Effect of Privatization and Commercialization on the Nigerian Economy (1980-2015)

Filed in Articles by on July 26, 2022

Effect of Privatization and Commercialization on the Nigerian Economy (1980-2015).


This study examined the effect of privatization and commercialization of the Nigerian economy for a period of 35 years from 1980-2015 using simple regression analysis. The study also carried out its test using t–statistics in other to capture the pre and post effect of privatization and commercialization of the Nigerian economy.

This work made use of secondary data sourced from the central bank of Nigeria statistical bulletin.

The results of this t-statistics showed that GDP, labour force, telecommunication output and investment rate started increasing positively immediately after the policy was adopted while unemployment rate started increasing negatively after the policy was adopted.

Which simply means that the policy worked highly in favour of the economy in general due to the switching of ownership of public enterprises from the government to private.

This the course of this work the researcher went on to conclude thatthis policy generally brings a drastic change positively to the economy as a whole through the privatization and commercialization of certain sectors of the economy whereby recommending that this policy should be adopted by the government in other to boost economic growth.


1.1 Background of the study

One of the most debated economic policies in the developing world today is the privatization and commercialization of public enterprises in Sub-Saharan Africa, and its positive and negative implications both in the short and long run.

Public enterprises were established to propel socio-economic development and to guard against the control of the economy by foreign economies in line with the structural adjustment programme (SAP) in 1986.

This accounts for why a large proportion of the national budget has been voted for the creation and sustenance of public enterprises. In spite of this, the performance of public enterprises has been replete with varying degree of inefficiency.

There appears to be no universally agreed definition among scholars regarding the conceptual meaning of public enterprises.

For instance, Efange (1987) define public enterprises or parastatals as institutions or organizations which are owned by the state or in which the state holds a majority interest, whose activities which are of business in nature and which provide services or produce goods and have their own distinct management.

Obadan (2000), Obadan&Ayodele (1998) defined public enterprises as organizations whose primary functions is the production and sale of goods and/or services and in which government or other government-controlled agencies have no ownership stake that is sufficient to ensure their control over the enterprises regardless of how actively that control is exercised.

Privatization is the shift of some or all responsibility from the government to the private sector. It commonly refers to the practice of scale or long term lease of government enterprise. Commercialization on the other handis the process by which a new product service is introduced into the general market.


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