CHAPTER ONE

INTRODUCTION

1.1  BACKGROUND OF THE STUDY

In most developing countries Nigeria, government’s participation in economic activity is usually significant. One of the ways through which the government has intervened in the Nigeria economy is through the establishment of public enterprises. Public enterprises are statutory bodies operating services of an economic or social character or both on behalf of the government.

Since the colonial era, especially after independence in 1960, Nigeria public enterprises have witnessed a steady growth until recently. As Olise (1988: 133) puts it, beginning as a twinkle in the period between the era of the second world war and Nigeria attainment of independence, and the creation of public co-operation has risen to flood level since independence and has maintained a steady growth.

The rationales behind the establishment of public enterprises in Nigeria are many. Some of the reasons include: generating revenue that would add to available national capital for the support of development an welfare programmes, making it impossible for important profitable enterprise to be controlled by a few individuals or group; organizing certain critical activities for national survival and economic stability and providing employment opportunities (Ademotecum 1983)2

However, after a long period of growing start, intervention in the Nigeria economy through public enterprises, the mid 1980’s.

Onward has sometimes been dramatic in public opinion and public policy. This has been brought by the persistent losses which state enterprises has been running over the years. Consequently, there has been a willingness to look at the alternative policy strategies for the achievement of economic developments. At the fore front of these strategies in the minimization of the role of state in the economy including privatization of public enterprises.