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Privitization As a Viable Tool For Economic Development In Nigeria

The research study amongst other things aimed at studying and evaluating how privatization of public enterprises / individual or group establishment will bring about efficiency and economic development in Nigeria with particular reference to NITEL. The analysis of response will enabled us to know the research findings that privatization is a critical factor for the economic growth and development and also that privatization can lead to effective working performance of any employee.


The write up carry along with the following chapters:


It discuss the introduction, the statement of problem, the purpose of study, significant of the study, scope of study, limitation of study, the plan of study and lastly the definition of the terms used.


In this aspect of the research, the Literature reviews, the concept of privatization, the benefit of privatization, privatization and the economic development, the problem of privatization.


At this level, the structural composition is analyse that firstly, the introduction, the privatization in Nigeria, the privatizations contribution on the states infrastructure, the promise of infrastructure privatization in Nigeria, the privatizations relation to capital market, employment, expectation and competition, the argument for and against privatization, the contribution of privatization to the economy till date, the historical background development of telecommunication in Nigeria, the privatizations biding for NITEL, the economic implication of the privatization of NITEL.


Here will discuss on data analysis and interpretation, the research design also is the method of data collection, the questionnaire design, the nature of data analysis, questionnaire administration and the hypothesis test.


Lastly the summary of area study, the conclusion and finally the recommendation.



1.0 Introduction

1.1 Background of the study

1.2 Statement of problem

1.3 Purpose of Study

1.4 Significance of study

1.5 Scope of Study

1.6 Limitation of Study

1.7 Statement of Study

1.8 Research Method

1.9 Plan of study

1.10 Definition of the terms used


2.0 Literature Review

2.1 Concept of Privatization

2.2 Benefit of Privatization

2.3 Privatization and Economic Development

2.4 Problem of Privatization


3.0 Structural Analysis

3.1 Privatization in Nigeria

3.2 Privatization State of Kwara State Infrastructure

3.3 The promise of infrastructure Privatization in Nigeria

3.4 Privatization: Relation to capital market, employment expectation and competition

3.5 Argument for and against privatization

3.6 The contribution of privatization to the economy till date

3.7 Historical Development of Telecommunication in Nigeria

3.8 Privatization: Bidding for NITEL

3.9 Economic Implication of the Privatization in Nigeria


4.0 Data analysis and interpretation

4.1 Research Design

4.2 Method of Data Collection

4.3 Questionnaire

4.4 Nature of Data Analysis

4.5 Questionnaire Administration

4.6 Test of hypothesis


5.0 Summary

5.1 Conclusion

5.2 Recommendation



The idea of privatization dates back to the position articulated by the classical economic who assumed that, here exists an unerring pendulum that always tends towards equilibrium, as the interaction of the market forces; demand and supply are believed to be capable of regulating the economy.

The more towards economic development has been the key aim of the Nigeria government since independent. However, the methodology of attaining this rapid structural growth and development has been a problem. To this extent, Nigeria since independence has been adopting different tactics towards development but, the implementation has been a problem. Besides, the use of state power, authority and resorts as to promote the economic well being of individuals and groups in society was introduced by the government.

All over the world, the public services as a matter of fact has not been know for the capacity to create wealth. Meanwhile public enterprises have usually been perceived as drain pipes for government budgets, this creating budgeting constraints and avoidable burden on the economy.

Attention which has been focus on the poor service delivery and inefficiency, financial waste and poor management and other sundry problems have cause irreparable damage to workes and organizational goal of efficiency and effectiveness. It become a national policy sector from the areas where the private sector has the comparable advantage to perform, while letting the date concern itself with the provision of infrastructure, security and the ending environment for business to thrive through enhanced wealth creation.

In the case of Kwara State, the issue of mismanagement and under utilization which led to huge wastage of resources and manpower potentials pave the government of the day no other option but, to pursue quickly the privatization programme. Privatization is an economic policy, which entails the transfer of ownership or control of public enterprises into private hand via government divestment and sales of shares.

However, this involves the private participation in the , management and operation of public enterprises.

Privatization is the vehicle for restructuring public enterprises, deregulation and major economic reforms. It attracts foreign capital through core foreign investors, foreign equity participation and injection of new technology.

Privitization aims to achieved efficiently, increase productivity and economic growth, which will enhance for capital income and standard of living. The private sector in Nigeria has developed sufficient known;

– How to be able to take care of investment. Financial and capital market are also sufficiently developed to be able to play the role of expected of them.

The predominant argument about privatization is on efficiency and that, government should concentrate on doing things which private operators should concentrate on doing things which and monetary policies. Another side of the argument is the need to inject additional funds into the economy from non government source. There is need for government to face the problem of dwindling foreing exchange reserves and heavy external debt. The fea should be erased from their mind because, pribatization has the effect ochanging the mix of employment opportunities and also can bridge the gaps between the rich and poor. One of the public enterprises with government 100% equity holding stated fro full privatization is the Nigeria telecommunication limited (Nitel).


Nigeria telecommunications sector has gone through metamorphosis since the colonial era. Telecommunication facilities in Nigeria were first established in 1880 by the colonial administration and these were geared towards discharging their administration function rather than provision of socio-economic development of the country.


As at independent in 1920, the total number of telephone line was only 18,724. for a population estimated at about 40 million people.


This translated to a teledensity of about 0.5 telephone lines per 100 people. The telephone network consisted of 121 exchanges of which 116 were of the manual (magneto) type and only 5were automated between 1960 and 1985. the telecommunication section consisted of the department of posts and telecommunications (P&T), where as, P&T provided internal network services, the National External Telecommunication (NET) provided the external services. The installed switching capacity at the end of 1985 was about 260,000 lives as against the planned target of about 460,000 lines, and all the exchanges were analogue.


Telephone penetration remained poor at one telephone line to 440 inhabitant against the target of 1 to 100 inhabitants recommended by the internal and telephone Union (ITU), for developing countries, congested and customer unfriendly, as a result of these, in January 1985, the east while P&T and Net were merged to form Nigeria telecommunications limited (NITEL), wile a postal division was carried out and reconstituted into the Nigeria Postal services (NIPOST).

There has been a modest development in the telecommunication industry since the inception of NITEL in 1985 with a public network of about 800,000 lines capacity as at date. In 1992, the telecommunications industry was deregulated, thereby breaking the monopoly in NITEL. This scenario created new entrants into the market as private telecommunication operators (PTO), there companies such as Multi-Links, inter cellular celtel e.t.c began to provide service within interconnectivity agreement with NITEL. A new down has just set in with licensing of MTN, ECONET, GLOBACOM and NITEL as providers of Global system of mobile (GSM) communications in January 2001. MTN and ECONET launched their services in August 2001, while the GLOBACOM launched their own service in April 2003.


With the deregulation of telecommunications sector in Nigeria, the country has therefore with nassed increased activity in the sector. The sector has proven to be a catalyst for the growth and development of other sector of the economy. However, the deregulation is only a prelude eventual privatization of the state owned NITEL.


This research findings is aimed at diagnosing the probleminhered in the public enterprises. Which precipitated privatization. There is also the need to evaluate the current privatization exercise of Nigeria telecommunication limited (NITEL) as a result of the ineffectiveness of the sector to provide a better and satisfactory services for the subscribers. This will be done with the view of determine how effective the exercise is in the telecoomunictions industry in terms of being the catalyst of industrial and economic development of any nation.

1.3 Objectives OF STUDY

The main objectives of study includes the following:

i.To strategically examine the effectiveness and efficiency of the Nigeria telecommunications limited (NITEL) in the face of privatization exercise in Nigeria

ii.To see how policies put in place by the government would enhance effectiveness of the privatization exercise

iii.To examine how efficient and effective the telecommunication industry (NITEL) is after the privatization exercise.


Privatization has assumed a global trandard it is necessary to be abreast with the current economic development across the world and in particular within the Nigeria economic.

As earlier mentioned, telecommunication is a catalyst of industrial and economic development of any nation. The sector has witnessed tremendous changes and competition in recent times. Therefore, there is need, the explore the potentials as well as us undertake a sheep look into how efficient and effective the privatization exercise in the Nigeria telecommunication section is in order to make meaningful contribution, suggestions and recommendations for the improvement and successful fully privatization policy in Nigeria and in the telecommunications industry in particular.


This research work will be exhaustive, fact finding entails objective analysis of the public enterprises performance with particular reference to telecommunication section (NITEL). The research will cover wider aspect in decision making relating to.

  1. The strategies being adopted by the privatization policy of NITEL Plc in their bid for greater development effective services delivery.
  2. The object of privatization policy as well as the development process.


The problem which will hinder the smooth process of this write-up may include the following:

  1. timely retires of questionnaire by the respondent
  2. the higher cost that will be involved in craying out the project

iii.the sensitive nature of the topic may make the respondent unwilling to provide the required data

iv.The interview problem, some those whom the researcher may not able to interview due to the fact that they were so busy or clearly avoiding the interview to feat of feat of possible reappraised from management.


This research work amongst other things aimed at studying and evaluating privatization, as a viable tool for development of the Nigeria economy with particular reference to NITEL.


This study will spring up five chapters:

Chapter one will comprise the general description of the study; introduction of the topic; background of the study, statement of problem, purpose of study, significance of the research, scope, limitation of the research, plan of study and definitions of the terms used.


Chapter two will be based on the literature review under the write up of various scholars and writers on privatization with the experience of Nigeria telecommunication (NITEL). And the benefits and problems of privatization.

Chapter three will take a look at the research method, historical background of the case study, statement of hypothesis population and sample size of study, method of data collection, analysis and testing hypothesis.

Chapter four, the research instrument of data analysis will be defined and the testing of hypothesis takes place with research findings chapter five will be the summary of the entire project work, conclusions and recommendations.


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