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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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