IN recent times, the federal and state government‚Äôs decision to privatise or commercialise companies in which they have majority share holdings has been subject of debates.
The decision emanates from the policy package Structural Adjustment Programme (SAP) which is aimed at revamping the ailing economy and re- directing it on the part of revival and sustenance. The Nigerian has been a keep recession since 1982 due to worldwide economic depression, oil, the jugular vein of the Nigerian economy has witnessed a market shut. Its posted price plummeted to all time low price of7 dollars per barrel.
The federal earned revenue from oil export had thus dwindled and led to the depletion of our foreign reserves. At a current price of $18 per barrel, oil is not yielding enough foreign exchange for the country to meet its ever increasing import bills.
Government faced with the reality of the situation has decided to hands off some of its holdings for better allocation and utilisation of scare resources.
The need to privatise of commercialise public companies grew from government‚Äôs realisation that the complex system of bureaucratic control which characterises the national economy had been arbitrary and corruption laden.
The extent of government‚Äôs role in the economy however remains a debate issue. There are those who believe that government s role should be limited to providing social overhead capital such as roads, water supply, communication and the maintenance law and order. They contend that the private sector should be left to handle directly productive activities.
Other argue that government should engage in directly productive activities equitable distribution of such products and services.
Most Less Developed Countries, LDC, on attainment of independence found the latter school of thought to be politically appealing and satisfying and therefore engaged in direct productive activities. The argument then was not developed enough to engage in such ventures.
Besides, it was further argued that there were not enough indigenous businessmen (entrepreneur) to undertake the risk of investing in a highly risky and uncertain environment.
It was against the backdrop that the Nigerian governments established industries which were meant to serve focal point institutions.
In Nigeria, there is a prevalent attitude to government property. It is believed that such property are nobody‚Äôs and as such could be used as pleases the user. Government holdings therefore suffer a number of weaknesses when judged against privately owned companies.
Instead of being revenue yielding ventures public holdings become economic drain pipes. Now that our finances are lean is the time to either privatise or commercialise these government companies.
Again, government parastatals are non-competitive. They depend on government protection to create them as monopolies. These parastatals have been so protected in the past that the spirit of fair competition is killed in them. Because some of them like NEPA have no rivals, they produce substandard products or services to the public.
Consumer satisfaction has no meaning to them, they have no goodwill in public places and if consumers have choice they will gladly shift their demand to such alternative. What baffles one is that these sick babies continue to call government to protect them. The assembly plants in point are partly owned government industries than never perform.
It is also true that most government owned companies do not undertake research and development and therefore cannot be innovated.
In a period when the judicious use of our scare resource is called for, government cannot afford to prop up industries that cannot stand on their own.
One of the attendant problems that has be-deviled our national economy since independence has been management inefficiency.
Most of our corporations are managed and staffed by square pegs in round holes. Most of them ride on political patronage to high offices they are neither qualified nor competent.
The end result is wastage, mismanagement witch hunting and management laxity. In rare cases, where there are competent management, undue government interference reduces the effectiveness of such management. There have been occasions in this country where near illiterates are made board members.
Also most of the government corporations are located where they are not best suited. Political rather than commercial and economic consideration determine such location. What is more, some of these industries are sited at great economic cost provided they satisfy political expediency and the demand for even development like (Oshogbo Steel Rolling Mill, Katsina/Jos Steel Rolling Miss and the Kaduna refinery.
Government participation in industrial ventures tends to distort prices of product of such industries. The prices of such goods and services are not competitively determined and cannot be used to evaluate such industries in terms of profitability as their true market prices are not reflected.l