Privatization Of Government Owned Enterprises A Strategy For Better Performance

INTRODUCTION
1.1 BACKROUND OF THE STUDY
Privatization enter proper usage in Nigeria only recently when people question the efficiency effectiveness of public sector activities especially a demonstrated by the Nigeria Airways (P.H.C.N) National electric power Authority, Nigeria Railway corporation (NRC) etc.
Privatization has been defined in so many ways by so many people and scholars. Privatization is not just denatinled in size of an inefficient and ineffective public sector is reduced by transferring some of its functions to a relatively make efficient private sector. The performance of the private sector is measured in terms of profit ability cost serving consumer satisfaction on the other hand, public sector performance is measured in terms of what was intended and its social benefit factor.
Privatization has increasingly significance element in structural adjustment programme (Sap). As condition of their support for sap, both the TMF and the world bank instead on a significant reduction in public expenditures selective withdrawn of subsides and adoption of other policies.
To faster, efficient use if resource of for there are about five hundred (500) companies and parastatals in which the Federal Government invested over N36 billion as equity loans and subvention from which she has been realizing less than 500 billion annually.
These enterprises also incurred huge depts. Which are being repaid and serviced by government.
“About 2/3 of federal enterprises as commercial Ventures. Estimate place the public enterprise. Sector contribution GDP about 35% and nearly 22% of total employment in the formal sector of the economy. He goes on to say that enterprises make large and huge chain government resources. The federal government recently estimated that about 40% non- salary recurred expenditure and 30% of its capital budget have gone annually towards public enterprises.
These investment have provided meager yielding less than N1 billion in dividends and loan repayment from 1980- 1985.
Furthermore, it has been argued that economic efficiency results from privatization. Privatization therefore results in higher profit maximization. Privatization improves the general economic environment of nature through “ exchange rate” and this encourages capital inflows and arrest capital flight. Where foreign investors are encouraged to acquit interest in privatized state owned enterprises. Incremental equity. Inflows improved that balance of payment position of country and enhances the value of its currency, yet restricting large capital intensive enterprises such as NITEL and PHCN will require foreign investors most attraction to the privatization programme would most certainly be the allure of participating in the ownership of some of the biggest and potentially most profitable companies in the kind and playing in the vast Nigerian market. Private investments were therefore law. Government with relatives large capital based therefore face an irresistible computation of going into direct investment in economic ventures, thus, a formal commissioner of commerce and industries in the defunct Anambra state Iwobi has to say.
In the early days of out political independence government felt obliged to invest directly and to combine its mandatory role of promoting the industries. Given the recently global economic enterprises distorting governments, revenues have continued to drop. Moreover, some of this government owned enterprises have turned to constitute a draw on government purse instead of self being financing.

1.2 STATEMENT OF PROBLEMS
The question of privatization came to time light in Nigeria, not long- ago following public outery against the apparent gross.
Inefficiently hand bottleneck that seen to have made valid most public enterprises. Privatization remains an increasing in significant element in the structural adjustment progamme. So for there are about 500 companies and parastatals in which when the federal government has invested over N36 billion as equity loan and subventions, from such establishments the government loan been realizing less than N500 million annually. These enterprises have continued to main huge debts, which are being repaid and serviced by government. Ukigwe (1985) indicates that public enterprises make huge claim on government resources. The federal government recently estimated that about 40% no- salary recurrent expenditure and 30% of unit capital budget have gone annually towards these enterprises.

1.3 OBJECTIVE OF THE STUDY
This project is aimed at achieving the following objectives:-
(a) To identify the problems factors militating against effective privatization of some government establishment with special reference to P.H.C.N.
(b) To ascertain the extent to which government involvements had contributed to the poor performance of public enterprise.
(c) To evaluate how privatization has contributed in many ways to the enhancement of economic development in Nigeria.

1.4 RESEARCH QUESTION
(a) Is government involvement in public enterprises instrumental to their poor performances as well as the problems confronting them?
(b) Are there some factors that have tended to militate against the privatization of most public enterprise with specific reference to P.H.C.N?
(c) To what extent has the policy of privatization contributed to economic development in Nigeria?

1.5 SIGNFICANCE OF THE STUDY
At the end of the day, the outcome of the work will turn out to be great significance as indicate here under:
(i) The outcome of this research work could serve as a reference material for future researchers.
(ii) My recommendation will go along way in helping the affected organization tackle the identified problem.
(iii) The research will also be of help to technical committee for privatization and commercializing their objectives.

1.6 LIMIATIONS OF THE STUDY
As study of this nature could have taken about on year uninterrupted, but this was not the case in this study. The study covered rather a period less than a year because of academic engagements.
(1) Initial unwillingness of the authories of the organization to allow the researcher to conduct the research for fear of revealing their secrets.
(2) The unwillingness of some employees to fill the questionnaire for year of being victimizing glared or sacked.
(3) Financial constraint, which limited the researcher form putting up more comprehension approach to the study.
(4) Time constraint, which so much limited the researcher from adopting a more comprehensive approach to the study.
(5) Academic workload, which so much limited the researcher from doing a through and comprehensive work.

1.7 SCOPES OF THE STUDY
Scopes refers to the areas, which the researcher covered while writing the project. Due to the nature of the study/ covered P.H.C.N located at Onitsha, since I used is as my case study.

1.8 DEFINITION OF TERMS
PRIVATIZATION: It is the process of diverting government ownership, control and management of enterprise services and agencies to the private sector consisting of private individuals or firms seeking their own profit.
Privatization is not confined to any subject of my nations economic and social structure. Privatization program could be pursued in manufaction. Agriculture and transportation, sub sectors or excess in the provision of basic services such as water, power, education and health.

PUBLIC SECTOR: This is an establishment owned, financed and managed by the government either state of federal. It is mainly for providing services to the people with little or no profit. Government normally subsidizes them.
PRIVATE SECTOR: This is refer to the part of the economy not directly under state control. They are owned, financed and managed by the owners usually individuals or group of individuals or group of individuals.
ENTERPRISE: A business company or firm, local, large- scale or state owned. It is a business activity developed and managed by individual or state.