The topic of the research work is the effect of privatization on Nigeria economy. Effect of privatization on Nigeria economy, this show how Nigeria government privatize some federal government own company to private company. Chapter one of this project shows the introduction, background, statement of the study, objective of the study, significance of term, limitation, methodology of study, definitions of terms, organization of work. Chapter two show some privatization rationale and inefficiency of public enterprises and how government privatization phase I between (1988 – 1998) and some assessing possible economy effects of privatization on Nigeria economic and listed top fifteen privatization transaction in Africa in 90’s and some question and answers on privatization, some enterprises stated for privatization in phase 1 and summary of review, chapter three this show research method, research instruments, sampling procedure and some problems encountered in the conduct of research. Chapter four states the data analysis, hypothesis testing and discussion of finding while chapter five listed summary, conclusion and recommendation.
1.1 BACKGROUND OF THE STUDY
All over the world, the public services as a matter of experience, has not be know as for their capacity to create wealth consequently, public enterprises have perceived as train pipes for government budget, thus capacity budgetary strains and avoidable burden on the economy. It becomes a national policy to disengage the public sector from those areas where the private sector has the comparative advantage to perform, while lifting the state itself with the provision of infrastructure, security and enabling environment for business to thrive entranced wealth creations.
Privatization as a tool fro economic management came into the front partner when chic became the first country to turn public assets and business of private operation in early 1970, since then, over 140 country (both developed and developing) have embraced privatization as a route to economic growth and prospect.
In case of Nigeria, the issue of mismanagement resources and manpower potentials led to huge wastage of resources of resources and manpower potentials gave the government of the day no other option but to pursue quickly privatization programme.
There are about 600 public enterprises in Nigeria run by or controlled by state government. These compares take a sizeable portion of the federal budget and account for over 5000 appointments into their management and Board, a powerful source of political patronage.
Transfers to these enterprises ran into billions of Naira this transfer were in form of subsidized foreign exchange, impact duty was verse, tax exemption and or write off of areas, undeceived revenues, loans and grantees and grants or subventions. The companies were also infested with many problems which became an avoidable drag on the economy such as abuse of monopoly power detective capital structure heavy dependence on treasury funding, rigid bureaucratic structures and bottlenecks, mismanagement corruption and nepotism. With all these problems the government has no other option but to take a positive step in March 1988, the then Nigeria Head of State, Ibrahim Gbadamosi Babangida promulgated a decree establishing the technical committee was formally in inaugurated in July 1988 to undertake the task of reform of public enterprises. Since this period up to rate privatization has gone beyond debate in Nigeria and has become an economic necessity, a vital step in economic revitalization and reformation.
The net effect being to improve the quality of resource allocation and the efficiency at the price mechanism in the society.