Why privatization is not the answer in the Nigerian’s Government
Privatization is the transfer of
ownership, property or business from the government to the private sector. It
is regarded to bring more efficiency and objectivity to the organizations that
government companies have no concern with (The Economic times , 2016) . That is to say that
it gives the private sectors an opportunity to make decisions about what, where
and how to produce goods and services (Andrew Berg; and Elliot
Berg, 1997) .
Privatization aims at:

Investment and stimulate entrepreneurship
Privatization in Nigeria:
In Nigeria, in the unitary system
of government such as indstries or assets owned by lower levels of government
example: municipalities, being transferred to the central government to be
operaed and owned at the national level (Prof. Taiwo Asaolu, 2015) . Industries that are
usually operated by nationalization include transportation, communication,
energy, bank and natural resources and they become state owned enterprises;
they aim to achieve social, political and economic objectives ( Ademola Ariyo and Afeikhena
Jerome, 2004) .
In the 1960s and 70s, many of the
nationalized corporations went through a process of denationalization in other
words privatization. The reason is because some state owned enterprises ran out
at a loss by the government. They are characterized by low productivity,
inefficiency, corruption and nepotism. Therefore, privatization is a strategy
adopted by the government to improve the delivery of services by state owned
enterprises as a means of economic re-engineering embarked upon to solve the
problems related with state owned enterprises by the government (Ladipo Adamolekun , 2005) .
1
No! National corporations should not be
privatized.
Why?
In Nigeria, privatization over some time
has not been a popular reform. It has received so much
criticism from labor,
academia and individuals. As it is seen as a means of instrument for an
efficient
resource management for rapid economic development and poverty
reduction, privatization inflicts damage on the poor through loss of employment,
reduction in income and reduced access to basic social services or leads an
increase in prices (Chudi-Oji Chukwuk, 2013) . That is to say that
it “abuses the public interest”. For
example; if the National Emergency Management Agency whose aim is to manage
natural disasters in Nigeria is being privatized, then the public will have to
pay their services (Nigerian
Association, n.d.) .
Government loses out on potential dividends: A lot of issues arise from ownership, management and control of public enterprises operated in the public interest. These includes the political interference, miss-allocation of resources, loss of revenue, corporation, lack of management autonomy; scarcity of foreign exchange leading to rampant in both private and public sectors due to economic deterioration(The impact of Privatization
in Nigeria, 2015) .
The
problem of externalities: The utilities create negative
externalities (i.e. pollution, damaging the environment). The public sector
companies, the government can regulate the output and make sure that it is at
the socially optimal level. In the private sector, the maximization of profit
is the only concern, therefore leading to the occurrence of socially damaging
externalities.Government loses out on potential dividends: A lot of issues arise from ownership, management and control of public enterprises operated in the public interest. These includes the political interference, miss-allocation of resources, loss of revenue, corporation, lack of management autonomy; scarcity of foreign exchange leading to rampant in both private and public sectors due to economic deterioration
Conclusion:
Intergovernmental
relations are to play a “bridge
building” role to establish a degree of coordination and cooperation to divided
powers (Okafor, J,C, 2007) . In developing countries, such as
Nigeria, it is necessary for the state to take active roles in matters
associating with the economic development considering the absence of strong
private sector. The available resources to the private sector are inadequate to
provide certain goods and services. For instance, the investment in
establishing a hydroelectricity-generating plan or water scheme for a large
urban center is huge for a private sector to handle. Since the development is
related to social services, post-independent African governments need to
acknowledge the need to be involved in providing certain social and economic
services (Prof. Taiwo Asaolu, 2015) .
Ngadiuba
Alina
Cluj
School of Public Health
2nd Year
student
REFERENCES:
1. Ademola
Ariyo and Afeikhena Jerome. (2004, July 04). Utility privatization and the
poor: in Nigeria. Global Issues Paper. Retrieved from
https://www.boell.de/sites/default/files/assets/boell.de/images/download_de/internationalepolitik/GIP12.pdf
2. Andrew Berg; and
Elliot Berg. (1997). Methods of privatization. Journal of International
Affair. Retrieved from
http://fspac.ubbcluj.ro/moodle/pluginfile.php/20769/mod_resource/content/0/Berg1-Methods%20of%20Privatization.pdf
3. Chudi-Oji Chukwuk.
(2013). Nigerian Economy – Effects Of Privatization And Commercialization
Policies. Nigeria. Retrieved from
http://www.doublegist.com/nigerian-economy-effects-privatization-commercialization-policies/
4. Economics on
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Privatization :
http://www.s-cool.co.uk/a-level/economics/privatisation/revise-it/the-disadvantages-of-privatisation
5. Ladipo Adamolekun .
(2005, November). Re-Orienting Public Management in Africa: Selected Issues
and Some Country Experiences. Economic Research Working Paper.
Retrieved from
http://www.afdb.org/fileadmin/uploads/afdb/Documents/Publications/00457497-FR-ERWP-81.PDF
6. Nigerian
Association. (n.d.). Dept for Nigerian Related Website . Retrieved from
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7. Okafor, J,C.
(2007). Comparative Models and Patterns of Intergovernmental Relations. In J.
a. Onuoha, Theory and Practice of Intergovernmental Relations. Enugu,
Enugu state , Nigeria : Quintagon Publishers. .
8. Prof. Taiwo Asaolu.
(2015, November 08). The Nation. Privatization in Nigeria: Regulation,
deregulation, corruption and the way forward. Retrieved from
http://thenationonlineng.net/privatization-in-nigeria-regulation-deregulation-corruption-and-the-way-forward/
9. The Economic times . (2016, November
18). Retrieved from Privatization :
http://economictimes.indiatimes.com/definition/privatization?from=mdr
10. The impact of
Privatization in Nigeria. (2015, March 23). UK essays. Retrieved from
https://www.ukessays.com/essays/economics/the-impact-of-privatization-in-nigeria-economics-essay.php