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IMPACT OF
PRIVATIZATION ON BUSINESS DEVELOPMENT IN NIGERIA
ABSTRACT
It has been
widely accepted among developing nations that economic development can be
accelerated with active industrial sector. In the same vein it is the power and
energy sector that drives industrialization. Nigeria, as a typical developing
country that is anxious to grow has failed in the provision of domestic energy
to her citizenry and industries. In her recent efforts to fulfill this
obligation, Nigeria chose to privatize her electricity supply unit in pursuit
of greater market efficiency. Unfortunately, the effort has not yielded the
desired result. Homes, government establishments and industries have suffered a
great deal of power outage. This has questioned the economic rationale behind
the pursuit of profit at the expense of very huge loss in welfare.
In this
paper, an attempt has been made to estimate the impact of privatizations on
business development in Nigerian and to examine the effect privatization has
had on the pattern of private sectors and public sectors. Privatization
broadens and deepens the power sector resulting from increased listings
consumer size. Privatization has also provided opportunity for risk
diversification, enhanced professionalism and increased government attention.
The implementation of the first and second round privatization has resulted in
a tremendous boost to the total power supply, and consumer price index.
This paper
posits that; in a primitive undeveloped private sector, utilities such as
energy and power cannot be privatized without jeopardizing the development
motives of the nation. Standard econometric methods were used to show that the
structure of supply of electrical energy is different in the hands of
undeveloped private sector and inimical to the overall development of the
nation. In spite of the identified
shortcomings, the privatization program has enhanced the development of the
Nigerian power sector.
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