Privatization is a key component of the reform process of structures and economies in the globalized world today. Developing countries have embarked on extensive development

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programmes some recorded as successful and some a failure. Despite the impressive level of

privatization in Africa, the empirical knowledge of the program is limited. Aside from theoretical

predictions, not much is known about the process and outcome of privatization exercises in Africa

in spite of the impressive level of activism and implementation.

As in most African developing countries, Nigeria witnessed the growing involvement of state in

economic activities until when the country adopted the Structural Adjustment Programme (SAP) in

1986 and the Privatization and Commercialization Decree [1] (1). The Privatisation and

Commercialisation Act of 1988 and the Bureau of Public Enterprises

Act of 1993 defined privatization as the relinquishment of part or all of the equity and other

interests held by the Federal Government or any of its agencies in enterprises whether wholly

or partly owned by the Federal Government. Although privatization is not defined in the

Public Enterprises (Privatisation and Commercialisation) Act [2] , we can assume that it

is deemed to have the same meaning.

Privatization became the forefront as a major component of Nigeria’s economic reform process.

With the government investing over N36 billion in form of loans, eqity and grant in over 500

companies between the period of 1973- 1990, there was not much growth in the economy. This lead

to serious fiscal deficits and this lead to the inefficient public sector investments to be questioned.

Introduction:

In both developed and developing countries, privatization and in some cases

commercialization have grown in popularity and acceptability. It has also become an

important instrument that government can use to promote economic development,

improve the production and distribution of goods and services, stream line

government structure, and reinvigorate industries controlled or managed by the state. [3]

( Rondinelli and Iacono 1996).

The articulation of government policy on Privatisation in Nigeria was concretized in the Structural

Adjustment Programme (SAP) embarked upon in July 1986,2 during the Ibrahim

Badamasi Babangida administration (1985 – 1993) [4] . As McGrew has argued, SAP is a

neo-liberal development strategy devised by international financial institutions to

incorporate national economics into the global market. In his words:

The vision of a “global market civilization” has been reinforced by

the policies of the major institution of global economic government

namely up to the mid 1990’s. Underlying them as Structural

Adjustment Programmes has been a new-liberal development

strategy – referred to as the washing on consensus which

prioritizes the opening up of national economics to global market

forces and the requirement for limited government intervention in

the management of the economy. [5]

One of the objectives of SAP therefore, was to pursue deregulation and Privatisation

leading to removal of subsidies, reduction in wage bills and the retrenchment of the

Pubic Sector ostensibly to trim the State down to size.