The effect of government policy on privatization and commercialization on nigeria economy (a case study of phcn, ekwulobia)

Thesis Overview

<p> </p><div><p><strong>1.1 &nbsp; &nbsp; &nbsp; BACKGROUND OF THE STUDY</strong></p><p>The import substitution policy of the post independence Nigeria led to the establishment of industries. Apart from this prime motivation for import substitution, there was the need to create jobs for the growing educated youths, the need of industrialization and the ideological argument that the government should control, regulate and supervise the commending heights of the then nascent economy.</p><p>Furthermore, there was the need to strive to catch up with the developed countries of the world and since the indigenous businessmen and managers were neither technically nor financially ready to assume the catalyst role which their counterparts in the developed countries were playing; government felt obliged to fill the investment gap. &nbsp; </p><p>&nbsp; &nbsp; &nbsp; &nbsp; The obvious imperfections in the market oriented economics in terms of resources allocation to the more profitable but less preferred sectors of the economy was yet another reason for government intervention in the economy.</p><p>&nbsp; &nbsp; &nbsp; &nbsp; The sum total of these is that between 1960 and 1980 the various governments in Nigeria both at federal and state levels established numerous industries. The core characteristics of most of these industries were inefficiency in the utilization of resources and their consequent dependence on the public treasury for subvention. Therefore, these adverse operating conditions could not make for rational economic decisions. Consequently, these enterprises and their management lost their mission and became pipes for wastages, agencies for political patronage and generally parasites on the national and state treasuries. However, by the late 80’s, the glut in the world oil market set in and it suddenly devoured on policy makers that the revenue from oil was significantly below the requirement for the sustenance of these money-guzzling ventures. There then arose the need for reprioritization of economic policies and the need to release the energy in economy suppressed by bureaucracy and undue control.</p><p></p></div><h3></h3><br> <br><p></p>