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Economic Policy Implications of Port Concession in Nigeria

Economic Policy Implications of Port Concession in Nigeria

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Reference ID: PS-1042-TM

DEDICATION

This research work titled "Economic Policy Implications of Port Concession in Nigeria" is dedicated to God for his enabling grace and to all computer enthusiasts who help to make life a pleasant experience.

ACKNOWLEDGEMENT

I owe my indebtedness to my Supervisor (Name of your Supervisor), the Head of Department (Name of your HOD), the Lecturers in the department of Transport Management Technology, Book Authors and Profound Scholars of existing/related research material for your moral support that facilitated the successful completion of my (Tertiary Institution level). I am grateful to God Almighty and my parent for their financial support in my career. I really appreciate you all for everything, Thank you very much.


Economic Policy Implications of Port Concession in Nigeria

TABLE OF CONTENTS

PRELIMINARY PAGES


CHAPTER ONE

INTRODUCTION

  • 1.0 Introduction
  • 1.1 Background of Study
  • 1.2 Statement of the Problem
  • 1.3 Aim and Objectives of the Study
  • 1.4 Research Questions
  • 1.5 Research Hypotheses
  • 1.6 Significance of the Study
  • 1.7 Scope of the Study
  • 1.8 Limitation of the Study
  • 1.9 Definition of Terms

CHAPTER TWO

LITERATURE REVIEW

  • 2.1 Introduction
  • 2.2 Theoretical Framework
  • 2.3 Conceptual Framework
  • 2.3.1 The Concept of Privatization
  • 2.3.2 Privatization Methods
  • 2.3.3 Port Privatization and Economic Growth
  • 2.3.4 Private Sector Participation in the Ports

CHAPTER THREE

RESEARCH DESIGN AND METHODOLOGY

  • 3.1 Definition of Area
  • 3.2 Methodology
  • 3.3 Data Sources
  • 3.4 Research Design
  • 3.5 Sources of Data Collection
  • 3.5.1 Primary source
  • 3.5.2 Secondary source
  • 3.6 Population of the Study
  • 3.7 Sample and Sampling Procedure
  • 3.8 Instrument for Data Collection
  • 3.9 Validation of the Research Instrument
  • 3.10 Method of Data Analysis
  • 3.11 Definition of Variables/Hypotheses Testing
  • 3.12 Research Question(s) and Hypotheses
  • 3.12.1 Hypothesis 1
  • 3.12.2 Hypotheses 2
  • 3.12.3 Hypotheses 3
  • 3.13 Analysis of Application of Theory
  • 3.13 Test of Significance
  • 3.13.1 Test of Model Significance – Anova
  • 3.14.2 Test of the Model; Coefficient of Determination and the F-Test Approach
  • 3.15.3 Test of the Significance of the Explanatory Variables
  • 3.16 Assumptions of the Linear Regression Model
  • 3.17 Questionnaire Structure / Data

CHAPTER FOUR

RESULTS AND DISCUSSION

  • 4.1 Introduction
  • 4.2 Data on Privatization and Economic Growth
  • 4.3 Time Frame for Data Collection
  • 4.4 Discrepancies in Data Collection
  • 4.5 Representativeness of the Sample
  • 4.6 Empirical Results
  • 4.7 Descriptive and Demographic Characteristics of the Sample
  • 4.8 Determination of the Impact of Privatization on Economic Growth
  • 4.9 Testing the Channel of Transmission
  • 4.10 Evaluating the Statistical Assumptions for a Two-Stage Least Square Regression
  • 4.11 Results of the Test for Transmission Mechanism
  • 4.12 Testing for the Direction of Control

CHAPTER FIVE

SUMMARY, CONCLUSION AND RECOMMENDATION

  • 5.1 Summary
  • 5.2 Conclusion
  • 5.3 Recommendations

Reference

APPENDIX "Questionnaire Administration"

ABSTRACT

Previous research on privatization has focused on its effect on output, profitability, investment and efficiency at the level of the firm, neglecting the economic growth and other impacts. Nigeria's port privatization through concession in 2006 covered virtually all the ports in the economy. However, the few studies on the subject neither factored in the complexity that characterize the multiple port system nor controlled for alternative explanations of the changes in the economy. This correlational study tested the property rights theory by investigating whether the changes in production efficiency at the ports following privatization are good predictors of economic growth in Nigeria. Eight years of existing panel data were collected from Nigerian ports, providing 160 observations on several selected variables. The analyses controlled for the influence of confounding or interacting variables and addressed the complexity of the port system using linear programming. The multiple regression analysis showed that privatization, deregulation, cargo increases, interest rate, and inflation rate accounted for high variations in short and long-term economic growth. Port privatization transmitted growth to the economy through cargo throughput increases. The Malmquist linear programming analysis revealed overall but modest improvements in production efficiency changes after the privatization. By isolating possible areas of efficiency improvements, this study may inform port managers in Nigeria on ways to improve overall competitiveness. The potential contribution of the research to social change lies in clearly identifying the critical variables to economic growth in Nigeria to aid economic planning, poverty alleviation and improving the quality of life.


Economic Policy Implications of Port Concession in Nigeria

CHAPTER ONE

1.0 Introduction

The ancient Romans and Mesopotamians contracted out virtually all services in the state to private individuals and companies. Privatization as a policy has existed in one form or another since antiquity. In ancient Greece, the state retained ownership of land, forests, and mines but ceded the provision of services to the private sector. Nigeria is one of the SSA countries that embraced privatization, a policy instrument of the neoliberal growth theory of the early 1980s. According to neoliberal growth theory, the property rights conferred by way of privatization incentivizes the private sector to make a greater investment, intending to achieve higher efficiency gains, better services, increased productivity, and profitability (Tongzon and Heng, 2005).

As a prelude to other parts of this study, this chapter will discuss the background upon which this study was initiated, the statement of problems that led to this study, the Aim and Objectives of the study. Others are Significance of the study, Scope of work, Limitations of the Study, research hypothesis and questions, and Definition of technical terms.

1.1 Background of Study

Nigeria is the most populous country in Africa, with an estimated population of 177.5 million in 2014 (World Bank, 2015). The country lies between Benin Republic, Cameroon, and the Gulf of Guinea on the Atlantic coast of West Africa. Figure 1 shows the location of Nigeria on the world map.

Until the country rebased its economy in 2011, its economy had grown at an average rate of about 7.4% annually over the decade between 2001 and 2010. In the decade before 2000, the country’s average growth rate was only 1.35%. Since the rebasing of Nigeria’s economy in 2011, the average growth rate has been fluctuating between 4.89% and 6.31% (African Development Bank [AfDB], Organization for Economic Co-operation and Development [OECD], & United Nations Development Program [UNDP], 2015; World Bank, 2015).

The oil sector contributes over 80% of government revenue, although it is the non-oil sectors that have been driving the country’s growth in recent times. The nonoil sectors responsible for the growth include agriculture, manufacturing, telecommunications, construction, and mining, among others (AfDB et al., 2015). Figure 2 depicts the GDP performance of Nigeria in comparison with the real GDP compound annual growth for other emerging and sub-saharan African countries (World Bank, 2015).

However, the remarkable economic growth has neither reduced poverty nor created necessary jobs. The African Economic Outlook (2015) ranked Nigeria as low (less than 0.5) in the Human Development Index (HDI). HDI scores are on a scale of 0 (lowest) to 10 (highest). The same report also ranked Nigeria at 0.6 on the Multidimensional Poverty Index (MPI). About 100 million of Nigeria's estimated population of 177 million lives below the poverty line of less than 1 U.S. dollar (USD) per day. Although Nigeria created over 1.6 million jobs in 2013, unemployment was 38% in the 15-24 age group and 22% in the 25-44 group. The estimate by the National Bureau of Statistics is that over 4 million people enter the job market each year. The potential for economic development is stymied by huge infrastructure deficit, particularly in transport and power (Schwab & World Economic Forum [WEF], 2014). These low-ranking scores amidst high economic growth performance are indicative of the paradoxes that characterize the Nigerian economy.

In the next section, I present an overview of the privatization exercises leading to the concession of the 24 port terminals that were the subject of this inquiry.


1.2 Statement of the Problem

Investigation reveals the following problem of the economic policy implications of port concession in Nigeria;

  1. Difficulty in distinguishing the effects that are attributable to the privatization exercise directly from those associated with other intervening variables without controlling for the influence of the intervening variables,
  2. No impact on economies not implementing deregulation and trade liberalization policies simultaneously,
  3. Lack of proper investigation of the privatization of ports in Nigeria focused on the impact of privatization on productivity and other performance indicators, including cargo throughput, berth occupancy, berth capacity, ship waiting time, ship turnaround time, and port handling charges.

1.3 Aim and Objectives of the Study

The aim of the study is to analyze the economic policy implications of port concession in Nigeria. The specific Objectives are to find out the following:

  1. To investigate the effects that are attributable to the privatization exercise directly from those associated with other intervening variables,
  2. To investigate the impact on economies not implementing deregulation and trade liberalization policies simultaneously,
  3. To analyze the privatization of ports in Nigeria focused on the impact of privatization on productivity and other performance indicators.
  4. To improve the overall operational efficiency and competitiveness of the ports
  5. To reduce the dependence of the ports on the treasury for operations, in addition to fundamentally restructuring the economy.

1.4 Research Questions

The following research questions were formulated to guide this study;

  • What is the effect of port concession on economic growth?
  • What is the effect of the post privatization investment on productive efficiency of the ports after privatization?
  • To what extent does the post privatization productive efficiency of the ports predict changes in GDP, GDP growth, GDP per capita, and GDP per capita growth?

1.5 Research Hypotheses

The following research hypotheses were formulated to guide this study;

Hypothesis 1

  • H0: There is no significance relationship between the level of investments at the Nigerian ports that accompanied their privatization can accurately predict the ports’ efficiency.
  • H1: There is a significance relationship between the level of investments at the Nigerian ports that accompanied their privatization can accurately predict the ports’ efficiency.

Hypothesis 2

  • H0: There is no significant relationship between the linear combination of the ports’ total efficiency, institutional factors, trade openness, and cargo throughput and the level of the GDP in Nigeria.
  • H1: There is a significant relationship between the linear combination of the ports’ total efficiency, institutional factors, trade openness, and cargo throughput and the level of the GDP in Nigeria.

Hypothesis 3

  • H0: There is no relationship between linear combination of total efficiency, institutional factors, and cargo throughput could accurately predict the GDP growth in Nigeria.
  • H1: There is a relationship between linear combination of total efficiency, institutional factors, and cargo throughput could accurately predict the GDP growth in Nigeria.

1.6 Significance of the Study

The following are the importance of the research work;

  1. The study may enable policymakers in Nigeria to determine the level of confidence they would place in a privatization program as a panacea for economic restructuring and growth.
  2. Policymakers in Nigeria and critical stakeholders will be interested in knowing the extent to which the privatization program has achieved these objectives.
  3. Privatization has not resulted in the expected outcomes, policymakers, and stakeholders also want to know the underlying reason.
  4. The study may enable the World Bank and other development partners to assess their proposition that privatization engenders economic growth even in developing countries (Nellis, 2003).

1.7 Scope of the Study

This study focuses on the macroeconomic impact of privatization, privatization output, profitability, investment, privatization methods, and efficiency gains of privatized firms in the investigation of the research topic which is an economic policy implication of port concession in Nigeria.


1.8 Limitation of the Study

During the course of this study, many things militated against its completion, some of which are:

  1. Time Constraint: The time frame given to accomplish this project was very short due to school academic calendar and it was carried out under pressure which made the researcher not to implement some necessary features.
  2. Establishment Policies: Establishment policies posed a serious limitation as most staffs are not ready to release information needed forth is project work. There were lots of information needed from the staffs of this institute on to enhance the study which took them time to release or they did not release at all for security purposes, hence the scope was reduced.

1.9 Definition of Terms

  • Implication: An implication is something that is suggested, or happens, indirectly. When you left the gate open and the dog escaped, you were guilty by implication. Implication has many different senses. Usually, when used in the plural, implications are effects or consequences that may happen in the future.
  • Port: A port is a virtual point where network connections start and end. Ports are software-based and managed by a computer's operating system. Each port is associated with a specific process or service.
  • Concession: Concession is something that is allowed or given up, often in order to end a disagreement, or the act of allowing or giving this: Both sides involved in the conflict made some concessions in yesterday's talks.
  • Economic: Economics is the study of how humans make decisions in the face of scarcity.
  • Transportation: It is an act, process, or instance of transporting or being transported. Any device used to move an item from one location to another. Common forms of transportation include planes, trains, automobiles, and other two-wheel devices such as bikes or motorcycles.
  • Accessibility: accessibility refers to ease of reaching destinations. People in places that are highly accessible would reach many other activities or destinations quickly and people in inaccessible places can reach many fewer places in the same amount of time, so that nearer or less expensive places are weighted more than farther or more expensive places.
  • Logistics: Logistics is generally the detailed organization and implementation of a complex operation. In a general business sense, logistics is the management of the flow of things between the point of origin and the point of consumption in order to meet requirements of customers or corporations.
  • Logistics Management: Logistics management is the part of supply chain management that plans, implements, and controls the efficient, effective forward, and reverses flow and storage of goods, services, and related information between the point of origin and the point of consumption in order to meet customer's requirements. The complexity of logistics can be modeled, analyzed, visualized, and optimized by dedicated simulation software. The minimization of the use of resources is a common motivation in all logistics fields. A professional working in the field of logistics management is called a logistician.

CHAPTER TWO

2.0 Literature Review

2.1 Introduction

This chapter focuses on the review of related literature. A literature review includes the current knowledge as well as theoretical and methodological contributions to a particular topic. It documents the state of the art with respect to the topic you are writing. It surveys the literature in the topic selected. In this research work the literature review includes the …

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