Privatisation of State-owned Enterprises (SOEs) in Nigeria and it’s impact on national economy. Chapter One: Introduction, Aims and Objective
Privatisation came into popularity in both developed and under developing countries following its successful results in the Federal Republic of Germany in 1957, when the Germany government sold majority of Volkswagen to private investors. Privatisation was also featured in Great Britain in the 1960s and 1970s by Mrs Margaret Thatcher (Conservative government) privatisation of Britain Telecom. Privatisation continues to spread to other continents such as Japan, Mexico privatisation of State-Owned communication companies. Hence, Privatisation has come to replace the big and rapid expansion in state ownership and public sectors. The British Telecom was the first major state flotation, paving the way for what became a torrent of mass-market sell-offs in the UK, and around the world. Privatisation comes into play dues to poor performances of the State-Owned Enterprises and as major issue for policy discussion in the second half of the 1970s due to the convergence of a number of factors (Cook and Kirkpatrick 1988). For example, in the developed countries like in the United Kingdom and United States, the elections of governments are ideologically committed to greater use of the market in securing objectives. Thus, privatisation was seen as panacea. The UK privatisation continues to serve as an inspiration and model to other countries as a path for economic growth and reducing the power of the State-Owned Enterprises trade union. Following the 1979 election (1979-Feburary and 1982) the trade union influence was not an issue, some SOEs assets was sold, most of them being small (Bishop and Kay 1989). But therefore, privatisation grew into a central component of the government political programme with the privatisation of British Telecommunications in 1984, with 51 percent of the shares sold at 3.9 billion British pound sterling. Following this significant experience in Britain spread to the rest of the world and to the developing countries. The prospects for economic development and democracy in Africa, particularly in Nigeria are greater through privatisation than through State-Owned Enterprises (SOEs). Pressure has been applied on developing countries by International Organisations such as World Bank, International Monetary Fund (IMF) and the U.S. Agency for international development to pursue the policy of privatisation as a part of a package of economic reforms.
The concept of privatisation is more complicated than widely used as the transfer of government ownership to private sector. The term privatization, Privatisation is the transfer of State-Owned organisations to private investors or private individuals. Specifically, some privatisation can partial or completely depending on the amount of equity sold to the private sector; it can selective or full depending on which parts of the state enterprise are sold. Privatisation does involve liberalisation, i.e. where a competitive climate and market forces being promoted as a result of previous monopolistic or oligopolistic. Is a lot more of than the selling of SOEs, some scholars view this in a similar vein. “a fuzzy concept that evokes sharp political reactions (Bienen and Waterbury 1989:617) “as an umbrella term covering a number of government microeconomic policies” (Bishop and Kay 1999:643) And Martins (1993) considers “privatisation in terms of change in the role, responsibilities, prioritise and authority of the state, rather than narrowly to denote change of ownership”. Privatisation in a broader perspective, Is “Liberalisation or deregulation of entry into an activity previously restricted to PEs, the removal of restrictions implied by this is to allow private operators to compete in sectors that have been the exclusive domain of PEs. To the extent that private enterprises are successful...