University of Nigeria Research Publications

UDEH, Anastasia Ifeoma

Aut

hor

PG/MBA/02/32729

Title

An Evaluation of the Impact of Privatization on Public Enterprises in

Nigeria (A Case Study of Nitel and FAAN) Enugu

Facu

lty

Business Administration

Dep

artm

ent

Management

Dat

e July, 2004

Sign

atur

e

. .

AN EVALUATION OF THE IMPACT OF PRIVATIZATION ON I

PUBLIC ENTERPRISES IN NIGERIA (A CASE STUDY OF . - - . I , a

NITEL AND FAAN) ENUGU

UDEH, ANASTASIA IFEOMA

PG/MBA/02/32 729

IN THE

DEPARTMENT OF MANAGEMENT

FACULTY OF BUSINESS ADMINISTRATION OF

lif4iVERSITY OF NIGERIA, ENUGU CAMPUS.

BEING

A PROJECT REPORT SUBMITTED IN PARTIAL

FULFILMENT OF THE REQUIREMENT FOR THE AWARD OF

THE DEGREE OF MASTER OF BUSINESS

ADMINISTRATION (MBA)

JULY, 2004

AN EVALUATION OF THE IMPACT OF

PRIVATIZATION ON PUBLIC ENTERPRISES

IN NIGERIA

(A CASE STUDY OF NlTEL AND FAAN) ENUGU

. - To my little baby Chidubem Giovanni Udeh. He has been

a wonderful baby.

.I

Almighty God to you first and foremost all praiw and glory

be,

I wish to use this medium to express my gratNude to all

those who directly or indirectly contributed to the xccessful

completion of th is thesis.

However, I must reserve my greatest apprecia ion to my

supervisor, The Dean of the Faculty of Business Adri inistration;

Prof. E.U.L. Imaga, for his untiring efforts and fatherl) guidance

that saw me through this project.

My sincere and heart felt gratitude goes to m! husband

Engr. Innocent 0. Udeh, and children - Dike Jayvenic k, Okezie

Rex, and Chidubem Giovanni Udeh for all their su )port and

encouragement.

I am highly indebted to my parents Mr. & Ms . M. N.

Anigboke (Ozor) for their love and understanding. b ly thanks

also goes to my relatives and other members of my fanlily, Kate,

Mr. & Mrs. Emma Nnabue, Mr. & Mrs. P.I. Nwachuk! lru, Mr. &

Mrs. Tony Onyeabo, Victor, Chimezie, Onyinye, Rev. Sister

Maureen. . Mr. & Mrs. Clem Eze, Adaeze, Obiora, Ebele, Arinze

and my grand mother Madam Adaeze Onyeabo. - -

I am also grateful to my uncle and his wife Chief a id Chief

Mrs. R. C. Onyeabo for their advice and encouragement

I will not conclude without saying thanks to my hoss Mr.

Franklin Akhabue for his encouragement and support

throughout this exercise.

Finally, my appreciation goes to my friends, C hristiana

Okolo, Helen, lfeoma Oragwuncha, Edith Nwaro, Gideon, Ola,

Ikechukwu, Kayode Sodipo, John Anyanwu, Nicholas. Zlement,

Umoru, Christians. ljeoma and my class representative Joe Mba

and so many others.

Title Page ... ... ... ... .. . ... ... i

. .

Certification ... ... . . . ... ... ... ... ii

Dedication ... ... ... ... ... ... ... ... iii

Acknowledgement ... ... ... ... ... ... iv

Table of contents.. . ... ... ... ... ... ... vi

List of tables ... ... ... ... ... ... ... IX

... .... ... Abstract ... . . . ... , I , . . , xi

CHAPTER ONE : INTRODUCTION

Background of the Study ... ... ... ... 1

. . . . . . Statement of Problem ... ... ... 4

... ... Objectives of the Study.. . ... ... 5

... ... ... Research Question ... ... 6

... ... ... ... Hypotheses ... ... 6

... ... Significance of the Study ... ... 7

... Scope and Limitation of the Study . . . . . . 8

vii

'0

CHAPTER TWO : LITERATURE REVIEW

An'overview of ~eiformance of Public Enterprises

Prior to privatization . .. . . . ... ... ... 10

Meaning and Types of Privatization ... ... 13

Objectives and Rationale for the privatization

Programme ' . . . ... . . . ... . . . ... 16

Techniques of the privatization programme . . . 19

Assessing the Effects of privatization . . . ... 23

Benefits of Privatization programme . . , ... 25

CHAPTER THREE : RESEARCH METHODOLOGY

Research Design.. . . . . . . . . . . ... ... 29

' ~ r e a - o f study . . . . . . . . . ... ... ... 29

sources of Data .. . . . . . . . . .. ... ... 30

Population . . . ... . . . ... ... . , . . . . 30

Sample Size Determination and Sampling

i cchnique . . . . . ., . . . . . . . . . . . . . . . 31

Instrument . . . ... ... ... ... ... ... 32

Data Collection Procedure . . . . . . . . . ... 32

p i i . j G d Gf '-J-. i dta Analysis . . . . . . ... ... 33

T

CHAPTER FOUR : DATA PRESENTATION A N N .YSlS

... ... ... 4.1 Presentation . . and Analysis of Data . % . I . .

? "

4.2 Test of Hypotheses ... ... ... . . . ...

RECOMMENTIONS

Summary of findings

... Conclusion ...

Rccnrnm~~dat ions

BiBLlOGRAPHY ...

... APPENDIX , . .

. . . . _ I . .

Sex distribution of Resporidents .... ... ... ... 35

Age distribution of Respondents ... .,. , . . ... 35

. Marital distribution of Respondents.. . . . ... ... 36

Educational distribution of Respondents ... ... ... 36

Organizational distribution of Respondents.. . . . . ... 37

Type of privatization in the Organbation' ... ... ... 37

Reasons for privatization of the Organizations.. . ... 38

Responses to improved management by

privatization ... ... ... ... ... ... .. .40

Impact of privatization on management

... . . . . . . . . . of the Organizgtions ... . . . 41

4.1 0 R~sponses to extent of improvemet11 in the

... ... ... ... Management ... ... ... 42

4.1 1 Responses to privatization improving

... ... ... Organizational performance ... . .. 43

4.12 Indications of improved performance ... ... ... 44

4.1 3 Responses to increase in Organizational efficilmcy ... 45

4.14 Indications of Organizational efficiency ... ... ... 46

+,'

4.15 Responses to increase in investment ... ... 48

4.16 Responses to privatization increasing

retr.rrri5 nn inws:rnent . .... ... .., ... ... 48

4.17 Eespor~ses to which privatization purposes ha re

... ... ... been achieved ... . . . ... 49

4.18 Factors militating against the effectiveness of

privatization programme. . . . ... ... ... 50

r - The 'aim of this study is to determine the impact of

privatization in the performance of public euterprises with

particular emphasis on management, funding performance

efficiency and productivity.

Data were therefore collected from primary a7d secondary

sources. The main data collection instrunent is the

questionnaire.

Data are presented in tables as frequency c'iatributian, In

t he andysis the techniques of percentage and 1-equency are

used. In testing the hypotheses, the sample pro1 lortion test is

applied. ,?.'''*:'. , .

The :011vt;i;ii] zre the major research findings.

1. Public enterprises are being privatized to reduce

government's burder, In financing them, e'lhance their

performance and profitability.

2. Privatization ' has improved their n anagement,

performance, profitability and efficiency consid xably.

C

xii

7 3. Privatization has atso increased investmc nts in these

enterprises as well as returns on the investm mt, and

4. The 'problems of privatization include apathy, ignorance

and phobia among Nigerians, inadeql ate political

commitment and unsophis!icated capital market.

1.1 BACKGROUND OF THE STUDY.

By the mid 1980s, Nigeria's economic pr ~blerns which

began in the late 1970s had reached a crisis proportion. The

problems included growing unsustainable fiscal deficits,

declining agricultural production, low and fa ling capacity

utilization in the industrial sector and rapidly r sing inflation

rate. These problems in concert resulted in fz l ing national

GI uLput, I+" high unemployment level and a depressed standard

of living for the citizenry (Anyanwu, 2001 : 35).

Stringent demand manayemerit measures adopted in

1"52 and 1985 to stabilize the economy and put it on the

path of recovery were unsuccesslul. A ccmprehensive

review of the economic structure and the prev: iling policies

recommended a fundamental restructuring of t 1e economic

system. A comprehensive Structural Adjustment

Programme (SAP) was, therefore adopted in . uly, 1986 to

last for a period of two years. Under the SAP, a lackage of

reform measures wqs put in place to stabilize tht? economy . - . . .a

through demand management and restructure tt e patterns

of production and consumption in the system (Ugt aja, 2000 :

42). The reform programme was intended t c l eliminate

distortions which characterized the system over t i e years in

order to pave the way for growth.

The specific objectives of the SAP were to restructure

and diversify the productive base of the economy in order to

I&SS&R ik dependence on the oil sector and on imports, C

achieve fiscal and balance of payments viability over time, . .

lay the basis for sustainable non or minimum inflationary

growth, and lessen the dominance of uiproductive

investments in the public sector, improve the sector's

efficiency and promote the growth potentials of the private

sector (Nwatu, 2000: 19).

One thing which, virtually, all well-meanin 1 Nigerians

agree about public enterprises today is that they have ,

performed poorly over the years inspite of huqe sums of

money allocated to them through the governmc nt's annual

budget (Nwatu, 2001 :42). - The corporations have virtuaBy all t

failed the 'nations. These include National Electric Power - .

, , q . s

Authority (NEPA), Nigeria Postal Services (NIPOST),

Nigerian Telecommunications (NITEL), Nig ?ria National

* Petroleum Corporation (NNPC) Nigeri. ln Railway

Corporation (NRC); Nigerian National Shipping Line (NNSL),

Nigerian Coal Corporation (NRC), among others (Ola,

l998:46). Thus, the government became con ;erned about

the dismal performance of the public enterpri: es generally

and their inability to achieve the purposes fo- which they

were set up.

One of the major elements of SAD was the

rationalization of public enterprises through priv 3tization and . commercialization which were aimed a t reducing

subventions and loans to them (Okafor, 200Z63). The

Public enterprises have been consuming E significant

proportion of government revenue and cor tributing to

growing fiscal deficits. The twin policies ar2 aimed at

making public enterprises more efficient, autor omous and

self-supporting with less government involvemmt in their

manaqement. It is against this background that this study is I

set to zss~r-.: the impact of privatization in the management

and perfn:wnce .of NITEL, Plc and Federal Airways

Many years after the privatization of NITEL and FAAN, - the anticipated improved performance is yet to be achieved.

I

1 This situation has led to investigation into the f ~ l l ~ ~ w i n g :

I. Apparent persistence of managerial incor ipetence in

the enterprises.

2. Persistent inefficiency in the perfarrna!~ce of the

enterprises.

3. Increasing operational costs of the two e n t ~ rprises

4. Insufficient returns to the government.

5. Nigerians' apathy to or low level of awarc ness to the

privatization programme.

6. Investors' phobia in the Nigerian Stock Exchange

Market where the shares are sold.

7. Insufficient awareness of Nigerians about the

privatization programme. . -

. I ..

The existence of the problems prompts tbe researcher

to assess the impact of the privatization p'ogramme in

NITEL and FAAN's performances.

1.3 OBJECTIVES OF THE STUDY

The objectives of the study are:

I. To determine the Purposes of privatizatm of NEPA

. and FAAN. r

2. To assess the impact of privatizaton in the

management of NlTEL and FAAN?

3. To evaluate the performance of NITEL and FAAN

since the privatization of the enterprises.

A Tn ~ ~ 3 ~ 7 i n ~ the impact nT prlv;l!intinn ir the returns

(revenues) to NITEL and FAAN.

5. To determine the extent to which the Jurposes of

privatization have been achieved in NlTEL and FAAN. . 6. To identify the factors hindering the ~ffe:tiveness of

the privatization programme in NlTEL and ITAAN.

q.4 RESEARCH QUESTIONS b ..

The following questions will guide this study

1. Wl id nrlrposes are the priwtization of IJITEL and - FAA?l to serve?

2. To what extent has the privatization programme

affected the management of the enterprises''

3. What is the effect of privatization on the pet-formance

of NlTEL and FAAN?

4. What is the impact of privatization on return; to NlTEL

and FAAN?

5. To what extent have-the purposes of privatizgtion been

achieved in NITEL and FAAN?

6. What factors hinder the effectivenes: of the

privatization programme on NlTEL and FAAFI?

1.5 HYPOTHESES

The following hypotheses are formulated for his study;

1. H,: Privatization is not aimed at enha x ing the

performance of public enterprises.

P

HI: Privatization is aimed at erhancing the I

performance of p u b k enterprises. - - . ,

I .I

2. Ho: Privatization has not increased the efficiency of

public enterprises.

HI: Privatization has increased the efficic ncy of public

enterprises. '

3. Ho: Nigerians ignorance and apathy do not limit the '

effectiveness of the Privatization program1 cle.

HI: Nigerians' ignorance and apathf limit the

effectiveness of the Privatization program ie.

I .6 SIGNIFICANCE OF THE STUDY

The significance of this study derive; from the

following;

1. The research findings will enable the government

determine the impact of the policy so far in the

management and performance of the enter xises. This

will enable the government to take the newssary steps

in improving their operations. The recorr mendations

of the study will be useful in this regard.

2. The rwnagemer~t of the enterprises will Fee in this

studjt :I;-:! need to ensure efficient operations of the

enterprises. This is the only way to give jus ification to

the policy of privatization in Nigeria.

3. The study will serve as a reference material o all those

who will carry out related study in h e future. C

Furthermore, the research findings can F rovide the

basis for further studies.

1.7 SCOPE AND LIMITATIONS OF THE STUDY

This study focuses mainly on the effe:ts of the

privatization on the two enterprises in lespect of

management, performance, returns, operational costs and

profitability.

In carrying out the study, the major limitaticrls relate to '

data and time. Some of the officials refused to provide

answers to the questions especially those boardering on

finances and performance. This made adequatc sourcing of I

primary ' information, difficult. Secondly, timf! constraint . - - . , * J

made it difficult for the researcher to conclude .he study in

record time. *

'In .this. chapter, the researcher reviews sow e relevant

literature on the subject matter.

2.1 AN OVERVIEW OF THE PERFORM/iNCE OF

PUBLIC ENTERPRISES PRIOR TO PRIVA TlZATlON

Public enterprises are classified into two c ~tegories -

statutory corporations and public companie: . Ejiofor

(1 998:25) statutory corporations are established by Acts of

the parliament and provide utilities and services that can be

priced and cost recovered. However, they are rot meant to

make huge profits but to provide adequate sen ices for the ,

people. On the other hand, public corrpanies are . .

established under Companies' Act and are memt to make

profits through commercial and industrial activiti 2s. They all

vary in size, objectives, set-up, functions, levrel of Civil

Service Control.

Apart from providing the basic infrastructt ral facilities, '

these enterprises are in position to contribute su Istantially to

the gross national product and, undoubtedly constitute the

major strategic sectors of the national econo ny (Akpala,

1990:20). In the last three decades, public sector . .

investments" have grown substantially and the public

sector's'share averaged 76.6 per cent of the t >tail planned

investment expenditure between 1981 - 1985. However ,

returns on investments have been extremely p lor. Fubara ,

(1 999:42) found that federal government investr nents in 150

companies and corporations as at December, 1985, yielded

less than one percent by way of dividends bonus issues,

loan repayment and interest payments.

Babangida (1 986:2) observed thus;

"Government Parastatals any

Government owned cornparties ar?

faced with marlagemer t inefficiency, high overhead cost P

and . in most cases, negative

refurns on investmwW'.

Following this observation, Adesar ya (I 995:15) -

expresses dismay over the dismal performance of these .. -

. . $ , a

public enterprises and their inability to achieve the objectives ,

for which they were established. Abubakar (1 9985) remarks

th2t public enterprises which are profit-orienkl have been a

collective failure. ' While some accumulate huge losses,

others have long folded up. Most of them lave failed to

ineiiiciently. They depended heavily on goverrrnent funding.

According to Adewnya 1998%) they ha\-e contributed

immensely to the wasting of the nation's resources. A major ,

economic reform was therefore needed to curb these wastes

and make these enterprises operate efficienqiy. Short of

alternative options as remedies, the governmeut resolved to

private andlor commercialize these enterprises.

In 1988, therefore, -the Federal Govcrnmc nt began the

privatization programme with the promulgation cf Decree No.

25 of October, 1988 and the setting up of the Technical

Corrlmittee on Privatization and commercial zation (now

called the Bureau of Public Enterprises). Under the Decree, -

the Government made clear distinction between enterprises I

to be privatized and those to be commercia'ized, thus . - -

. . * . a

becoming one of the few countries that have cr hybrid of

privatization programme (Anyamou, 2001 :37).

2.2 MEANING AND TYPES OF PRIVATIZATION

Privatization is a tool for economic man~gement of

modern industrial economies. To privatize means 'to make

private' meaning the transferring of ownership, m magement

and/or control of business enterprises from the pr rblic sector

to the ,private sector (Odife, 2000:51).

According to Ida (2001:18) privatization can mean one

of several things. First, a change of ownership lorn public

to private hands, private here covering small st areholders

whether as individuals or in groups, firms operating as single

proprietors or joint stock companies, a:.sociations,

partnerships, etc. Secondly, it can mean the transfer of

management from public to private hands while ownership

remains public. Thirdly, it can mean the breakir g of public

monopoly by allowing competition by private producers or

operators. And, fourthly, it can mean not pri~ratizing at the

enterprise . . level, - but privatizing the economy i.c. creating the . . , . I

environment for the private sector to serve 3s the prime

engine of growth and development.

Conceptually, privatization is a set c f articulated

programmes implemented to divest governme it's interests

in public enterprises to private individuals. In oilher words, it

means the yovrirnrnent selling its s h m s in pubii : companies .

to members of the society. Decree No. 25 of 1988 of the

Federal Republic of Nigeria defines privatization 3s;

"the relinquishments of all or part of the equitr and other

interests held by the Federal Government or its agency in

enterprises whether wholly or partly owned by the

Government". .

Privatization can be full or partial. Accordi i g to Obaji

(2001:41) full privatizatibn means divestment of all its

financial exposures in the designated enterprises. Partial

privatization means divestment by the Federal Gwernment

of part of its financial exposures in the designated

enterprises. The Decree lists 67 enterprise; for full

pr'ivatization while 47 were to be partially privatized. By the

Decree, government equity interest in comriercial and . - . . * .s

merchant banks would remain at 5% and 50% levels

respectively but government's full ownership of C evelopment

Banks would be redu~ed to 70°/c,.- meanir~g a . 30%

privatization.

Besides, government's equity interest i l r three oil

-- marketing companies would be reduced to 40%. The same

would hold for Inland Steel Rolling Mills, Sugar Companies,

Paper Mills, the National Shipping Line, and :he Nigeria

Airways. All these would be 60% privatized. ,

Government holdings in Vehicle Assen bly Plants

(PAN, VOLKS-WAGON, STEYR, LEYU,ND and

ANAMMCO) would be reduced to 35%. T-re cement

companies in which government has holdings w o ~ l d be 70%

privatized. The Decree also provides that not less than 10%

and not more than 20% of the total shares on of'er shall be

allotled to association and interest groups such 3s (but not

limited to) State Investment Agencies, Worksrs' Trade

Unions, Market Women Organizations and Universities (Ida,

After ten years characterized by preparatior , Abubakar

(1998 : 2) announced in his national broadcast on July 20

that government was set to privatize it's incstment in

Telecommunications, Electricity, Petroleum refine les, Petro-

chemicals, Coal and Bitumen production and Twrism. In

stated that under the programme Government v~ould retain

40% of the equities of !he af fx ted enterprises while 40%

would be alienated to strategic investors witt- the right

technical, financial and management capabilif es. The

remaining 20% would be sold to the Nigerian put lic through

the stock Exchange. *

2.3 OBJECTIVES AND RATIONALE Ff)R .THE

PRIVATIZATION PROGRAMME.

Obaji (2001 : 41) enumerates the objectibes of the

privatization programme. These are;

i.

.. I I.

iii.

iv.

v.

sector of such public enterprises which by thl?ir nature

to restructure and rationalize the public sectcr in order t

to lessen the dominance of unproductive invrstment in . - -

1 .,

that sector.

to re-orientate the enterprises for privatizatio 1 towards

a new horizon of performance improvemen:, viability

and overall efficiency.

To ensure positive returns on public sector

investments in the affected enterprises. C

To check absolute dependence on the tregsury for

funding by othetwise commercially oriented p irastatals

and so encourage their approach to the Nigerian

capital market.

To initiate the process of gradual cession to the private

and type of operation are best performed by the private

sector.

In a paper titled "Rationale For Economic Res:ructuring

Through Privatization" Adebusuyi (2002 : 1) state: that the

rationale for privatization programme include;

i ' promotion economic efficiency by fos :ering well-

structured markets and competition. This is b: ~sed on the .I .

paradigm that private sector enterprise ow iership will

enhance economic,efficiency by allowing resource allocation

decisions to be determined by relative price signals.

ii redefining the role of the Government, in o Tler to allow

it to concentrate on the essential task of govming which

iiame work, among others,

iii reduction of the fiscal burden of loss-incr wing public I

enterprise which undermine fiscal control and macro- '

economic stability.

iv mobilizing financial resources through shc re sales, to

reduce public debt.

v, releasing limited state funds for the financing of other

activities.

vi, attracting new investment, particula 'ly foreign

investment including new technology and rianagement

skills, as well as new partners for enterprise growth.

vii. mobilizing domestic resources for d2veloping and

deepening domestic knancia~ development, ar d - - ( .I

.viii. Spreading and democratizing share own xship with the

benefits of positive change in labour attitudes and enhanced

productivity. . . ..

2:4 TECHNIQUES OF THE PR VATlZATlON

PROGRAMME

In implementing the privatization proyamme, the

Bureau of Public Enterprises (BPE) uses five sz les methods.

According to Ayodele (2002:37) these methods nclude:

2.4.1 PUBLIC OFFER FOR SALES OF SHARES I

This is done through the Nigerian capital narket if the

enterprise is qualified for listing on the Nigerian Stock

EI,.-~ A, ange. A total of 5 public enterprises w e ~ e privatized

through this method, and over 1.5 billion shares vere sold to

Nigerian citizens and associations in all the local government

areas across the country.

2.4.2 PRIVATE PLACEMENT I

Private placement of shares of enterprises occurs in - . I ..

cases where government holding is su small tha, the BPE

cannot persuade the majority shareholders to make a public

offer of shares even where the enterprises fulfil the listing

requirements of the 'stock Exchange. This meth ~d is also

used in cases where the potentials of the enterprises are yet

r . - .. . . - . to be exploit~d and there is nzcd to n~rrt~rre them for a few '

ti> or= years. In all, seven enterprises were privatized

through this method (Obaji. 2001 :I 6).

2.4.3 SALE OF ASSETS

According to Ayodele (200237) this method is used in

cases where the affected enterprises cannot be :;old either

by public offer of shares because such enterpr ses have

poor track records and their future outlook is considered ,

bleak. Such enterprises are liquidated and their assets sold

piece-meal to the public through public tender. A total of

twenty-six enterprises were privatizaed this w: y, out of

which eighteen were done by the Federal Mi iistries of

Agriculture and Transport before the establishr~ent of TCPC

in 1988. . - . .. ..

2.4.4 MANAGEMENT BUY-OUT

Under this method, the entire substantial part of the

assets of the enterprise is sold-to the workers. 'it is then left

to them to organizae and manage the enterprise. Only one

enterprise was privatized in this manner.

. ,

2.4.5 DEFERRED PUBLIC OFFER ,

This is the fifth method of privatization uzed in Nigeria

for enterprises which although considered viat re, if sold by

shares, would realize revenues which would be less than

real values of the underlying assets of the er terprises. A

willing buyerlwilling seller price is negotiated based on a

revaluation of the underlying assets of :he affected

enterprises.

Four hotels were privatized this way on the condition C

that the new would sell not less than 40 percenf equity to the

L!igerian public within five years of the take-over .

The procedures of privatization involves the following:

1. Preparation for Sale - - . I .I

According to Ugbaja (2000:45) small an j medium-

sized competitive - public enterprises can be sold rapidly e

through competitive bidding. Large enterprise:, however,

require preparations like legal transformation of public

entities into corporate forms that permit priv; te shares,

breaking up large firms/monopolies into viable and non-

viable units, seperating competitive from non- zompetitive

and identifying peripheral assets that can b ? sold as

separate concerns.

According to Ugbaja (2000:45) large scale labour

shedding is best done by government prior to sale and . liquidation. Shares can be sold or allocated to staff at

reduced prices with easy credits.

Pricinq and Valuation

Selling prices for itnall and medhm ente~~r ises are

better determined through competitive bidding. Even for

large enterprises, market-based pricing is pwferable to

technical methods such as net assets value, r~et present

value of discounted cash flow earnings, dividend yields, etc

(Obaji, 2001:18). . - - . t ..

3. Financinq

For political and social reasons, goverr:ments are

usually reluctant to cede control over strategic ~ssets. By

restricting external ' participation, the range oc financing

options is reduced. According to Sung (1 999:Zl) debt-equity C

swaps can ease financing constraints and he'p improve

countries investment climate. Swaps have bee11 a way to

bring in foreign investors, including commercial banks into

transactions.

2.5 ASSESSING THE EFFECTS OF PRIVATLIATION

The widespread adoption of privatization rogramme

necessitates a system of impact evaluation ~ h i c h will ,

provide a systematic and practical analytical framework to

assess the results of privatization. Performanc e can be

defined in terms of success in achieving stated ~bjectives.

The basic question is whether the economy is better or

worse off as a result of privatization.

Fubara (1 999:52) states that the impact 3f privatization

on the whole economy can be assessed by; C

i)

i i)

iii)

iv)

. .\ V j

- - 8 .a

an increased share of the private ;ector in the

economy

a reduction in fiscal imbalance through increased

revenue and the reduction of the government's budget

deficits.

The development of the domestic capital market

The improvement in the externd trade hahnce, and

Changes in the level of employment .

According to Ugbaia (200056) at the enterprise level,

the impact of privatization can be assessed using;

i)

i i)

iii)

Technical efficiency which is concerned with how

efficiently inputs are used by firms botll before and

after privatization.

Cost efficiency which is concerned with whether or not

there is difference -in cost efficiency per unit of output

before and after privatization. ,

Profitability which does not necessarily imply

efficiency, as an efficient firm may be profiiable due to

market power or preferential arrangeme ~ t s , price

control on output of an efficient firm a:! well as . - -

. .,..

differences in accounting conventions, and

iv) Change in the real price charged for the ou'put of the c

privatized enterprise.

The World sank (199529) has also meawred the

impact of privatization by;

i) Financial performance, defined as ratio of operating

surplus to sales in current prices which me: sures the

returns to all investors, owners and creditors.

ii) Productivity, defined in terms of total producti Aty, and

iii) Savings - Investment deficit defined as the extent to r

which PEs rely on outside sources to finance their

operations, expansion and debt service.

2.6 BENEFITS OF THE PRIVATIZATION PROGRAMME

Alttrough adequate and up to date data haw not been

collected on the Nigerian Privatization programme, the

benefits appear obvious. In terms of the overall benefits of

the programme to the national economy, accordin j to Ekaite

(2003:23), . the A following are obvious; . ( .I

I. It has relieved the Federal Government of what was

the huge and growing burden of fina~cing the

investment needs and operating deficits of the

privatized public enterprises.

. . ii. The performance of privatized enterprises so far has -

- shown considerable improvement in the ,rolume of

corporate taws accruing to the national trea: ury.

iii. Government has realized over N50.3 billim ((including

interests earned) as privatization proceeds from the

privatization of 52 enterprises.

iv. The programme has greatly minimized the scope of

political patronage in the form of Board app ~intments.

Under the first phase of the programme, the Federal

Government relinquished about 280 d rectorship

positions in the privatized enterprises.

v. It has. massively expanded personal share ~wnership

in Nigeria. It has offered some 1,486,772,033 shares

to Nigerians from all walks of life (NSE, 2002: 18).

vi. Floatation of shares of privatized enter prises have 1

greatly . - stimulated the rapid growth of 'he Nigerian . ( ..

capital market. Such floatation have grea:ly helped in

deepening and broadening the capital marl .et.

vii. By reducing the reliance of public enterpsises on the

government for finance, the programme of xivatization

has encouraged new investment in the enterprises

viii

concerned..

The .new operational autonomy of public enterprises

and freedom from interference in dzy to day

management has somewhat improved t ~ e internal

efficiency of these enterprises.

ix. A number of public utilities have already re~lained their

solvency and begun to record substantia operating

surphises e.g. NITEL which has been finandng capital

projects. The quality and reliability of thr ir services

have also improved significantly as a result of

commercialization.

x. At the enterprise level, privatization has also improved

rnanag~iial efficiency which, according 1 , ) Ayodele

(2002:41) led to improved financing, bettzr financial

and human resources management and utilization, - . . * .I

reduction in operational costs, increasl ?d internal

investment, improved productivity a rd overall'

performance.

xi. Furthermore, privatization has incre 3sed the

managerial and operational efficiency of s 3me public

In this chapter, the researcher explains the various

methods and techniques she adopted in this stuc y. . .

3.1 RESEARCH DESIGN

This study employs descriptive survey resc arch design

because it enables the research to conduct a survey on a

sample randomly selected from the study popu ation. The

techniques of questionnaire and interview are ~ s e d in t he

data collection. Analysis of data adopts a descriptive

approach.

3.2 AREA OF STUDY

The study is carried out in NlTEL headqr~arters and

Federal Ahvays Authority of Nigeria, Enugu.

- . ' _I

3.3 SOURCES OF DATA

These include primary and secondary sources:

3.3.1 PRIMARY SOURCES

These include all the respondents to the

questionnaires and those who are orally interviewe J.

r

3.2.2 f,FCnfi.rn.Alp*f . - SOURCES

' I hese include textbooks, journals, magazinc s, dailies,

periodicals, seminar and wnrkshop papers.

3.4 POPULATION

The population of the study consists c f all the

management and senior staff of NITEL, PIC a t~d FAAN,

Enugu. They are altogether 1,021 in number. *

3.5 SAMPLE SIZE DETE??JllNATION AND SAMPLING

TECHNIQUE

Given the population the sample size is determined

using Yaro Yamani (1 964:NO) technique, viz;

n , . = Sample Size

N = Population

e = level of significance (0.08)

A constant

The random sampling technique is applied in selecting I

this sample (size from the population). . . - -

I . I

3.6 INSTRUMENT

The main instrument used in the data coll~ction is the

questionnaire. This instrument contains both strrctured and

unstructured questions. The structured questior s offer the

respondents a range of optional answers f -om which

answers are to be chosen. The unstructured questions allow

the respondenis to give their own answers.

3.7 DATA COLLECTION PROCEDURE

The researcher visited the two organizations and

personally distributed the questionnaires to th? selected c

respondents. They were left with the questionnaires for

three days after which the researcher went back and

retrieved the available ones. There is a return r j te of 93.3

per cent.

3.8 METHOD OF DATA ANALYSIS I

The data . are prcscnted in tables as frequency . - . I .I

distribution. . In the analysis, the techniques of 'requencies - and percentages are used. In testing the hypctheses, the

sample proportion (Z) test will be applied. This involves

using appropriate data to compute the value of ;I as shown

below;

Where P = Proportion of Sample responding c

affirmatively.

Po = Probability of accep:ing null

hypothesis (0.5)

I = A constant

N = Total Respondents.

The computed value of Z is then comparsd with its

critical value at 95% confidence internal or 5% r ignificance

level which is I .96. e

DECISION RULE . ..

If computed value of Z is less than its critic 4 value we ,

shall accept the null hypothesis and reject the alternative

hypothesis, and vice versa.

In this chapter, the researcher presents and analyses

the data collected from the respondents.

Table 4.1 Sex Distribution of respondents

--

a) Males 57.6

I b) Females I 53 1 4 2 4 I

This shows that 57.6 per cent of the respondents are males

while 42.4 per cent are females.

Table 4.2 Age Distribution of Respondents

I Age Group(Yrs.) No

1 d) Above 50 r 0 1 24 Total 125 I 0 0

his shows that 14.4 per cent are under 30 years.

26.4 per cent are from 30 to 40 years old. 35.2 p(?r cent are . .

_ I ..

from 40 to 50 years old while 24 per cent are above 50 years

old.

33.6 per cent are single. 57.5 per cent are married

while widows and widowers constitute 8.8 per cert.

Table 4.4 Educational Distribution of respondt- nts

Table 4.3 MARITAL DISTRIBUTION OF RESPClNDENTS C

( Educational Level ( No ( % -- -- --

a) Primary r- b) Secondary 1 ;2 i3.6

YO

33.6

57.6

8.8 -

100

Marital Status

a) Single

b) Married

c) Others

Total -

No

42

72

I I

125

53.b ~ J I ' cent attained secwdal y educ. ~tional level

while 66.4 per cent attained tertiary level. N o x had only . -

.(

primary education.

Table 4.5 Organizational distribution of respondents

I Organization I No

This shows that 60 per cent of the respondsnts work in

NITEL, PIC while 40 per cent work in FAAN. There is a '

larger staff strength in NlTEL hence, the wide difference in

number drawn from each organization.

Table 4.6 Types of privatization in the organiz3tions

a) NITEL

d) Full Privatization - -I-----

75

e) Partial Privatization

Total F-

All the respondents indicate that their organ zations are

both partially privati'zed. This means that t . ~ e Federal . - -

~overnment did sell or divest all its equity interests in both

organisations. It retains some percentages. NI-'-EL is 60%

privatized while FAAN is 70% privatized.

Table 4.7 Reasons for privatizatioti of the organizations

/ Reasons

a) Previous poor performance

b) To relieve government of financial burden

c) To enable it generate more revenue

d) To mgkc it ncfiorm more piilfitahlv

I e) 3% improve its performance

f) To minimize its operational costs

g) To make its operation efficient

h) All of the above

TOTAL

7.2, 4.8 and 6.4 per cent indicate that the c~ganizations

are privatized because of their previous poor pe forrnances, .. -

1 .I

to relieve government of financial burden and to mable them

generate more revenue respectively. 10.4, 12.8 and 5.6 per

cent indicate that it is to make them perform mar? profitable,

to improve their 'performances and to min mize their

operational costs respectively. But 52.8 per cent indicate

that it is for all these reasons.

By the middle of the 1980s nearly all the public

enterprises had depended on the government fcr financing. C

None was able to generate sufficient revenue for self

sustenance. Some were making huge losscs as their

operational costs exceeded the revenues generated from

their operations. Consequently, they operated poorly and

inefficiently. To reverse this trend, the governmmt decided

to privatize them.

It is believed that privatization will attract private sector

funds and managerial skills into the organizations. They will

become very competitive and efficient. C

Table 4.8 Responses to improved management by C

privatization.

73.6 per cent agree that the privatization programme

Total

has improved the management of the organisatims while ,

26.4 per cent disagree.

It is anticipated that when the organiz~tions are

125

privatized thc new owners will prnnlov mnre Wlod and

I 0 0 - i

ei i i~ien t irianagers to manage the organizatior s. Being

versed in the new rnanag~rial grid, the new marlagers will

inject new managerial blood into the organizations.

Tablz 4.9 impact of privatization on manag ?merit of the

organizations.

I Impact

a) Improved planning system I--- b) Better organizing strategies

c) Effective directing

d) Effective supervision and control

1 e) All of the above

I f) None of the above

TOTAL

12.8 and 8.8 per cent indicate that privalization has

improved the management of the organizations through

improved planning system and better organizinc strategies

respectively. 8 and 11.2 per cent indicate that ii is through - effective directing and effective directing and effective

supervision and controlling respectively. 322 per cent

indicate that it is through all these ways while 26.4 per cent

indicate that it is through no way.

As a matter of fact, since the last five year1; the running

of the organization$ appears to have bee7 improved.

~ s p e c i a [ i ~ in NlTEL Plc, staff develo7,ment and

compensations as well as investment in new equipment '

have improved significantly. These are evider ce of better

resources management.

Table 4.10 Responses to extent of improvement in

Management

Responses

a) To a large extent

b) To a little extent

c) Not at ail

Total .- ---

44.8 per cent indicate !ha I J

privatization h; rs improved

the management of the organizations to a large 3xtent while

28.8 per cent indicate that it is to a little extert. 26.4 per

cent indicate not al all. This shows that a larger proportion of

the respondents believe that the programme h: s improved

the management of the organizations.

Nevertheless, the extent of managerial imwovement '

depends on the degree of efficient resources mmagement - . .4

and utilization. Besides, it depends on the extent of returns

to the organizations.

Table 4.1 1 Responses to privatization improving

organisational performance.

a) Yes

b) No

Total

76.8 per cent agree that privatization has irnxoved the

performance of the organisations while 23.2 per cent

disagree. The respondents who responded neg4ively are

Measured in terms of availability of services, revenues #

generated, and profitability, NlTEL has performed creditably.

This was contained in the organization's Annual Reports in

2002 and 2003.

1

Table 4.12 Indications of Improved Performanc e

-- Indications

a) Reduction in operational costs

b) Increased revenue

c) Enhanced profitability

d) Improved services

e) Better resources management

f) All of the above

g) None of the above

TOTAL

This shows that 76.8 per cent indicate that

,

the

performances of the organizations have been improved

through reduction in operational costs, increased revenue,

enhanced profitability, improve services and better resources

management and utilization. 23.2 per cent indicale none of

these. The former are mainly NITEL staff while thc. latter are

FAAN staff.

1

Apart from the two organizations taken irto this study

most of the priva'tized enterprises have significantly - -

improved in their performances especially in terms of *

revenue generation, provision of services and profitability.

Table 4.13 Responses to Increase in efficiencv

75.2 per cent agree that privatization has increased the

eificiency of the enterprises while 24.8 per cent d sagree. In

its economic and management sense, efficiency implies

providinn - - ttiv nr~niest service i(-)r tlw !-)rsnyd~ ~t 117 7 minimum

LU& But in a narrow sense, we may think of efficiency as a

situation in which an enterprise is able to provide goods and

services satisfactorily for the people. The concept of cost is

not always considered.

e

Response

a) Yes

b) No - T - -.-.

No

94

31

A25

YO

75.2

24.8

100

Table 4.14 Indications of efficiency

Indications I

. . *

a) Technical efficiency

b) Cost efficiency

c) Service efficiency

d) Operational efficiency

e) Profitability

f) Productivity

g) Efficiency in financial management

h) All of the above

i) None of the above

Total

From the table, it can be seen that 7.2, 6.4 and 8 per

cent indicate that the enterprises have achieved technical,

ccrst and service effciency respectively. 5.6, 6.4, 5.6 and 4

per cent indicate that they have achieved "hey have '

achieved efficiency in terms of operation, profitability,

productivitv 2nd financial management r?qxr,tiwly. 36.8

per cent indicate all these conditions while 23 per cent

indicate none of the& factors. . - -

a .(

All these factors give the broadest rleaning of *

efficiency. Technical efficiency means that the enterprises

are now making the most effective use of its human,

r n - C I I IcLerial and techriical resources. Cost efficiency means

minimization of operational costs. Service and operational

-- . -efficiency implies increased output c7nd services i ~ t all times.

Prsfltability means earnings above costs of operation.

Productivity implies that employees are now

contributing their best while financial management efficiency C

implies better utilization of generated funds. Tht! incidence

of fraud which undermined the operations of the public

enterprises in the early 1990's have been minimized

significantly.

Table 4.15 Responses to increase in investment

86.4 per cent agree that privatization ha-; increased

investment in the enterprises while 13.6 per ccllt disagree. r

There is no doubt that investment in the ente-prises has

increased. Government sold 80% and 70% c f its equity

shares in NITEL and FAAN respectively to the private sector

investors. Besides, the new management have also

engaged in new investment projects in the organi ~ations. All

Table 4.16 Responses to privatization increasing returns

on investment.

Response

a) Yes

b) No

Total 125 100

73.6 per cent agree that privatization has inzreased the 4

returns on the new ihestment in the enterprise: while 26.4

cent disagree.

Following the improved services by thc privatized

enterprises, their profitability also increased. This now e

makes the new investors in the enterprises to be receiving

increased dividends as the returns on the invest~nent in the

enterprises increase.

t

Table 4.17 Responses to ~ x t e n t to which privatization

purposes have been achieved

Response No YO

a) To a large extent 54 43.2

b) To a littl, -...,. .. , - 3

c) No at all 29

Total 125 100

43.2 per cent indicate that the purposes of p-ivatization

have been achieved to a large extent in the enterprises while I

33.6 percent indicate they are achieved to a little extent.

23.2 per cent indicate not at all. . .

, . - .* The implication of this is that the privaiization has

made some impact in the enterprises. At least, their

dependence on the government for funds has significantly

reduced and most.of them now generate enough revenue for

iiieir self-sustenance.

I Table 4.18 Factors militating a g a i ~ s t the eKectiveness

a) Nigerians' ignorance I 31 b) Nigerians' apathy i ** d) Inadequate political commitment

e) Unsophisticated capital market I 24 *---

Total

1 . , . . . . . .. . . - . . , . , . . .. .

4

24.8 per cent identify ignorance amon 1 Nigerians.

22.4 per cent identiffapathy among Nigerians. 16 per cent

ideniiiy ph&ia among investors. l i . G pel- cent identify

inadequate political (government) commitment while 19.2

per cent identify unsophisticated capital market. ,

A greater number of Nigerians and potent al investors

are ignorant about the privatization programme, its essence

and virtues. Others are not interested while meny potential

investors feel apprehensive about economic a d political

instability in the country as to invest in the enterpl-ises. Even

the government is still reluctant to the 'policy the

impetus, it needs to be very effective. Finally, t'le Nigerian

capital market still lacks the absorptive capacity for all the e

shares of the government that would be sold Ihrough the I.. . . -

capital market. All these hamper the effectiveress of the

capital market.

TEST'OF HYPOTHESES

Using the techniques described in 3.8 we shall test for

the validity of the hypotheses postulated in 1.5.

Ho: Privatization is "ot aimed at enhancing the performance ,

of public enterprises.

11,: FI ivdii/-atim I is aimed at en1 la IL~I lg 'I; le p rforrnance of

public enterprises.

Data in Table 4.7, we see that;

P = 82 = 65% = 0.65

Po = 0.5

N = 125

Based on the decision-rule stated in 3.8, we shall reject null

hypothesis and accept the alternative hypothesi,;, since the

computed Z is more than its critical value.

Hypothesis 2

Ho: Privatization has not improved the efftcien1;y of public

enterprises.

HI: Privatization has improved the efficiency of public

enterprises

Table 4.1 3 shows that;

Based on the decision rule, we shall reject the null

hypothesis and accept the alternative hypothesis.

Hypothesis 3

H'o: .Nigerians' apathy does not limit the effectiveness of the

privatization programme.

Hi: Nigerians' apathy limits the effectivene3s of the

privatization programme.

Table 4.1 8 shows that;

- - 3.25 Finally, we shall reject the null hypothesis and xcept the '

alternative hypothesis since the computed Z is mope than its

critical value.

5.1 SUMMARY OF FINDINGS

The major findings of this study are

- Some public enterprises are fully privatized while

others arc partially privatized. These enterprises are

privatized because of their previr )us poor

performances, the need to relieve government of its

financial burden in funding the enterpris3s and to C

enable them generate more revenue$ for self

sustenance.

They are also privatized so as to improve their

performances, enhance their profitability, minimize

their operational costs and to make their operations

efficient. It is also to improve their managerient.

- Privatization has improved the managem~nt of the

affected enterprises through effective planning, . - . . 1 .1

organizing, directing and supervisionlcor~trolling of

organizational resources.

- Privatization has also improved the performances of

the affected' enterprises through rec'uction in

operational costs, increased revenue, enhanced

profitability, improved services, effective resources

management and staff compensations.

- Privatization hqs also made most affected wterprises

efficient in terms of technical inputs, costs, and

operations as well as services being provickd, profits

being made, productivity of staff ancl financial

management.

- Privatization has also increased the level of nvestment r

in the privatized enterprises as well as returrs on these

investments. ?+. , . .

- The factors militating against the effectiveness of the

privatization in the economy . generally . include

ignorance and apathy among Nigerians i IS well as

investment phobia among potential investors. Others . include inadequate political cornmitn lent and

unsophisticated capital market.

5.2 CONCLUSION

Based on the research findings, the following

conclusion can be drawn;

1. Most of the privatized enterprises are not being

managed efficiently with their increased funding. This

nlanilests in their improved performance, increased '

efficiency and productivity and enhanced prclfitability.

2. Their improved operations arid perform mces are

considwable as indicated by increased inve8;tment and

returns on the investment.

3. The purposes of privatization of public mterprises

have been achieved to a considerable extent.

Financial burden on the government has bel?n reduced

and earning by the companies are now increasing ,

significantly.

5.3 RECOMMENDATIONS

The following measures will make the privatization - . I .I

programmes more effective in the economy;

1. The government and the Bureau of Public enterprises ,

should embark on intensive enlightenmerlt campaign

to educate and inform Nigerians about the xogramme.

This campaign should be sustained and ve y educative

to remove the problems of ignorance and apathy

among Nigerians about the programme.

2. The government should create the macro-economic

environment that will be favourable for the wivatization

programme. Relevant monetary and fiscal policies C

should be designed to favour the implemenlation of the

progranme. Banks should lend crcclits to F1igerians for

the' purposes of buving the shares. The loan

repayment and interest rate should be clmducive to

borrowers. On the other hand, tax on divdends from

shareholders should be minimized. All these

measures will remove investment phobia among

Nigerians when the macro-economy is stable.

3. The government should show more commi ment to the

success of the programme by being unbhsed in the

enterprises to be privatized. The implemedation plan

as approved in the first phase shoul3 be fully

implemented. And, the government sho ~ l d provide

soft revolving' loans for civil servants to e~ab le them

C

purchase the shares.

4. The Nigerian capital market should be given the

necessary facilities it needs for effective

implementation of the programme. First, its activities

should be globalized to expose the market to

international investors. This will widen thcj marketing

of the shares of the enterprises being privatized.

Secondly, it will attract foreign investml~nt in the

Nigerian capital market and increase thr! inflow of

foreign capital into the company.

5. The new managers of :he privatized enterpr ses should

effectively see that the new managerial grid as

advocated for by the privatization programme is

introduced into the enterprises. Achievement of the

objectives of the privatization depends to a large extent - t

on the- efficiency of the new management. 11' the new ( ..

managers cannot effectively -plan, organize, direct and

control the resources and activities of the privatized

enterprises, the purposes of the programme will be

--%r, undermined and elusive. r ., lme-r A ,

6. The government should monitor the activities of all the

participants and stake-holders in both the pr 2gramrne

and the Nigerian Capital Market to ensure cclmpliance r

with the legal framework - rules and rc.:gulations

guiding the implementation of the programme. This

will ensure smooth and effective implementat on of the

programme.

Abubakar, A. (1 9985) "The Second Phase of the Privatization Programme" A PoIi zy Paper Presented to the W E . e

Adebuswyi, B. (2002: 1) "Rationale for Economic Restructuring Through Privatization" P Workshop paper presented in Jos.

Adesanya, J. (1 995: 15) "Assessing the Performarlce of ' . Public Enterprises" Econalyst. Dee.

Akpala, A. (I W O : Z O $ Management; An lntroductiu i And The Ni~erian Perspective. Enugu: Precisio I Printers.

Anyanwu, C. (2001 :37) "An Analysis of The Nigerian Privatization Programme "Bullion Vol. 22 No. 9.

Ayodele, 0. (2002: 37) "Issues In Privatization of F'ublic - Enterprises In Nigeria" Bullion Vol. 23 No. 4. e

Ejiufor, P. (1 998:25) Management of Public Enterwises In Niqeria. Lagos: Dominican Printers.

Ekaite, U. (2003:23) "Privatization Programme; So far, so good" Daily Times. Thurs, June, 5.

Fubara, M. (1 W9:5Z) "Evaluation of Public Enterprises Performance" A Survey Report.

Ida, M. (2001 : 18) Mqeria And EcnnomE Reforms 'Lagos: Inkc Fublishers Ltd.

Nigerian Stock Exchange (2002:8) Annual Repofis And Statement of Accounts. Lagos: N SE.

Obaji, 0. (2004:41) "Analysis of Nigerian Privatiation Programme" Bullion. Vol. 25 No. 2.

Odife, 0. (2000:51) "Guidelines On Privatization' Financial Times Mon. April, 3.

Sung, H. (1 999:Zl) Policy Economics For DevelopEnq Countries New Delhi: Hurnaleya Pre: is.

Ugbaja, C.O. (2000:45) "Public Enterprises And National Debts" Econolysts. Vot. IX No. 14.

C

nepartmmt of Man ~gement School of Post-Grar hate Studies UNEC.

July, 2004.

. .

Dear Respondent,

I am a student in the above mention( d institution

carrying out a study on the impact of privatizat on on public

enterprises. I want you to assist me by completing this

questionnaire.

The purpose of this study is academic and so the .)-

information you provide will be treated ~ i t h utmost

confidentiality.,

Thanks for your co-operation.

Yours faithf~lly,

Udeh, Anas' asia lfeoma

INSTRUCTION: Please tick ( 4 ) in the box that d 2picts your

choice of answer. Otherwise, answer the ques ion where

necessary.

Q.1 Sex; Male [ ] Female [ ]

Q.2 Age .....................................

Q.3 Marital status

(a) Single [ ] (b) Married [ ]

(c) Others[ ]

Q.4 Highest educational level attained?

(a) Primary [ ] (b) Secondary [ ]

(c) Tertiary [ ] (d) Others ------------- --------

Q.5 Organisation of employment?

(a) NITEL[ ] (b) FAAN [ ]

Q.6 How is this organization privatized?

(a) Partially [ ] (b) Fully [ ]

Q.7 l i i your opinion why is the organization privat zed?

(a) Previous poor performance [ ]

(L) Tu r-4ieve government of liiiai-lcial burc 2n [ ] I

(c ) .To enable it generate more revenue [ ] ( ..

(d) To make it periui-r~~ profitably [ ]

(e) To improve its performance [ ]

(f) To minimize its operational costs [ ]

(g) To make its operation efficient [ ] fl

Q.8 Do you agree that privatization has improved the

management of this organization?

(4 yes [ I - (b) No [ I

Q. 9 If 'yes' indicate how?

(a) Effective planning [ 1

(b) Effective organizing [ 1

(c ) Effective directing [ 1

( d ) Effective supervision and control [ ]

(e) All bf the above [ ]

(f) None of the above [ ]

Q. 10 To what extent do you think that its mana(1ement has

improved?

a) A large extent [ ] (h) R little extc nt [ ]

(c) Not at all [ ]

i , i d

Q.11. Do you think that privatization has improved the

performance of this 01-yankation?

!a) Yes[ I (b) No[ I

Q. 12. If 'Yes' indicate hov~?

(a) Reduction in operational costs [ ]

(b) Increased revenue [ ]

( c) Enhanced profitability [ ]

(d) Improved services [ ] ,

(e) Effective resources managernc nt and staff

compensations [ ]

Q.13. Do you think that privatization has increased the

efficiency of this organization?

(a) Yes [ I (b) No E I

Q. 14. If 'Yes' how?

(a) Technical efficiency [ ]

(b) Cost efficiency [ ]

(c ) Operational efficiency [ ] ,

I

(d) 'Service efficiency [ ]

9 (e) Profitability [ ]

(f) Productivity [ ]

(g) Efficiency in financial management [ ]

15. Do you think that the programme has increased I .I

investment in i i ~ e organization? 0

(2.16. Do you think that privatization has increased returns

on investment in the organization?

( a j Yes [ ] (b) No [ ]

Q.17. To what extent do you think that the purposes of

privatization have been achieved in the organization?

(a) A large extent [ ] .I :

(b) A little extent [ 1 C

(c ) Not at all [ ]

Q.18. Identify the factors militating against the effectiveness

of privatization.

(a) Nigeria's ignorance [ ]

(b) Nigerians' apathy [ ]

,(c) Investors' phobia [ ]

(d) inadequate political commitment [ ]

(e) Unsophisticated capital market [ ]