FAQ

Experience worldwide has shown that public enterprises have failed to live up to expectations. They tend to consume a large proportion of national resources without discharging the responsibilities thrust upon them. More importantly, they fail to share out these resources efficiently. One only needs to review the level of coverage of the National Electricity Power

Indeed, with new investments in the privatized enterprises, better resource allocation, operational efficiencies, and better corporate governance are likely to pave the way for expansion and job creation. These improvements in turn will bring about better working conditions, higher pay and more sustainable employment in the long run. Nonetheless, the impact of privatisation on employment

There are, of course, no guarantees but privatisation can be an important element for increasing the workforce in the long term. If private management functions on an efficient and profitable basis, it should be expected that its business would increase over time as a result of higher production and lower product cost. 

The sale of public enterprises would reduce the level of employment in the short-run, because of the elimination of excess labour. Unemployment, however, is expected to decrease in the medium- and long-run as the rate of growth of the economy increases along with the growth of the private sector.

The government must devise sectoral policies that introduce competition and promote private sector development. It must establish and maintain a strong regulatory framework for the remaining monopolies, public and private, to ensure that fair business practices are adhered to, keep prices down, and generally oversee the particular sector;

Privatisation is not an end in itself, but it is a key tool for improving the efficient allocation of resources, for mobilizing investment, and for stimulating private sector development. It is expected to bring about the following benefits: Reduce corruption and parasitic mentality; Infuse capital and modernize technology in our industries,

There is clear evidence that public enterprises have contributed to our economic stagnation and poor national image. Public enterprises have: Created economic inefficiency; Consistently incurred financial losses; Absorbed a disproportionate share of credit; Contributed to financial deficits and imbalances; Contributed to and entrenched parasitism and corruption; and Attracted rapacious military-civilian elites to politics.

The objectives, which the Federal Government of Nigeria’s privatisation programme is meant to achieve, are numerous and involve, as a basic component, the improvement of economic efficiency. Generally, the programme has four objectives: To achieve higher allocative and productive efficiency, leading to faster economic growth and development; To strengthen the role of the private sector

Yes, privatisation can and will lead to positive change in the current situation by working to reverse these certain dangerous trends.  As has been noted throughout this document, privatisation is designed to remove government from business and bring in proper business people to do so. 

There were about 590 public enterprises at the end of 2000, of which only 160 were involved in economic activities, generating goods and services. Over 5,000 board appointments are made to man these enterprises, with enormous patronage power given to high-level officials, such as the directors, managing directors, and boards. About $100 billion was spent.

The outcomes have been disappointing and include: Corruption and mismanagement leading to low productivity; Dependence on continued funding from government budgets. Instead of providing any benefits to Nigerians, Nigerians must give up many benefits themselves that can’t be provided by government since there isn’t enough money; 

Public enterprises, like in other countries, were established with good intentions for the welfare of the people. The overriding reasons for creating public enterprises in Nigeria were to: Make up for a shortage of local capital for expansion and technological improvements; Ensure government control of “commanding heights” to prevent elites from prospering at the expense

An initial public offering, or IPO, is the sale of a company’s shares on the stock market for the first time.  As part of Nigeria’s privatisation programme, the sale of shares in IPOs is reserved for Nigerian citizens only, and even then the amount that can be purchased by any one individual or institutional investor

The stock market is an institution where shares (as defined above) are bought and sold.  Shares can be sold as part of daily stock market activity, through share subscriptions and initial public offerings (IPOs).

A core investor sale is defined as the transfer of at least 51% of ownership, accompanied by management control, in a company from government to new private owners.  Core investors may be individuals or firms, Nigerian or foreign, with the money required to buy and operate the company, and the technical and managerial capacity needed.