EFFECT OF PRIVITIZATION AND COMMERCIALIZATION OF PUBLIC ENTERPRISE IN NIGERIA (A STUDY OF PHCN)

EFFECT OF PRIVITIZATION AND COMMERCIALIZATION OF PUBLIC ENTERPRISE IN NIGERIA (A STUDY OF PHCN)

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CHAPTER ONE

1.1      INTRODUCTION

In Sokoto Nigeria and Federal Government owned enterprises is the expectation action that the rate of growth and development may be satisfied through promotion of such enterprises.

The adoption of privatization as an alternative development plan must have been of pernicious one for some element of the Nigeria ruling class. This is because public enterprises have tended to become important revenue for serving ethic based distribution interest indeed the recent call for reversal of the exercise in the lending banks in the country is seen as the consequences of apparent loss of influence, which the privatization exercises has endangered within this cycle.

It is clear from the fore going development as well as socio-political imperative was moving behind every government presence industry in Nigeria economics performance of organization was of secondary importance. It would appear that so long as founds are abundant in parastatals and corporation wasted would be tolerated, as long as they seem to be meeting certain ethic-regional interest hence the poor performance of the public sector interest or government in patronage,. The reversal on government in favour of economic performance is hardly of conformation of reduction on references of the

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certain interest, rather is it the rather it is result of several liquidly problems facing government. The aim of this study is this to see if the efficiency arguments will prove a strong justification for the adaptation of privatization policy. It is therefore mainly concerned with the most broadly sustainable economics for privatization, but I also tries to understand the extent with which political, social and economic consequences of such policies are mutually supportive in terms of directions and velocity.

1.1   STATEMENT OF PROBLEM

Addressing the inaugural meeting of the presidential consultative committee on privatization the economic in Abuja the area concern, according to him includes: democratization, globalization, linearization and technological privatization and commercialization of the state owned enterprise.

Consequently, the need arose to place the average Nigeria who ultimately private the basic for corporation survival (profit) at the center of the activities, to produce goods and services in an economic sense in view of the above this research question.

A.           Why do most Nigerians Believe that private means to sell the state owned enterprises to few rich individuals?

B.           To what extent privatization will solve the problem inefficiency.

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C.           How can privatization solve the problem of poor performance in the public enterprises, which is reflected on high debt level?

D.          How can privatization increase the quality of goods and services?

E.           What happens if there is managerial in competence, inadequate and inappropriate accounting practice in public organization?

1.2   OBJECTIVE OF THE STUDY

The Research is set to see if the efficient arguments of the privatization will improve a strong enough or adoption of privatization policy.

Specifically, the study intends to achieve the following objectives.

A.          To understand the extent to which political, social and economic consequences of the policy is mutually supportive of direction and velocity.

B.          To examine the significance of ownership (private or public as the source of business efficiency and success.

C.          To correct the impression created by some Nigerians who viewed privatization as a pernicious venture.

D.          To examine the modalities adopted by the government I privatizing the banking industry.

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E.          To identify and show the pattern of ownership structures of the banking industry before and after privatization.

F.           Efficiency in production before and after privatization.

G.          To show whether there is increase in turnover of the industry as a result of privatization.

H.          To offer possible solution to problem identified

1.3      SIGNIFICANCE OF THE STUDY

Very few people will double that the nation public sector is failing or that abounds where bureaucratic huge losses and wide spread corruption is present. With this can’t mass taking either as evidence that the private, sector is therefore automatically below or more efficient or that public organization is wholly define to be in efficient.

This study is a modest attempt at establishing the significance of ownership (private or public) as the source of business efficiency and success. The choice a ` is this significance a deliberate because like the contemporaries Africa, its known to performed credibly even under public ownership using profitability as a measuring rod it that is true, then business efficiency transcends more ownership in need, many firms are known to fail all the time and for the same reason advance against poor performance in the public sector, such poor competency e.t.c, it

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would then be possible to achieve business efficiency irrespective of owner ship status attempt will be mode to establish this fact

Furthermore, privatization in less developed countries like Nigeria I bound to be significantly different in several ways. In position where the programme has been a dominant public policy for some time now, it is a reasonably coherence and integral policy. In Nigeria the policy is directly linked to acute liquidity problem and was generally imported with the particular of I.M.F/world Bank and western creditors. And with a patiently structural characteristics and capital market much narrow and under developed economy.

Besides as noted earlier, government widespread presence in industry is considered strategic for either political or economic reasons, micro economic consideration such as relationship between cost and process were therefore not of prime important. Nationalized industries include those mostly inherited from colonial powers are seen an integrated part of government development plan. Industry on particular are said to have experienced large growth in the decades up the merely dismiss the public sector as wholly UN productive and inefficient. All these study over more significant.

1.4      SCOPE AND LIMITATION

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It is hardly the case that any research makes a complete study of problems, let alone a project like this one, which is consideration limited by timed, space and resource.

Given that privatization is a relatively new phenomenon it has continue to provoke intense controversy as to acceptable application and inherent implication of such public policies. The theme of this study is to find out the impact of privatization programme on the Nigeria banking, which is restricted to empirical study or union bank in Nigeria plc Sokoto state branch.

The dissertation would have extended more than this scope but due to some limitation such as other academics endeavours, financial and time constraints. This management of union bank plc gave excuse that they don’t want their confidential documents and other necessary information to exposes to a limitation to the study.

1.5   RESEARCH HYPOTHESIS

Hypothesis refers to as meaningful proposition, which could be accepted or rejected in the light off prevailing findings. Consequently, hypothesis is at the beginning of this research to guide him in searching for relevant empirical evidences that could invalidate or confirm his assumption is made.

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Ho1. That privatization will enhance quality of goods and services. Ho2. That privatization will lead to increase in the flow of foreigninvestment

Ho1. That commercialization will enhance quality of goods and services. Ho2. That commercialization will lead to increase in the flow of foreigninvestment

Ho2. That  privatization  will  lead  to  increase  in  the  flow  of  foreign

investment

Ho1. That government ownership  will  enhance  quality  of  goods  and

services.

Ho2. That government ownership will lead to increase in the flow offoreign investment

1.6      METHODOLOGY OF THE STUDY

The primary method of collecting data used in carrying out this research study is to obtain. The primary data the researcher used questionnaire, which consists questions designed to gather information for data analysis.

Lastly the approach used in data presentation and analyses were of table and percentage.

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1.7   BRIEF HISTORY OF UNION BANK PLC

The Bank was established in Nigeria in (1917) as a branch of Barclays Bank (dominion colonial and overseas) which later becomes Barclays Bank Plc (BBP).

On 30th May 1069 the bank was incorporated in Nigeria under part X of the company Act 1986 its made have been change from Barclays Bank (ACO) Nigeria limited to Barclays Bank of Nigeria limited 7th July 1970, the bank was wholly owned subsidiary of BBP. In the same year it offered 8.33 percent of its equity to Nigerian citizens and association by way of an offer for subscription and the whole of its issued and fully paid. Share capital was administered to the official lost of the Nigeria stock exchange.

In 1979, the name of bank was changed by a special resolution from Barclays of Nigerian limited to union bank of Nigeria limited. UBA made further offer for sale of 7,757,000 ordinary shares of 25 kobo each in 1987 to the Nigerian public. The bank there by becomes wholly Nigeria Company.


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