1.1 Background of Study
In any developing economy, the government is the main initiator and promoter economic development, especially in Nigeria. In developing countries, government usually intervene in some areas of the economy in which the private sector cannot perform, according to Abubakar (1986) in order to facilitate the federal government has instituted and made use of many public enterprises over the years.
It would be recalled however that in the fifties and sixties, agriculture was the main stay of the Nigerian economy. The early seventies earned for Nigeria a lot of revenue including revenue from all level that was never anticipated. This new dimension got government involved more with widely diversified investments in areas that span both the traditional public sector and exclusive private sector business.
As a result of this development include oil, agriculture that was the main stay of our economy was later given less attention. Owing to this circumstance, the government investments were sponsored mostly by the oil revenues. The oil boom era (1974-1979) has been described as the golden era for public investment. The government invested in over 30 parastatals and companies within this period. Most of them have been unprofitable; some cannot even meet their operating costs and have depended on government subventions for their year to year survival.
Public co-operations in Nigeria have been considered inefficient and wistful; this is because they have viewed it with the profit criterion. Kindleberger (1986) however Hinks that this is not a fair judgment, economic activities, it is usually not appropriate to use the performance standard of the private sector they are, the objective of private business is profit, while the government enterprises is services to the society or promotion of general welfare.
Olisa (1985) said that prior to independent and after Nigeria was faced with the problem of attaining her social economic objectives, there was no well destined capitalist class that could operate the much needed development through their productive and industrializing activities. The civil service as that time was inappropriate for accelerated development and the country was saddened with the problem of running many businesses.
These parastatals are established outside the civil services and this allows for greater freedom of action, quicker decision making which will promote their efficiency and effectiveness. These corporations are managed through government appointed officials who could utilize the profits accruing from their operations in catering for the public interest (onwudunm:1970). (Ugwu:1990) said that in Nigeria, it is very unfortunate that government have rapid development and this is because the management of these enterprises have constituted the bane of these enterprises.
Most of them failed to meet people's expectations in terms of provision of goods and services and development in general. The commercially oriented ones neither make profit nor even sustain themselves. All efforts by successive government yield no positive result despite various commissions of inquiring and review parties.
The performance of these enterprises still fall shorts of people’s expectations. It is based on this hat the researcher finds the needs to investigate these problems in power holding company of Nigeria (PHCN).
Therefore, in Power Holding Company of Nigeria (PHCN) where the research was carried out, the activities that was conducted is to know the Assessment of Management Problems of Public Enterprises in Nigeria.
1.2 Statement of the Problem
It is important to note that public enterprises in any given economy has important role to play in the rapid socio-economic development of the country.
Government owned enterprises and business in Nigeria are established to accelerate the pace of economic development in which government is the major investor. Due to the important roles associated with the major public enterprises in Nigeria. There is need for good management for its efficiency. It is a fact that government spends large sums of money in setting up these enterprises and this look forward to making profit.
As a result of inefficiency in running these enterprises, federal government and state government have in the recent past set up committee which studied the public corporations and parastatals and recommended privatization and commercialization of some of these enterprises. These enterprises perform so poorly than privately owned business.
Since public enterprises are important in growth of any economy, there is the need to investigate the problems of public enterprises in Nigeria? Also, there is need to identify the reasons for criticism leveled against them. Despite the enormous investment in public enterprises, is Nigeria obviously not getting good value for the money being spent or invested on these public enterprises. This gives the decision to this research on “management problems of public enterprises in Enugu state” using PHCN as a case study.
1.3 Aim and Objective of the Study
This study is aimed at the assessment of management problems of public enterprises in Nigeria with a view to identifying these problems and therefore coming up with solutions to them as related to the aforementioned corporation. In achieving this aim, the following specific objectives were laid out as follows to:
- Assessment of management problems facing the public enterprises like inadequate finance, poor managerial skills, inadequate infrastructural facilities etc.
- Examining the influence of the problems on the corporations in particular and state as a whole.
- Identify if there is any impact of government interference on their performance.
- Giving recommendation based on the findings of the study and suggesting suitable ways and strategies of improving the managerial efficiency.
1.4 Research Questions
The study came up with research questions so as to be able to ascertain the above stated objectives. The specific research questions for the study are stated below as follows:
- Can the government tackle the problem of the management of public enterprise in Nigeria?
- How can management proficiency be determined in public enterprise?
- In what ways could the solution of these problems helps PHCN to improve in their management functions?
- What impacts could it create in the transformation of PHCN productions?
1.5 Research Hypothesis
In order to pursue the objective of this study, the following generalized statements have been designed to guide and aids in obtaining the result for the experiment to be conducted. For this work, the null hypothesis will be represented with H0 while the alternative hypothesis will be represented with hypothesis H1.
Hypothesis One
- H0: There is no relationship between efficient management of public enterprises and high productivity in Nigeria.
- H1: There is a relationship between efficient management of public enterprises and high productivity in Nigeria.
Hypothesis Two
- H0: Poor managerial skill does not affect pubic enterprises in Nigeria.
- H1: Poor managerial skill affects pubic enterprises in Nigeria
