeria will progress toward economic development.





Nigeria is one of the developing nations classified as third world nations. Concerned nationalists believed that entrusting private persons with the responsibility of national development would be extremely risky and impractical for the nation's autonomy. To assist in planning, guiding, regulating, directing, and controlling the economy and the rate of national development, the government formed government-owned corporations and parastatals.

In contrast to the government's lofty expectations, the sum allocated to the establishment of these businesses has not been noteworthy.

These corporations exhibit a number of depressing effects, such as inability to account for funds put in the company, poor service quality, job insecurity for employees, etc.

Their incapacity to account for government-allocated funds is the gravest of all their shortcomings. The Nigeria coat corporation, Nigeria Airways, Nigerian Telecommunications (NITEL), National Fertilizer Company (NAFCON), Nigerian National Petroleum Corporation (NNPC), and the National Electric Power Authority stand out among others. Amongst all of these parastatals, the services of the hasty establishment (NEPA) have been the most excruciating for consumers, to the point where they have adapted to never expecting power from it. These are examples frequently mentioned by individuals who argue that privatization of government-owned firms will result in greater efficiency.

The government's concern over the poor performance of its enterprises and parastatals was a crucial role until the second oil guide wave hit the world and Nigeria's oil began to have dangerous implications.

In 1981, President Alhaji Shehu Shagari convened a second commission on parastatals to analyze their operational issues and make recommendations on how to resolve them so that they can perform the effective services for which they were created. The report proposed that parastatals with a commercial focus be reformed so that they are subject to their discipline.

It observed that many of the problems that appear to be internal to parastatals stem from the socio-social and socio-political environment in which they operate, and that to propose only internal reforms to parastatals or to get them to meet public expectations is to ignore significant roles expected of them. To interpret this, the commission suggested privatizing some government-owned enterprises.

In the country's efforts to revitalize its economy, it was obvious that the issues surrounding government-owned companies and their management had taken center stage. It did not take long for him to be deposed. The former first head of state from 1984 to 1985, Muhumedu Buhari, created a study panel to examine the financing, profitability, and performance records of state-owned enterprises. The group consists of Ali-Al-Makin (then managing director and Chief executives of the Bank of the North Plc). As the leader, this group was tasked with identifying the major problems of these enterprises as vague and conflicting objectives, inadequate autonomy, inflexibility in decision making process, inappropriate capital structure, under-utilization of assets, lack of good credit control system and inability to collect debts, lack of adequate cost control measure, ineffective and inefficient management on formation and accounting system, absence of financing, etc.

Despite the enormous sums of money poured into these businesses, they have failed to attain the necessary minimal level of efficiency.

In his National Annual Budget speech for 1986, then-president Ibrahim Babagida made it plain that public corporations constitute an unnecessary burden on the government.

The government's current budgetary limits have exacerbated their problems, necessitating a suitable solution to the accumulated losses that the parastatals have contributed to the economy.

Therefore, for strictly promotional reasons, the government is compelled to take a firm stance against these parastatals, and it was for this reason that it decided to take some steps towards privatization.



Widespread consensus holds that the private sector is best suited to handle the provision of particular commercial activities.

This is due to the public's loss of confidence in public corporations as a result of poor services and an unnecessary bureaucratic process that is inefficient and poorly responsive to user requests; even if the public sector were capable of addressing some of these issues, it does not operate with its magical services.

Another issue with the public sector in Nigeria is that they have failed to fulfill their obligations to the various levels of government that owns them. This has been observed most notably where public companies are unable to generate the capital invested in them by the government and are therefore dependent on government funding.

As a result, the government chose to privatize some of its firms and entrust some of its concerns to private individuals.

The issue to investigate in order to determine the impact of privatization on Nigerian public firms.



Privatization has been a hot topic in Nigeria's economic operations and policy formation. Consequently, the following are the aims of this research project:

Determine whether this privatization approach is justifiable in light of Nigeria's expanding economy.
Determine the efficiency of privatization of public firms in broadening public company ownership.
To evaluate the employment impact of privatization.
To determine how to promote the engagement of Nigerian citizens in economic activities through the purchase of company shares, which are considered productive investments.


This research topic is constructed so that the researcher may evaluate the effects of privatization of government-owned firms on the economy. Some of these inquiries include:

To what extent would this privatization assist to the economic development of Nigeria?
How much advantage did private companies have over public corporations?
How would the general populace be affected in order to cope with the situation?


1.5 Significance of the Research

The purpose of this research is to examine the product validity of public corporations and the process of reducing government ownership and management of enterprises, as well as the expansion of private sector engagement in state ownership of government-owned organizations and assets.

By privatization, the state can be viewed to be attempting to diminish the size of the public sector, particularly where corporations have continued to engage in operations that private firms could perform more efficiently.

This research is useful since it identifies the advantages of privatization versus government ownership of firms and its effect on the economy.



This study examined the extent to which privatization will assist in resolving the difficulties of government-owned firms in Nigeria.

The preceding statement describes how privatization as a government policy action may be preferable to government participation in the formation and administration of public companies.

This study include enterprises that will be totally privatized, such as hotels, poultry farms, insurance firms, and wood industries. On the other hand, this study also includes industries that will be partially privatized, such as banks, steel rolling mills, and media organizations.

Regarding the enterprise investigation, a Technical Committee on Privatization and Commercialization was responsible (T.C. P.C). The government established this committee. However, owing of the unequal distribution of industries throughout the country.

The national privatization policy would be treated as a national occurrence.

Several constraints were discovered during the study.

The problem with No-Return was that not enough questionnaires were collected.

The availability of funds was a difficulty for the researcher.

Time – The available time for the study was limited.



Based on the belief or theory that something will occur in the future.

depends on the relevance of practicality to human interest.

PREDICTIVE: (To tell in advance) (To tell in advance). To determine or state the effect

future economic effects of the reduction of government ownership and management of firms.

To relinquish government holdings in public enterprises.

ENTERPRISES: One or more businesses with a common owner.

companies. A phrase used in production cessation to differentiate the reporting unit from the firm or control unit.

This is the state of insuring efficacy since it has been accomplished.

with proper etiquette.




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