THE ECONOMIC IMPLICATION OF PRIVATIZATION AND COMMERCIALIZATION OF AILING INDUSTRIES IN NIGERIA
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THE ECONOMIC IMPLICATION OF PRIVATIZATION AND COMMERCIALIZATION OF AILING INDUSTRIES IN NIGERIA
1.1 STATEMENT OF THE PROBLEM
For some time now, public firms in Nigeria and Akwa Ibom State have been poorly managed and inefficiently administered.
According to data from various government ministries, public enterprises consumed up to N265 billion in a single year.
Previously, the Adeso (1969), Udoji (1973), Onosode (1981), and ALhakim (1984) commissions assessed and determined that state firms are accountable for massive wastes of expenditures, causing budgetary constraints and an unwarranted burden on the economy.
According to the research above, failures of government-owned firms occur because government agents have a predisposition to promote their own or the interests of particular groups at the expense of the public.
Furthermore, the lack of effective strategies, which is characterised by political insecurity, poor technology, a lack of basic infrastructure, overpoliticization of projects, and widespread incompetence in the management of public enterprises, is a result of excessive government involvement in the management process.
Thus, a combination of insufficient and expensive petrol supplies for electricity, a lack of transportation access for the transfer of raw materials and completed products, and the government’s slow distribution of funding resulted in the closure of the Aluminiun Smelter Company of Ikot Abasi in the year 2000.
As a result of the preceding discussion, it has become a national policy imperative to disengage the public sector from areas where the private sector has a comparable advantage to perform by turning around poorly managed and cash-strapped state enterprises,
whose inefficiencies have hampered economic development, thereby halting the monumental waste and inefficiency of the public enterprise sector.
This necessitated the establishment of privatisation and commercialization schemes by the government in order to meet Nigeria’s unique socioeconomic and political situations as part of the country’s structural adjustment agenda.
This government approach in reforming the economy has thus motivated this research on the economic implications of privatisation and commercialization of ailing sectors in Akwa Ibom State, with specific reference to the Aluminium Smelter Company of Ikot Abasi.
1.2 OBJECTIVES OF THE STUDY
The purpose of this study is to look at the economic implications of privatisation and commercialization of failing businesses in Akwa Ibom State, with a focus on the Aluminium Smelter Company, currently known as Rusal Aluminium Smelter Company, Ikot Abasi.
Furthermore, the following are the research’s specific objectives:-
(1) To identify the issues and potential for privatising ailing industries in Akwa Ibom State.
(2) To ascertain the reasons for the efficacy and ineffectiveness of service delivery in Akwa Iborn State’s public and commercial sectors.
(3) Determine the motivations for privatisation and commercialization of failing companies in Akwa Ibom State.
1.3 RESEARCH HYPOTHESIS
Ho Privatisation and commercialization of failing businesses have no effect on the economy of Akwa Ibom State.
H1 In Akwa Ibom State, there is no link between privatisation and commercialization of failing industries and efficient resource management for economic development.
1.4 THE SCOPE OF THE STUDY
The purpose of this research is to investigate the economic repercussions of privatisation and commercialization of failing industries in Akwa Ibom State,
with a focus on the Aluminium Smelter Company in Ikot Abasi, which is now controlled by Rusal Aluminium. This project will also investigate the causes of poor performance in government-owned firms.
Attention in this study will be focused on the past, present, and future prospects of the Rusal Aluminium Smelter Company, Ikot Abasi as a result of its privatisation and commercialization in order to carry out this research job properly.
1.5 SIGNIFICANCE OF THE STUDY
It is hoped that this study may inspire and inform others who may perform more research on this topic. The study’s conclusions will be valuable to both federal and state governments, core investors, corporate executives, and the general public who are interested in this topic.
1.6 LIMITATIONS OF THE STUDY
Some limitations of this study include: 1. Time and funding limits, which prevented complete covering of all intended locations for this investigation.
2. Due to a lack of access to text books and journals, the researcher was unable to obtain sufficient information on the issue. This is due to the fact that privatisation and commercialization notions, while long present in the Nigerian economy, have received increased attention in recent decades, making them appear to be novel in Nigeria.
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