ABSTRACT
Despite an impressive level of Commercialization activity across the globe and the upsurge in research on the operating performance of Commercialized firms ,in both developed and developing economics, our empirical knowledge of commercialization in Nigeria is limited. This study appraises the post- Commercialization performance; of public enterprise in Nigeria with particular focus on AEDC. The specific indicators examined are profitability, productive efficiency, employment and capital investment. Data were collected through questionnaire interviews and published materials. Simple [percentage and chi-square test were employed or the hypothesis respectively. The results revealed significant increases in technical efficiency in the affected enterprise reduction of politically motivated resource allocation has unquestionable being the principal benefit of Commercialization. The researcher recommended that privatization will go a long way to increase efficiency for AEDC Plc in Nigeria economy
CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
The history of public corporation (enterprises) in Nigeria dates back to the colonial era. The private sector was the traditional structure of the world’s economies. The Nigeria economy was initially private sector based. The public sector emerged in Nigeria as a result of the need to harness rationally the scarce recourses to produce goods and services for economic important, as well as for promotion of the welfare in Nigeria became significant during the period after independence 1960’s.
The railways were probably the first major example of the public sector enterprises in Nigeria. at first, conceived mainly in terms of colonial strategic and administrative needs, they quickly acquired the dimension of a welcome economic utility for transportation of goods for intentional commerce, like cocoa, groundnut and palm kernels. Given the structural nature of the railway in the metropolitan countries, it would hardly be expected that the Nigeria Railway Corporation could have been started as any other project than as a public sector enterprise for such mass transportation.
The colonial administration was the nucleus of necessary economic and social infrastructure facilities that private enterprise could not provide facilities like railways, roads, bridges, electricity, ports and harbors waterworks, and telecommunication. Social services like education and health were still substantially left in the related hands of the Christian mission. But even at this initial stage government itself moved positively into some of the direct productive sector of the economy. The stone quarry at Aro, the colliery at Udi, and the saw mill and furniture factory at Ijora were the early stages.
The emergence of the crude oil industry into the Nigerian economy, after the civil war in the 1970’s, with the associated boom, intensified government involvement in production and control of Nigeria economy. The Nigeria enterprises promotion Decree of 1972, which took effect on 1 April, 1974, with its subsequent amendment in 1976, provided a corporate basis for government of enterprises. Given these developments, public enterprises at the federal level had exceeded 100 in number by 1985; and these has spread over agriculture, energy, mining, banking, insurance, manufacturing, transport, commerce etc. Between 1975 and 1995, it was estimated that the federal government of Nigeria had invented more than 100billion in public enterprises.
A survey in (1991) by the defunct technical committee on privatization and commercialization (TCPC) predecessor of the present; Bureau for public enterprises (BPE) showed that Nigerian had about ,1,500 public enterprises about 600 of these were owned by the federal Government while the rest were owned by both states and local governments.
In summary, the essence of this project is to investigate the effect of the commercialization policy that is to assess the performance of power holding company of Nigeria (PHCN) as commercialized enterprises and know whether the policy has actually enhance efficiency in the corporate or not.
1.2 Statement of Problem
This work titled “commercialization and efficiency of public enterprises” the study seek to know in general whether commercialization can influence efficiency in public enterprises. The public enterprises of Nigeria from 1980’s fill till date witnessed steady economic deterioration and seemingly faulty economic policies. At the beginning of the 1980’s, the country had entered difficult times. Scarcity of foreign exchange had set in. by the mid 1980’s, reality had downed on the nation’s economy. Retrenchment of workers was rampart in both private and public sectors. There were inflation, very high level of unemployment affecting both skilled and unskilled workers, and low level of plant capacity utilization. This was traced to global economic recession which opened with the decade of the 1980’s. This had forced federal government, under President Shehu Shagari, to embark on an economic stabilization programme (Aboyade, 1974).
Thus, Nigeria’s precarious fiscal and monetary posture could no longer sustain the requirement of it’s public sector enterprises, particularly since they performed below expectations in terms of their return on investment and quality of service. Began to suffer from fundamental problems of defective capital structure, excessive bureaucratic control and interve4ntion, in appropriate technologies, gross incompetence and blatant corruption, external debt obligations and foreign exchange misalignment; Nigeria and many other countries of Africa were strongly advice by the world wide lending agencies, particularly international monetary fund (IMF) and world bank to divest their public enterprises as one of the condition for economic growth and development.
1.3 Objectives of the study
This study is set to achieve the following objectives of public enterprises:
(i) To get an insight into what is really the cause of inefficiency in the public enterprises.
(ii) To increasing productive efficiency in public enterprises
(iii) To examine commercialization policy as a tool for revitalizing public enterprises.
(iv) To strengthening the role of the private sector in the economic which will grantee employment and higher capacity utilization.
(v) To make recommendation based on findings
1.4 Statement of Hypothesis
In consonance to the above objective, the folo1wing hypothesis are formulated
Hypothesis One
Ho: Commercialization is not positively related to the inefficiency of public enterprises
Hi: Commercialization is positively related to the inefficiency of public enterprises
Hypothesis Two
Ho: The quality and quantity of service offered by public enterprises are not dependent on commercialization.
Hi: The quality and quantity of service offered by public enterprises are dependent on commercialization.
Hypothesis Three
Ho: That public enterprise does not affect commercialization in achievement of goals.
Hi: That public enterprise affects commercialization in achievement of goals.
1.5 Significance of the Study
It is pertinent to note that, the findings of this work should be of great benefits to the Abuja Electricity Distribution Company(AEDC) Idah Branch, Kogi State under study and some other related companies, as well as serving as a starting point for further research. Also to enable the students of business administration and management of all level, to know the efficiency of commercialization policy and its effect on AEDC , in this situation, the students have served the purposed of policy evaluation for the government.
1.6 Scope and Limitation of the Study
This study is directed toward the Nigerian public enterprises. There will be a brief review of public enterprises with emphasis on AEDC Plc which is used as a case study.
A thorough analysis of the historical development and operations of public enterprises in Nigeria will be fully touched. The duration covered by this research is divided into two periods i.e. the period before commercialization and after commercialization of AEDC.
1.7 Definition of Key Terms
The policy of commercialization and privatization are tools of economic reform; Olisambu (1993).
Commercialization
Is a situation whereby government grants full or partial commercial status to public corporation which enable them to operate strictly under business principle and practice without undue government control or intervention and the same time exercise absolute financial independence in process of its operation. Commercialization involves public corporations, agencies in accordance with prevailing economic and market conditions so as to provide fruitful and efficient services to the market of the public. They are given a parallel opportunity to compete with those organized private sector in style that are efficient and have huge profit maximization as a driving goal, which enhance national development and economic growth.
Privatization
The concept of privatization is seen as the government policy that deal with selling public enterprise to individuals groups, and organizations so that , as private organization, they should operate under the principles of productivity, effectiveness, effi0ciency and viability as well as profit maximization rather than public interest . the privatization and commercialization Act of 1988 and the Bureau of public enterprises (BPE) Act of 1993 define privatization as the relinquishment of part or all of equity and other interest held by the federal government or any of its agencies, in enterprises whether wholly or partly owned by the federal government.
Efficiency
Oxford English Dictionary defines efficiency as fitness or power to accomplish or success in accomplishing the purpose intended, adequate power effectiveness efficacy. The Encyclopedia of the social sciences, define efficiency as an input-output relationship; that is maximum work achieved for minimum input of energy or resources. So it is the notion of “Optimization” where by maximum satisfaction is obtained for a given outlay of resources.
Public Enterprises (Corporation)
Are public or government institutions, agencies which are created solely owned and mange by the state to run certain public enterprises of the specialized nature requiring businesslike and administration. According to Ogunna sees a public corporation as “a semi autonomous body established by government under a law to provide specialized social or economic services to the people. They are also vies as legal personality that can sue and be sued, negotiate, sign contract etc”. In Nigeria national petroleum corporation NNPC etc.
The power holding company of Nigeria (AEDC) is being empowered to serves as the current electricity corporation of Nigeria (ECN).
1.8 Organization of Work
This study in a nutshell, emphases on the efficiency of public enterprises in relation to AEDC and comprise of five chapter.
The chapter one deals with introduction aspect which covers background of the study , statement of problem, objectives of the study, statement of hypothesis, significance of the study, scope and ,limitation of the study, definition of key terms, organization of work and end of chapter reference.
The chapter two deals with literature review which covers historical background of AEDC, conceptual issue, treason for government investment in public enterprises, general assessment of performance of public enterprises, prospect and challenges of , relationship between and efficiency of public enterprises end of chapter reference.
Chapter three covers methodology which deals with research design, area of study, source of data collection and some relevance issues.
Then, chapter four cover data presentation, analysis and interpretation which deal with introduction, data presentation and analysis and test of hypothesis.
Lastly, chapter five cover summary, conclusion and recommendation, which deal with summary of findings, managerial implications, conclusion, recommendation, bibliography, and appendix.
1.9 End of Chapter One References
Dick O. Uduma (2003) Contemporary Public Administration, the Nigerian Perspective; Agmasun Publisher Ltd. Enugu
Rulph Nwatu Jnr. (1983): Element of Public Administration. A Concise View; John Jacob’s Classic Publisher Enugu.
Nwoye, M.I (19978): Management Practices and Performance Determination of Public and ,Private Sector Enterprises In Anambra, Edo And Delta States of Nigeria: A Factors Analysis.
National Productivity Centre (1991): Productivity Day for Self-Reliance and Excellence.
Federal Republic of Nigeria (1986): Structural Adjustment Programmed (SAP) For Nigeria. Lagos Federal Government Printers.
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