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Title Page – – – – – – – – i
Approval Page – – – – – – – – ii
Dedication – – – – – – – – iii
Acknowledgements – – – – – – – iv
Abstract – – – – – – – – v
1.1 Background of the Study – – – – – 1
1.2 Statement of Problem – – – – – 4
1.3 Objective of the Study – – – – – 5
1.4 Statement of Hypothesis – – – – – 5
1.5 Significance of the Study – – – – – 6
1.6 Scope and Limitations of the Study – – – 7
1.7 Definition of Terms – – – – – – 7
2.1 Theoretical Framework – – – – – 9
2.2 Background of Privatization in Nigeria – – – 9
2.3 Definition of Privatization – – – – – 20
2.4 Origin and Development of Public enterprises in Nigeria 28
2.5 Reasons of the privatization and Commercialization policy 28
2.6 The impact of Privatization on the Nigerian Economic- 32
2.7 How Counties Privatize (Methods of Selling State
Owned Assets) – – – – – – 34
2.8 Methods of Privatization – – – – – 35
2.9 Empirical Studies Comparing Pre versus Post
Privatization Performance for share issues Privatizations (SIPs) 38
3.1 Research Methodology – – – – – 47
3.2 Model Specification – – – – – 48
3.3 Method of Evaluation – – – – – 48
3.4 Justification of the Model – – – – – 49
3.5 Research Approach – – – – – 50
4.1 Presentation interpretation of Result – – – 51
4.2 Economic Apriori Criteria – – – – – 52
4.3 Statistical Criteria (First Order fest) – – – 53
4.3.1 Coefficient of Multiple Determinants (R2
) – – 53
4.3.2 The Student’s T – test – – – – – 54
4.3.3 F – Statistics – – – – – – – 55
4.4 Econometrics Criteria – – – – – – 56
4.4.1 Test for Auto Correlation – – – – – 56
4.4.2 Normality Test for Residual – – – – – 58
4.4.3 Test for Heteroscedasticity – – – – – 59
4.4.4 Test for Multicollinearity – – – – – 60
5.1 Summary of Findings – – – – – 62
5.2 Conclusion – – – – – – – 63
5.3 Recommendations – – – – – – 64
So much effort has been made towards understanding the
relationship between privatization and commercialization and the
economic growth of Nigeria. Privatization and commercialization of
pubic enterprises in every economy is introduced for the attainment of
specific objectives which includes economic growth and stability.
Data was collected and analyzed using ordinary least square method
(OLS). The result of the study shows that there is a positive but
insignificant impact of private investment on the economy, this due to
lack of investment in the private sector. On the strength of this
evidence, this work recommends that the government should allow
the private sector to establish major companies like electricity
generating companies, water supply companies etc. This study
finally concludes by saying that the impact of privatization and
commercialization of public enterprises on economic growth can only
take effective progress when the enterprises are wholly or partially in
some cases handled and controlled by the private owner whom will
not relent in the optimization of profitable enterprises.
Several experts and informed opinions have presented privatization
and commercialization as one of the bitter pills to be taken by
Nigeria’s in order to recover from economic slump, it to a great extent
helps to solve some vital problems that has led to the untimely
devastating problems is the syndromes of “not- my fathers- work”
which has greatly and negatively affected both smooth running and
performance of the these enterprises. The privatization policy was
recommended by the onside report of 1982 by the Athakem study
group of statutory corruptions and state owned corporations set up in
September 1984, the competence of chief Executives of Nigeria
public enterprises held in Jos, plateau state in May 29-30, 1985 and
by international minatory fund, as a condition for is loan to Nigeria.
Public enterprises in Nigeria has been considered as inefficient and
wasteful, this is because they have viewed it wish the profit criterion.
According to a school of thought asserting the activities for public
enterprises with the profit criterion is not always a fair judgment
economic activities, it is usually not appropriate to us the performance
standard of the private sector “they are horses of different colours”.
Unfortunately, the Nigerian public sector enterprises have failed in
this efficient and effective provision of the services for which they
were established. Infact it was this feeling of failure and
crimelessness arising from the increased difficulty in the government
that prompted the proposition of privatization policy in Nigeria.
For a large part of the frontlets century, there were countries in the
world (Eastern bloc) that promised state ownership of means of
production, whiles other (Western bloc) promised private ownership
of the means of production. A good number of countries practiced
what was termed mixed economy i.e. the combination of public and
private ownership of he means of production. However, at the end of
the twentieth century with the end of the war between the eastern and
western blocs, private ownership of means of production took
Today, the received wisdom is that the state should recede and that
private ownership of means of production is the only viable approach
to efficient production f goods and services, economies growth and
development. Nigeria has more than 1,800 public enterprises at
Federal and state level which can be categorized as follows:
i. Public utility providing infers fractural services
ii. Strategic industries such as petroleum and petrochemical,
fertilizer plans iron steel.
iii. Economic/Commercial enterprises such as manufacturing of
consumer goods insurance, banks and hotel.
iv. Departmental/stationary boards designed to serve specific
socials of development roles as university and research
institutes, Ake (1981)
It is important to note that the introduction of SAP in 1986 serves as a
bench mark 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 able to resituate the political economy of Nigerian
and in true alleviating the yearning and aspiration of the working
Privatization and Commercialization of public enterprises is a vital
tool for the upliftment of the growth and development of the economy,
more especially the developing countries like Nigeria. Regrettably,
the problems facing this Privatization and commercialization program
is numerous to include:
a. Corruption
b. Lack of Transparency
c. Lack of accountability
d. Inconsistency and,
e. Incredibility
However, it is based on these problems that the basic propositions of
this Privatization and commercialization program are being hindered.
It is important to note that he major function that informed the
establishment of these public enterprises are to control the resources
and raise funds for the provision of certain infrastructural facilities
particularly in services requiring heavy financial investment e.g.
railway, telecommunication electricity etc, also tope form the function
of generating revenues that will add to financial development program
and projects as reliable instrument for the crucifies of jobs and
ultimately facilitate economic growth and development. In trying to
look into these discrepancies and proffer a way forward toward a
state of Privatization and commercialization of public enterprise in
Nigeria that enhances economic growth and development this
research work emanated.
This study has a main objective of finding out the impact of
Privatization and commercialization of public enterprises on the
Nigerian economy.
It is against the background pf problem identified and the
objective of the study that the underlisted hypothesis was made:
Ho :βo : β1 = β2 = 0 (Null Hypothesis)
This means that the process for Privatization policy made no
significant impact on the economic growth of the Nigerian economy.
This research work will be of great importance to the researcher,
because it will enable her to know the importance of privatization in
the economy of this country (Nigeria). It would also help to develop
her personal knowledge.
The research will also help the government to understand those
benefits that privatization and commercialization program embodies
which we have neglected and politicized within the past. In
understanding this on the side of the government, it will allow them to
retain and work towards real implementation of it and thereby
creating room for the rapid growth and development of this country.
Finally, the research will be useful to the students of economics and
other field, who wish to know more about privatization and
The research work is focused on the impact of privatization and
commercialization of public enterprises on the Nigerian economy
from 1980 to 2010.
Definition of basic concepts is important so that the study will be
made meaningful, some definition of terms used in the study are as
a. Privatization
This is the process of transferring ownership interest and control from
a government owner enterprise to a private sector. It can also be said
to be the transfer of ownership and central of enterprises from state
to private sector.
Ogunna defined privatization as policy of selling off public enterprises
to individuals groups and organization so that as private organization
they should operate under the principles of profitability, effectiveness,
efficiency and viability rather than in a public interest.
Ikeme, (1997) defines privatization as any of the variety of measures
adopted by the government to expose of public enterprises
competition or to bring in private ownership management or control
into public enterprises and accordingly to reduce the weight of public
ownership or control or management.
b. Commercialization
This concerned with the reform of public enterprises to achieve high
efficiency and productivity without change of ownership.
c. Public Enterprises
These are any corporation board, company or parastatals established
by or under any enactment in which the government Federation has
ownership or equity interest. As defined by Ademolekun (1985) they
are organizations that engage as a result of garment activity in the
capacity of an entrepreneur.


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