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Public enterprises are created in all countries of the world to accelerate economic and social development. Yet, increasing evidence indicates that most public enterprises either do not contribute strongly to national development or do not perform their public service functions effectively and efficiently, leading to policy-makers engaging in continuing debates over whether or not state-owned corporations are viable to economic and social development; and why so many of them have failed to deliver the services for which they were created, and how their management can be improved upon to achieve efficient service delivery and engender national development. These issues are more crucial as shortage in public goods have been unprecedented hence the epileptic power supply issue, public water supply that has gone to social services is essential for human and national development. The data for this study were purposely collected through the secondary sources and analysed using content analysis approach. Some schools of thoughts have blamed it on the socio-cultural milieu of the developing nations. Others blamed it on the relationship of the developing nations with the developed nations. This paper examines the Nigerian Public Enterprises and attempts expatiations on the status of its performance from the standpoint of modern organisation theory.



Nigeria’s Public Enterprises are generally corporate entities other than ministerial departments; they derive their existence from special statutory instruments and engage in business type of activities to provide goods and services for the cultural, social and economic upliftment of the citizen. These include corporation, authorities, boards, companies and enterprises so owned and operated (Jerome, 1999).

The contemporary globalization, liberalization, marketization and structural transformations of national economies have contributed to the expansion of the private sector, on the one hand, and downsizing of the public sector including dismantling or divestment of public enterprises, on the other, earmarking two main objectives – giving more space to the private sector to function as the main engine of growth and at the same time, by downsizing and divesting inefficient public enterprises, save costs and generate more revenue, which are the cardinal arguments of privatization and commercialization. Nevertheless, the divestments and dismantling of Public Enterprises, have continued to play significant roles in many countries, both developed as well as developing especially in the Sub-Sahara Africa, the principal suppliers of social services, some relevant to the attainment of the Millennium Development Goals (MDGs), especially in the areas of employment generation due to the slow growth of the private sector, the main sources of employment in many countries such as Nigeria (Abubakar, 2011).

These developments have necessitated painstaking and meticulous review of the role of the Public Enterprises in socio-economic development of countries. Several scholars (Abubakar, 2011; Nwoye, 2011) have argued that the current debate on Public Enterprises is no longer whether Public Enterprises have a role to play in national development, but on what that role should be and how it should be played, as it became crucial that new Public Enterprises must perform efficiently and effectively and where appropriate, under market conditions to excel. The reform agenda of Public Enterprises include, inter alia, the issues of management, structures, performance monitoring and feedback arrangements including exploring options of private/public partnerships etc, encapsulated in privatization.

Since the 1930s and particularly after World War II, numerous State Owned Enterprises (Public Enterprises), were created in both developed and developing countries to address market deficits & capital short-falls, promote economic development, reduce mass unemployment and/or ensure national control over the overall direction of the economy. By providing capital and technology to strategic areas where the private sector either shy away from or lacked the capacity to invest (such as heavy industries, infrastructure etc), most governments resorted to Public Enterprises to increase capital formation, produce essential goods at lower costs, create employment and generally contribute to the economic development of the country. This trend continued till the early eighties (Adesanmi, 2011).

However, increased corruption, management inefficiencies, overstaffing (without due regard to their economic viability, many government treated Public Enterprises as easy conduits for job creation and a convenient vehicle for patronage distribution), inflation and rising current account deficits of the 1980s, exposed

serious government failures and the limits of Public Enterprises as major players in economic development. In addition to management deficits, many Public Enterprises also suffered from technological shortcomings. Imported through either foreign aid or soft loans from abroad, many of the Public Enterprises were either equipped with low or second grade machineries contributing to low capital/output ratio, or were established without due regard to their economic and financial sustainability. (Okoli, 2004)

As a result of these failures, large-scale privatization of Public Enterprises were undertaken in the 1980s and 1990s, with the vital support (if not inducement) of multilateral financial institutions as the possible way out of the shambles. The collapse of the Soviet Union also removed ideological and political barriers that hindered capitalist/market-oriented reforms, triggering a movement towards marketization and privatization. Howbeit, the main thrust of this paper is to determine how this public enterprises failures have come to be in Africa in general and Nigeria in particular.

Available evidence shows that the performance of the public service in virtually all tiers of government in Nigeria has remained very dismal, hence the present state of underdevelopment (Abubakar, 2011). The dismal performance of parastatals and agencies of government, like the former National Electric Power Authority (NEPA) and the Nigerian Telecommunication (NITEL) is very obvious in this regard (Adewale, 2011). And even the current Power Holding Company of Nigeria that were privatized recently. Nigerians are demanding more and better services and their demands are not being met, by all indications on the basis of the score cards of the civil service and other parastatals. In effect, this has slowed the process of socio-economic and political development of Nigeria as pipe borne water is no longer seen anywhere except for boreholes, usually owned by individuals. Public schools are no longer attractive to attend as their activities are considered moribund; government owned transportation lines have winded up while those of the private individuals flourish and the same goes to public health centres especially in the rural areas.

Studies on Public Enterprises performances, although deriving from political, economic, social and environmental milieu have shown that Public Enterprises are performing far below expectations and, expatiations have emerged on these phenomena. The exposition of the explanations is the main thrust in this study.

Statement of the Problem

The non performance of the Public Enterprises in Nigeria has prompted services of discussions and policy recommendations on how best to move them out of their present quagmire. Privatization and commercialization of Public Enterprises is a vital tool for the upliftment of a country’s political economy, more especially the developing countries like Nigeria. Regrettably, the problems facing this privatization and commercialization program of Public Enterprises are too numerous to mention: corruption, lack of transparency, inconsistency and incredibility to mention just a few.

However, it is based on these problems that the basis of propositions for the effective performance of Public Enterprises in Nigeria are being hindered. In trying to look towards a positive state, it becomes imperative to analyze the performance of Public Enterprises in Nigeria taking the power sector as basis for analysis.

Objectives of the Study

The specific objectives of the study are:

1.                 To take a general look at the evolution of Public Enterprises in Nigeria.

2.                 To determine the performance of Public Enterprises in Nigeria.

3.                 To identify the challenges facing of Public Enterprises in Nigeria

Significance of the Study

The subject matter of this study borders on discovering the reason for the ineffectiveness and poor performance in public enterprise in Nigeria in order to proffer solutions that will ensure steady supply of adequate quantity and quality of service delivery in Nigeria for domestic, commercial and industrial usages for substantial development of the potentials of Nigeria and for the provision of good standard of living for people in Nigeria.

Consequently, this study has both theoretical and practical significance. Practically, the result of the study will provide information that will help both policy-makers and those who implement public policies on public enterprise to have a rethink over the laws and policies under which organizations and the entire sector in Nigeria operate. Hence the result of the study could provide needed information for reforms of the legislative framework of the public sector in Nigeria.

Theoretically, this study will provide information that could help to settle the debate on whether to pursue market-based approach or centrally planned approach to public corporations in Nigeria. It will also help to provide researchers and academics with more literature on the issue of service delivery in Nigeria, and provide a fertile ground for further research on public enterprise in Nigeria.

Scope of Study

The study focuses on the challenges to effective performance of government owned business concerns in Nigeria. The study is delimited to studying the constraint to effective service delivery by the PHCN.


The paper adopted a singular source of data collection. The secondary source of data generation, which include the use of textbooks written by different authors on the subject matter, journals, magazines, information from the internet and other published and unpublished materials relevant to work. The data was analysed using the content analysis approach. This is because of its major dependence on the secondary source data

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