CHAPTER ONEINTRODUCTION1.1 BACKGROUND OF THE STUDYTo be able transform into an industrialize economy; an underdevelopedeconomy has to be privately and commercially developed.The importance of establishing public enterprises or corporation beganduring the 19th century with the British telecom in 1884 under thetelecommunication act and gained a worldwide support in Britain thereafter.Several nations particularly those in Africa, have come to embrace the principleas a way of eliminating low performance and inefficiency in the publicenterprise sector.Following the trend the Nigerian economy has come to embrace privatization asa cardinal principle of the state’s economic policy. Over the years, the Nigeriangovernment has encouraged the development of the public sector, sinceindependence in 1960 and particularly 1970s but has being commonly nonsuccessive because of government attitude towards public enterprises businessmanagement. In Nigeria, most government owned industries and establishmentsremain citadels of corruption, studies in inefficiently and consequently a heavydrain on the economy. As a means of combating this menace, the (IMF) and9(World Bank) have advocated the twin policies of privatization andcommercialization incidentally Nigeria has fully adopted this policy and isembarking on it with frenzy. For example, Nigerian breweries changed from themost inefficient and loss-making company before privatization to one of themost profitable business in Nigeria. Nigeria has more than 1,800 publicenterprises at federal and state levels which can be categorised as follows;-i. Public utility providing infrastructural services.ii. Strategic industries such as petroleum and petrochemical, fertilizer plants,iron steel.iii. Economic /commercial enterprises such as manufacturing of consumergoods insurance ,banks and hotel ,andiv. Departmental / stationary boards designed to serve specific socials ordevelopment roles as university and research institutes. Ake (1981).It is important to note that the introduction of SAP in 1986 serves as a benchmark in economic policy-making in Nigeria with the resultant, liberalization,deregulation, privatization and commercialization measures.The critical question here remains how many of these policies have been ableto restructure the political economy of Nigeria and in turn alleviating theyearnings and aspiration of the working class.10The world no doubt is moving towards capitalism and liberalization andany nation that is not moving towards this direction is seen as either notdeveloping or even retrogressing. A capitalist economy is a free marketeconomy which allows most economic decisions to be guided by the twinforces of demand and supply. Since capitalism discourages monopoly butencourages competitive market, it therefore enhances efficiency and highproductivity which is very vital in any developing economy.
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