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THE PROBLEMS AND PROSPECTS OF PRIVATIZATION IN THE NIGERIAN ECONOMY A CASE STUDY OF NIGERIA TELECOMMUNICATIONS LIMITED (NITEL)

CHAPTER   ONE

1.0                 INTRODUCTION

The needs of a society stimulate the design of a programmed.  In the programme, the missions and the objectives are clearly stated and all other thing required for its    achievement of the programme are mapped out.  This therefore suggests to the implementation of the programme that certain procedures need to be followed for the achievement of the peoples’ desire it is designed for.

The issue of privatization as a programme is relatively new to Nigeria.  It is an old issue in other countries like Britain, USA, and French etc.

The concept of privatization crept into our vocabulary simultaneously with the economy crisis.  The combination of stringent trade and exchange controls on the trend and over devaluation of the Nigerians on the other hand resulted in misallocation of resources, high incidence of capital flight and other problems which tended to undermined government control of the economy.

Indeed, matters tended to get worse with the persistence and determination of balance of payment problems.  The erosion of national credit, the inability of most holders of import licenses to effective by utilizing them owning to the death of confiding lines and acute shortage of raw materials as well as consumer goods pushed the country’s economy to a large of collapse.

Here, in Nigeria, the emergence of privatization as a major public issues owning to the inefficiencies outlined above which as resulted to poor management of resources and consequently, general economic down turn could be as a result of Nigeria political system.                                                           

“ECONOMY IS A FUNCTION OF POLITICS

Immediately often her independence, Nigeria became a sovereign nation.  Independent in political and economic considerations, coupled with the windfall gains from the Crude Oil and the emergence of political tissues among the various ethnic groups geared up by tribalism, nepotism, favouritism and other extinct vices lead to the various coup and counter coup in the political area.

Consequently, the constitution was abandoned decrees by various Military Government became the order of the day.  The cross effect of all these, based on the content of this research was inefficiency.  In the highest degree which is characterized with tight expenditure on government companies, poor management of the national resources, lack of co-ordination in various sub-sector of the economy.  Corruption in public sectors rose to its peak, formation of political ladings. 

(Inner-Cadicus), political god fathers, embezzlement of public funds, siphoning and looting of funds into foreign account by public of facers lynching the various heads of State crumpled the economic situation in the country.

Given these prevailing circumstances, the pressure for rational economic reform could no longer be resisted.  This led to Federal government of Nigeria, this same group of politicians.  In a bit to further expand their selfish business and consequently compounding the Nigeria economic problems under the leadership of Ibrahim Babangida, initiated a programme Structural Adjustment Programme (SAP) which among other things tended to be implemented through the so called rationalization and selective privatization of public enterprises.  It is against these background economic crises of the 1980’s the privatization policy was initiated.

 In order to legalize this policy framework, degree no. 3 of October 19988 on privatization came up.  Section 14 of this decree defined privatization as relinquishing of part of all the equity and other interest held by the Federal government or its agency.  In enterprises whether wholly or partly owned by the federal government ((NCPHB 1988) by this perception, government would restrict itself and its agencies.  In the provision of the enabling environment to enable the private shareholders achieve its desired objective.  These include efficiency in management that productivity job creation and exposition to international competition.

Privatization programme is being embraced as a reform by most countries.  In Nigeria, those in authorities decision makers (politicians) see it as an opportunity to expand their selfish business empires.  No wonder the last military government under the leadership of General Sani Abacha looted Billions and trillions of Nigeria currency into foreign account and initiated a programme and tagged it Vision 2010.  A committee was set up headed by Chief Ernest Shonekan and was commissioned to work out further moderations for effective and total relinquishing of the nation’s economic activities to the private sector.  A technical committee on privatization (JCPC) was equally set up and was chairman by Mr. Hamaz Zayyed. 

Nevertheless, Nigerian privatization has come to be problem now rest upon how it would be carried out on a well designed, properly co-ordinated sequence credible and widely acceptable way.

Furthermore, the operative question therefore is how viable would the privatization programme be as to make appreciable contribution the nations’ economic development.

To what extent will the citizen be responsible to the aims and aspirations of this government policy to what extend will the operation be realized to their responsibilities to engender discipline that would pave way for the realization of the objectives of this privatization programme.

This research seeks to critically evaluate this programme of privatization, expose the dangers and its benefits with special emphasis on operations of some already privatization companies in Nigeria and Nigeria equally to make predictions into furtheristic consequences of this privatization programme.

 The study equally extends to evaluate the effectiveness and success of the privatizations effectiveness and success of the privatization programme of the government.

 1.2           STATEMENT OF PROBLEMS

As the pressure for rational economic reform could no longer resist by the federal government of Nigeria, “privatization” as a reformation programme policy has been initiated, established but its implementation lays the problem.

There is difference between privatization in Western Countries and privatization in developing country like ours the environment counts.  Do we have the right environment?  Even if we do, its implementation has to be modified to suit our peculiar circumstances.

Given these prevailing circumstances, the following questions needs urgent attention:

-     To what extent will the citizens be responsible to the aims and aspirations of his government policy?

 -     To what extent will be the operation be alive to heir responsibilities to engender discipline that would have way for the realization of the objectives of this policy?

-        What is the faith of the common man in Nigeria?

These and more are the problems, which this research work seeks to address.

 1.3           SIGNIFICANCE OF STUDY

A study carried out for its sake, is of no practice use to humanity, hence the researcher try to tailor his research to the needs, both intellectual and practical of mankind as a justification for the time and resources (Human and Material).

The study therefore promised to be of immense value not only to the management students but also to all organization irrespective of size, background and activity the result of this research would hopefully expose the Nigerian economic situation and efforts being advanced by the Federal government to revamp the economy.  It is squally intended to X-ray the privatization exercise already in process by drawing inferences from some already privatization companies in Nigeria.

Professor Kuzr state, “in the long run in success or failure must depend upon the capacity and adaptability of the people on adopting new techniques and new ways of life they will work and to make scarifies.  In these understanding and discipline as traditional ways are supposed and new social order and conditions arise”.  He continued, capital may be attracted, skill and know how in limited quantities or borrowed but cloddy.  In themselves, these things alone, do not amount to development unless the forward movement.

The utility of the output of this study has both the manically and practical dimensions.  Its theoretical significance lies essentially in the fact that we shall, within the limits of the academic resources available to us given a fairly sufficient illumination.  In the context of privatization in Nigeria, therefore an attempt is made to put the concept in correct, in correct theoretical perspectives. 

Furthermore, a second theoretical scheme for study of this nature is imperative if we are to make any meaning progress how present effort towards a more rational economic reform.

 The Study and statement of the problems, therefore, justifies how the no individual group, individuals or organization can achieve its set objective without proper implementation of the programmes.  Therefore, the issue of designing, properly co-ordinated, sequenced, credible and widely acceptable way becomes a cardinal pre occupation of any government is out to achieve and sustain efficient operation.

 1.4     RESEARCH QUESTION

The following are the research questions:

(a)  How effective is the programme of the Nigerian government in redistribute of resources?

(b)  What will be the position and faith of common man/workers privatized under the core strategic investors?

(c)      Is efficient management a function of ownership?

(d)     What is the long-run implication of privatization programme in Nigeria?

 1.5     SCOPE OF STUDY

The scope of this research is limited.  It does not and cannot cover the entire affected establishment.  This is due to time and financial constraint.  It is therefore restricted to the study of only one organization located in Lagos state.

The name of the company under study is Nigerian telecommunication Limited (NITEL).

However, in every research work there must be problem in one way or the other and that data relating to the kind of study may not be available.

 1.6          LIMITATION OF THE STUDY

In as much as the study was that of a research work, one could not adequately conclude that if it was totally hitched free.  To ensure that realistic and dependable results were arrived at, one would realize that Nigerian government has embarrassed privatization are reformative programme.

Attentions are therefore drawn to the many official reports government white papers, periodicals.  In Nigerian, production, operations, management, newspaper and magazines, is constantly up date the literature.

 The research therefore has the following limitations:

i)       Not all the questionnaires distributed to workers were returned.

ii)   Some of the managers and other staffs, did not give correct information as required.

iii)     Death of books and articles in most of the states and Federal library.

 iv)     Financial constraints and time factor also limited the study.

 1.7              REFERENCES

 E. O. Adirika (1998):     Professional Selling, Enugu. Optimal Publishers.

 Knezerkh Stephen J. (1993):   World development Report and Workers In an

Intergrading World.  USA.  A World Bank Report.

 Lank S. Bunik C., Richard Mdorena and Thomas E. Vollmam (1977):

Principles of Operation Research for Management.  USA, Published by Richard D. Irewin Inc.

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