THE problem OF FINANCING government CORPORATIONS
THE PROBLEM OF FINANCING GOVERNMENT CORPORATIONS
THE PROBLEM OF FINANCING GOVERNMENT CORPORATIONS IN ABSTRACT
This research was carried out on the problem of Financial Financing Government Corporation and a specific reference with TRACAS, and these are the areas that this research work concentrated on when carrying out this research work.
The first chapter serves as the research work's introduction. This chapter also includes the study's background, problem statement, research question, and so on.
The study's data came from two main sources, including original data: To gather information from respondents, questionnaires and oral interviews were employed.
Secondary data: Journals, magazines, and other sources related to my inquiry will be reviewed. A thorough assessment of direct and indirect literature on books, journals, and previous publications was conducted. This study's research instruments comprise an oral interview and a questionnaire.
The questionnaire is designed in such a way that it includes both closed and open-ended questions. In the data treatment, simple tables, pie charts, and percentages were used, whereas chi-square was used in the study work. Based on the data, conclusions were taken and recommendations were made in the fifth chapter of this book.
1.1 BACKGROUND OF THE STUDY
The most common manifestation of director improprieties in public firms is deception in financial statements.
Manipulation of the stock exchange, business bribery of governmental authorities, either directly or indirectly, to gain favourable contracts. Embezzlement and misappropriation of funds, for example.
These various sorts of directorial criminality are mostly violations of delegated or implied trust, which can be divided into two categories: asset value misrepresentation The financial loss from directorship wrongdoing, as big as it is, does not match the damage to social connections caused by bad governance.
Directorial criminality and mismanagement, on the other hand, undermine trust and foster distrust. Directorial impropriety, while having civil repercussions, is a crime in the true sense because it is a violation of criminal law.
And again, because corporate law is often perceived to be biassed against corporate stockholders. It is no longer unusual for shareholders to manage or control their firms,
and because directors improprieties lead to bankruptcy, criminal law has responded by establishing proper machinery for controlling the profits of public corporations.
However, rising corruption, management inefficiencies in staffing (many governments treated PES as easy conduits for job creation and a convenient vehicle for patronage distribution without regard for their economic viability),
inflation and rising serious “government failures,” and the limits of PES as major players in economic development. Many PES suffered from technological deficiencies in addition to management deficiencies.
Many of the PES were either imported through foreign aid or soft loans from overseas, and were either equipped with cheap or second grade machineries, contributing to a low capital/output ratio, and were established without adequate attention for their economic and financial sustainability.
Historically, the federal government has had few business ventures. There were several early examples of the federal government sharing ownership of normally private corporate enterprises.
The federal government has a history of avoiding sharing ownership with private organisations. In 1903, the federal government made its first outright acquisition of a firm.
Since that time, a number of corporate bodies have been founded as part of the federal government, with expansion occurring in spurts and primarily in response to catastrophes. The first large-scale application of the corporate option coincided with the mobilisation for World War I.
Later, the 1930s Depression stimulated the formation of other organisations (for example, the Reconstruction Finance Corporation and the Tennessee Valley Authority), and World War II prompted the formation of further government corporations.
After each of these situations passed, many of the corporations that dealt with them were dissolved or merged into permanent executive branch agencies.
In 1945, as a result of the profusion of corporate organisations formed for the war effort. The Government Corporation Control Act (GCCA, 59 Stat. 841.) was passed by Congress.
The act standardised corporate budgeting, auditing, debt management, and depository practises. Government companies remain ordinary agencies, subject to all laws governing agencies, save where exempted from coverage by provisions of general management laws, despite any exceptional provisions in their enabling act.
The GCCA is not a generic incorporation act like those in the states.
The enabling law issued by Congress serves as the charter for each federal government business.
The GCCA also lacks a broad definition of what constitutes a government corporation.
It merely lists the organisations that are covered by the act.
In addition to the enumeration of corporations in the GCCA, there have been various alternative listings of corporations accessible, each unique and based on the compiler's definition.
The corporations range from large, well-known corporations such as Nigeria postal services and the Federal Deposit Insurance Corporation to small, low-visibility corporate bodies such as the Federal Financing Bank and the Federal Prison Industries (UNICOR).
1.2 STATEMENT OF THE PROBLEM
The problems that government parastatals face are caused by a variety of sources.
The main reason for this is a lack of proper funding. Due to insufficient funding, government parastatals tend to function at low capacity or inefficiency, resulting in poor service to the general people.
Anambra state transport company, for example, has been having financing problems: is it because government does a poor financing effect, earring for transport and other sources of revenue,
or is it because government earning from both domestic and foreign sources has been affected, and government subvention to corporations has been drastically reduced?
1.3 OBJECTIVES OF THE STUDY
The goal of this research is to learn about the funding issues that have hampered government corporations' efficiency and profitability, as well as how to fix them.
i. Determine whether a commercial bank finances the activities of Anambra state's transport corporation.
ii. To ascertain whether the high interest rates offered by commercial banks have an impact on the loan-seeking habits of Anambra state's transport companies.
iii. Determine whether proper financing of Anambra state's transport firm has any effect on the quality of services provided to clients.
iii. Determine whether the government corporation is experiencing financial difficulties.
1.4 RESEARCH HYPOTHESIS
H0: Commercial banks do not fund the activities of Anambra state's transport corporation.
H1: Commercial banks' involvement in the activities of Anambra state's transport firm.
H0: The higher interest rates paid by commercial banks have no effect on the ability of Anambra state's transport corporation to receive loans.
H1: The increased interest rates offered by commercial banks make it difficult for Anambra state transport companies to get loans.
1.5 RESEARCH QUESTIONS
From the beginning. This research will provide answers to the following questions:
i. Does a commercial bank finance the activities of Anambra state's transport company?
ii. Does the high interest rate levied by commercial banks effect the loan seeking habits of Anambra state's transport companies?
iii. Does proper funding of (TRACAS) have any effect on the quality of services provided to customers?
Is there any financial difficulty with government cooperation?
1.6 SIGNIFICANCE OF THE STUDY
The relevance of this research study tends to enhance the researcher by unravelling the corporation's (TRACAS) financial challenges in particular and other corporations in general.
It is critical to investigate the commercial funding of TRACAS since failure to do so may jeopardise the corporation's operations, leaving the general public, who are TRACAS's beneficiaries, dissatisfied.
It is also important to investigate this area of research because a shortage of funding will halt operations in an Anambra state transport company.
Members of the employees will become redundant as a result of this. TRACAS, as we all know, plays a crucial role in providing transit for the corporation; for it to cease operations owing to a lack of proper finance would be a major setback for the state government.
1.7 SCOPE OF THE STUDY
The research looks at the various sources of funding for TRACAS AND OTHER PUBLIC CORPORATIONS IN ANAMBRA STATE, such as Anambra Broadcasting Service.
The research will look into the corporation's investment turnover, profitability, and viability. It will establish whether or not the funding of these firms has been enough, and suggestions on how to improve company financing will be provided.