An Assessment of the Impact of Privatization on the Nigerian Capital Market
An Assessment of the Impact of Privatization on the Nigerian Capital Market.
ABSTRACT
This study examined the impact of privatization on the Nigerian Capital Market. The main research questions developed were to see whether the Capital Market played an important role in the process of privatization.
Whether the privatization programmed brought about efficiency in the privatized parastatals and whether there were increases in the profits of companies quoted on the stock exchange as a result of privatization.
The methods of data collection adopted were descriptive and the analytical tools used were arithmetic mean and percentages.
The main findings of the research were that the volume of trade in the Nigerian Capital Market increased tremendously, mainly as a result of the privatization exercise.
There was a significant increase in the profit and output of the selected enterprises after privatization and efficiency increased significantly.
The recommendations that were made were that measures should be taken by Bureau of Public Enterprise (BPE) and National Orientation Agency (NOA) to educate members of the public about the activities of the Capital Market and the need for deregulation of the Capital Market.
INTRODUCTION
Public enterprises are government-owned enterprises established mainly to provide infrastructural facilities such as electricity, telecommunication services, water and other essential services.
Despite the huge sums spent by various governments on these public enterprises, their performance has been far below average (UNDP, 1990).
These problems were well documented in a number of reports, notably the World Bank’s Human Development Report 1983. This report became the launching pad of a global programmed of public enterprises’ reforms in Nigeria.
We have thus become witnesses to a gradual evolution of a new economic order, which is characterized by structural adjustment programmed (SAP). The primary objective of SAP is the rationalization of national economy for the purposes of ensuring efficiency and effectiveness in resource allocation and utilization.
At independence in 1960, Nigerians found themselves in an odd situation where the foreigners among them held economic power and dominance, disproportionate to their number and contrary to the very essence of Independence. Obviously, the direction of the economy from the time of independence had to be changed.
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