IMPACT OF PRIVATIZATION OF PUBLIC ENTERPRISES ON NIGERIA WORKERS



        


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IMPACT OF PRIVATIZATION OF PUBLIC ENTERPRISES ON NIGERIA WORKERS


ABSTRACT
The impact of privatization of public enterprises on Nigeria workers highlighted in a concrete way, all in a bid to show case those salient issues associated with the privatization exercise. Public enterprises are those organizations owned by the federal, state or local government for the purpose of carrying out business function. The privatization of public enterprise was frustrated by the late 1980’s due to the fact that the anticipated development did not materialize. It was found that eight out of ten government owned enterprises could not generate enough money for their operation, but depended heavily on government subvention. The reasons for the failure were attributed to: Nigeria’s economic crisis, and mismanagement of public enterprises. As stated in our research findings, privatization of the public enterprises took effect from mid-1980’ as a policy measure put in place by the government to address the economic down turn. On the contrary, the privatization exercise that was carried out from 1999 to 2007 had some hidden motives owning to the fact that, some of the enterprises privatized were not supposed to be privatized, premised on strategic and variable reasons in terms of their operation. Thus, it was heralded in some quarters that the privatization exercise carried out was done in the interest of bourgeois class. The hallmark of this research work is on ‘The impact of Privatization of Public Enterprise on Nigeria workers’. The buyer of the privatization enterprises saws the reduction of work force as an important factor in cutting costs and increasing real returns on their investments. The evidence so far in the implementation of the privatization programme had been increased unemployment as a result of mass retrenchment of privatized public enterprises. Effects of the privatization programme on the workers had socio-political, economics health and psychological consequences. These undesirable consequences have had far reaching implications for the individuals’ families, communities and the society at large. The researcher made use of both quantitative and qualitative methods of research. Thus, data were collected and analyzed in statistical format. In addition, research findings were described and explained in detailed manner thus depicting the qualitative aspect of the research. In the course of the research, the researcher limited the scope of the study to five major sectors in the economy where the privatization exercise affected. Hence oil and gas, agricultural and allied, telecommunication, power and transportation sectors were the industries used. In all, privatization of public enterprises had brought untold hardship on the workers of the enterprises and members of the public in general. This was occasioned by the issue of self-interest by few members of the country who have hijacked the socio-political and economics spheres of the country. 


LIST OF TABLE
Table 1:    Data showing number of workers dropped in Eleme petrochemical plant.                                                       21
Table 2:    Data showing the number of workers dropped in Egbin power station                                                                23
Table 3:    Numbers of workers dropped in NAFCON                        24
Table 4:    Data showing the number of workers affected as a result of privatization of Nigeria shipping line                       26
Table 5:    The number of workers affected in NITEL: PH branch 27
Table 6:    Questionnaire administered on NITEL, PHCN Workers 28
Table 7:    Outcome of questionnaire administered to show case the conditinalities of IMF/World Bank                           28


TABLE OF CONTENTS
Title Page                                                                                 i
Certification                                                                             ii
Dedication                                                                               iii
Acknowledgment                                                                     iv
Abstract                                                                                   v
Table of Contents                                                                     vi
List of Tables                                                                           vii
CHAPTER ONE: INTRODUCTION
1.1   Background of the study                                                  1
1.2   Statement of the problem                                                6
1.3   Objective of the study                                                      6
1.4   research questions                                                           7
1.5   Research hypotheses                                                       8
1.6.  Significance of the study                                                  9
1.6.1 Policy significance                                                          9
1.6.2 Economic significance                                                    10
1.6.3 Social significance                                                          11
1.6.4 Academic significance                                                     11
1.7   Organization of the study                                                 12
CHAPTER TWO: LITERATURE REVIEW AND THEORETICAL FRAMEWORK
2.1   Definition of public enterprise                                         12
2.2   Definition of privatization                                                        12
2.3   The impact of privatization of public enterprises on Nigeria worker                                                                         15
2.4   Theoretical framework                                                     17
CHAPTER THREE: RESEARCH METHODOLOGY
3.1   Introduction                                                                     23
3.2   Sample design                                                                 23
3.3   Types and sources of data                                                       24
3.4   Methods of data collection                                                       25
3.4.1 Methods of data analysis                                                        25
3.4.2 Validity and reliability                                                     26
CHAPTER FOUR: DATA PRESENTATION AND INTERPRETATION ANALYSIS
4.1   Introduction                                                                     31
4.1.1 Oil and gas sector                                                           31
4.1.2 Power sector                                                                   33
4.1.3 Agriculture and allied sector                                           37
4.1.4 Transportation sector                                                     38
4.1.5 Telecommunication sector                                              41
4.3.0 Test of hypothesis 1                                                                43
4.3.1 Test hypothesis 11                                                          44
CHAPTER FIVE: SUMMARY, RECOMMENDATION AND CONCLUSION
5.1   Summary                                                                         46
5.2   Recommendations                                                           50
5.3   Conclusion                                                                      52
Appendix 1                                                                              55
Appendix 11                                                                            57
References                                                                               65


CHAPTER ONE
INTRODUCTION
1.1   BACKGROUND OF THE STUDY
Nigeria is one of the countries within the sub-Sahara region of Africa. In fact, the country is plagued with socio-economic and political owing to its underdeveloped nature. In a bid to tackled the aforementioned problems among others, and their challenges. The governments of the country just like other nations get involved in business activities in a bid to raise funds, create welfare services among other things.
The emergences of public enterprises could be viewed from two major perspectives. Government ownership of the production process is seen as a non-ideological response to failures in the working of the market mechanism (Tom-Ekine and Sylva 2008: 232). A second approach considers the public enterprise sector from a broader socio-political perspective and see its growth as being determined by the inter play of political and social forces (Tom-Ekine and Sylva 2008:232-233).
Based on the aforementioned reasons for the emergence of public enterprises, one could quickly say that, public enterprises came to being owing to the fact that government want to be part taker of the business community where money could be raised to meet the financial and other budgetary responsibilities of the government.
On the other hand, public enterprise came to being as a result of socio-political forces that erupted in the society. The late assertion has to do with government having an ideological inclination.
For the Nigeria scenario, the emergence of public enterprises cannot be divorce from the historic-economic and political factors which the nation inherited from its colonial master.
In the course of emergence and operation of these public enterprises. Workers who form the fundamental element of the enterprises were said to have passed through a lot of challenges that are inherent in the production system. Owing to the inter play of certain factors, government have been obliged to privatized these enterprises. The impact of the privatization on this research work. Let first and foremost highlight or defined what public enterprises is all about. By definition, public enterprises are those business organization owned by the federal, state and local government with the aim of creating wealth and welfare services. Nwizu (2003:5) defined public enterprises as a undertaking in which the government has a large interest of ownership and management.
It is an agency of government through which the government manages its commercial and economic activities. Having known that a public enterprise is all about. We equally have to get the understanding of the challenges faced by Nigeria workers in the public enterprises owing to the dynamism inherent in the industrial relation vis-à-vis privatization.
Certainly, government is the major player/employer of labour. Thus any attempt by government of the country to be indifferent to the plight of the Nigeria workers by initiating and implementing policies that are inimical to workers will spell doom to the workers, community and the nation at large.
As been depicted hitherto, government of Nigeria two the line of privatizing the public enterprises is based on its understanding that giving such enterprise to private individual will promote efficiency and effectiveness in the management and production process.
Another reason given by government in privatizing the enterprises is as a result of pilferage and low level of capacity utilization. Furthermore, privatization was intended to reduce government subsidies in the form of grants for workers’ salaries and re-injection of capital funds active public enterprises  (Okereke, 2003:90).
International rationale is also adduced as one of the reason for privatization. According to the late statement, government policy on privatization is anchored on Nigeria trying to meet the conditionalities of inter-government organizations. Put differently, Nigeria privatization policy is occasioned by the conditionalities given to it by IMF and World Bank. Rather than allowing the local milieu to direct the bearing of privatization and commercialization. Many third world countries are influenced more by the IMF/World Bank conditionalities and prescription for external debt negotiations and/or the medium term economic programme (MTEP) (Akpuru- Aja 1998:176).
Indeed it is the aforementioned reasons of privatization that has brought untold hardship to the Nigeria public enterprises workers and the citizens in general. Employees of the privatized enterprises are faced with lot of challenges in a bid to overcome the stormy tide of socio-economic milieu in which the public enterprise worker find himself. There are series of literature on how and when public enterprises privatization came to being.
The first attempt to move towards a competitive market system was in 1986 with the introduction of the structural adjustment programme and later with promulgation of the privatization and commercialization Decree No 25 of 1998 (Nwizu 2003:10). The 1988 phase of privatization was termed to be the second phase of privatization.
Guided privatization a modified brand of wholesale privatization approached was adopted at the second phase of the privatization programme in 1998 (Tom-Ekine and Sylva. 2008:254). In this regard, guided privatization is perceived by government in the 1998 budget as the privatization of PUS starting with one enterprises at a time so that the lesson of experience will be used to improve upon the programme (Tom-Ekine and Sylva 2008:254).
The fate of workers of privatized public enterprises generated and has continued to generate one of the nagging political and economic issues facing the federal and state government in recent years (Okekere 2003:94). Since 1989, privatization has been closely associated with unemployment resulting from retrenchment and moratorium on employment of people seeking for jobs (Okekere 2003:94).
From the foregoing, it is evident that privatization has its attendant problems. Albeit, the employees who were able to scale through the various retrenchments job out exercises, gained at the expense of their counterpart who lost their jobs.
        Really those who lost their job become a menace to the society owing to the fact that government did not have proper plan for the workers before the privatization exercise is been carried out.
Okekere (2003:95) averred that although the privatization policy has enhanced a few individuals and groups in the country, there has been, much evidence regarding the economic, political and social, health and psychological consequences of unemployment. These undesirable consequences have had implications for the individuals, families, communities and the society at large.
1.2   STATEMENT OF THE PROBLEM
Based on what has been stated hitherto, the statements of this research problem seek to ask the following.
i.      Has government and agencies concern really been faithful to the tenement of privatization?
ii.     Privatization as a policy is class bias, hence is it meant to favour haves and not for the haves-not?
iii.    The privatization of public enterprises really been occasioned by inefficiency and ineffectiveness of the public enterprises as being projected in some quarters?
iv.    Based on evidence, has the aftermath of privatization address the dwindling economy?
v.     Has the implementation of the privatization programme, resulted to increased unemployment as a result of retrenchment of privatization of public enterprises?
vi.    Does the economic consequences of privatization affects Nigeria i.e. brain drain?
1.3   OBJECTIVES OF THE STUDY
The objective of the study is to determine the followings:
1.     To discern the rationale behind government desire of privatizing the public enterprises.
2.     To find out how the employees of the public enterprises react before and after the privatization exercise.
3.     To discern benefits and cost of privatization progrmame in Nigeria.
4.     Also, to investigate compare the cost and benefit of the privatization exercise on other nations that embark on similar policy of privatization.
5.     To show case some of the salient issues internet in the impact of privatization on public enterprises on Nigeria workers.
1.4   RESEARCH QUESTIONS
That considering what was projected above, the statement of the problem seek to ask the following questions.
i.      What are the factors responsible for government desire to privatize the public enterprises.
ii.     How did the employees of the public enterprises react towards government in a bid of privatizing the public enterprises?
iii.    What are the benefits and costs of privatization exercise?
iv.    What is the nature of the economy after the privatization exercise?
v.     What are the positive and negative effects of privatization of public enterprises on the workers?
vi.    What are the outcomes of the privatization on workers of other countries using a comparative analysis?
1.5   RESEARCH HYPOTHESES
The following hypotheses have been formulated as a guide to this work.
i.      Privatization has caused more harm than good to the workers and the nation at large.
ii.     The policy of privatization in Nigeria has inter-governmental organizations-IMF/World Bank-character.
1.6.0 SIGNIFICANCE OF THE STUDY
The significance of this work is premised on policy, economic, social and academic significance.
1.6.1 POLICY SIGNIFICANCE
This research work will serve as a resourceful material to policy makers and implementers of public policies.


1.6.2 ECONOMICS SIGNIFICANCE
The economic implication of the area under discourse is discerned here. Thus, the end of this research work will serve as invaluable material to economic experts in the country.
1.6.3 SOCIAL SIGNIFICANCE
More social factors relating to the impact of privatization of PEs on Nigeria workers will be show-case in the research findings. Hence the socio-economic indicators of industrial environment will be display in this research work.
1.6.4 ACADEMICS SIGNIFICANCE
The end of this research work will serve as an invaluable material to other researchers, organizations and government agencies.
In all, the end of this research work will serve as a secondary source of data.
1.7   ORGANIZATION OF THE STUDY
This research work is been departmentalized into various sections and chapter, all highlighting the issues involved.
Chapter one, the background of the study information and brief account of the research work is been depicted. Other scholarly presentations done in respect of the area in discourse is project in chapter two. In addition to the aforementioned, the theoretical framework guiding the research work is also shown in chapter two. On the other hand, research methodology of the research is discerned in chapter three.
The main working depicting the researcher’s findings on the area is further highlighted in chapter four. Thus, five industries used in analyzing our area of discourse are demonstrated in chapter four.
Finally, the major findings, summary and recommendations were demonstrated further in chapter five. It is the last chapter that brief accounts of all the works done in the project are highlighted.


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