MANAGEMENT OF PUBLIC ENTERPRISES IN NIGERIA A CASE STUDY OF NTA, AWKA

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Price: 2000 Naira (BSC, MSC)

ABSTRACT   

Management in all ramifications has been noted as a critical and
indispensable element in all organizations. Nevertheless, public enterprises
are in dilemma of some management constraints, which tend to hinder their
goals and objectives. Against, the background of the above explication, this
research work empirically explored into the management of public
enterprises in Nigeria with a particular reference to Nigeria Television
Authority, Awka. The purpose of which is to investigate the management
problems of NTA, Awka and as well proffer solution to such problems.
However, in order to investigate this, relevant data were collected through
both primary and secondary sources such as direct interviews and well
structured questionnaire distributed to some staff in various departments of
the organization. Also other information was gathered from books, journals,
newspapers, unpublished materials and internet to complement the primary
data. From the analysis of the data, the findings shows that there are factors
that constitutes management problems of the company. Among the critical
factors are managerial inefficiency and government interference,
bureaucratic corruption, poor staff relationship, lack of motivation,
conflicting objectives, lack of training and development, excessive control
nepotism. These were identified as impediments of operational efficiency of
NTA, Awka. As a result of these problems the following recommendations
were made. Management should accelerate the growth of the company
through increase in skill and knowledge acquisition. Also training and
motivation is important. Government should curtail its excessive
interference and control on the affairs of this organization. It was also
recommended that adequate measure should be in place to check the menace
of corruption in the company. Furthermore, improvement should be
encouraged in staff relationship. Achievement of efficiency and
effectiveness depends to the extent management deviates from the above
mentioned problems; otherwise, achievement of goals and the task of
promoting economic growth and development will ever remain a dream

                                                                         

CHAPTER ONE

INTRODUCTION

1.1 Background to the Study
In most Countries of the world, particularly the developing ones, the
decades following World War II (particularly, the 1960s and early 1970s)
witnessed a massive intervention of the government in national economics.
One of the ways through which the government intervened in the economies
of these countries was by establishing public enterprise state-owned
companies. According to Ezeani (2006:211) stated “that public enterprise
was seen as veritable tools for achieving national socio-economic
development”. Thus, since the 1950s, successive governments have used
public intervention in the development process. This was eloquently stated
in the Nigeria Second National Development plan (1970-74) thus:
their primary purpose is to stimulate and accelerate National economic
development under conditions of capital scarcity and structural defects
in private business organizations. There are also basic considerations
arising from the dangers of leaving vital sector of the national economy
to the whims of the private sector often under the direct and remote
controls of foreign large scale industrial combines
Also according to Nwoye (2001:1) opined “that there are many
reasons for establishment of public enterprises, which one of them is
development emphasis, he further stated that in many developing countries,
the resources available to the private sector are not adequate for th
provision of certain goods and services for example, the investment required
in the construction of a hydroelectricity-generating plant or a water scheme
for large urban center are quite enormous and the returns on such investment
will take a very long time to realize. Ozor (2004:10) stated that “like many
other British-ex-colonial territories, Nigeria realized soon after political
independence that she still had to battle for her economic independence. Her
weak economic base limited infrastructural facilities, paucity of social
service-providing inadequate local financial entrepreneurship etc.
Furthermore, Adeyemo (2005:224) stated that “other factors that
accelerated the growth of Nigeria’s public sector was the indigenization
policy of 1972 as enacted by the economy, the policy further provided much
needed legal basis for extensive government participation in the ownership
and control of significant sectors of the economy”. Ugorji (1995:541) also
observed that “public enterprises have also been established for political
reasons; many government undertakings are used to provide jobs for
constituents, political allies, and friends, Public Enterprises and the
distribution of government employment were further been defended in the
need to maintain “federal character” and promote national integration.
Consequently, the Public Enterprises especially in developing
countries became active in likely sectors such as manufacturing
construction, finance, services, utilities, transportation, agriculture, natural
resources, etc.
According to Ezeani (2006:21) stated that “the colonial government
established some public enterprises to provide essential services like
electricity, railway, telecommunication and pipe borne water to mention but
a few.”
Also according to Obadan and Ayodele (1998:1) they opined that “it
is in order to put socio-economic development underway and also guard
government finances under conditions of capital scarcity and structural
detects in private business organizations, Nigeria and most other African
countries, regardless of Ideological dispositions, unavoidably made fairly
extensive use of public enterprises for resource mobilization and allocation,
particularly within the utilities and social services sectors as (NTA, Awka)
in the 1950s through the 1960s. In both technical and economic perspectives
Public Enterprises are seen as:
Organizations whose primary function is the production and sale of
goods and/or services and in which government on other government
controlled agencies have an ownership stake that is sufficient to ensure
their control over the enterprises regardless of how active that control is
exercised.
The Public Enterprises approach to resource mobilization and
allocation for national socio-economic development is in consonance with
the Keynesian approach to economic approach reflected the problem of
market failures and the growing demand for citizenship rights such as a
decent living standard, adequate education and health care, and minimal
social equality, he further stated that whereas in developing countries, this
approach became the pivotal policy option to ensure national development,
wealth redistribution, employment generation, and economic self-reliance.
In most developing countries like Nigeria, where ideology has not
played any significant role in the shaping of their economic activities, the
reason for the spread of public enterprises can be found mainly in the realm
of political, social and economic considerations, but not ideological.
Thinking in the direction, S.A. Sosna in Ozor (2004:110) asserted that:
The emergence of a fairly extensive public sector is a major regularity in
the development of the young states. Although, the scope and pace of
the change differ form country to country, the public sector and related
problems are central to their economic polices. To a certain extent this is
independent of what social forces that hold the reins of government; the
reason being objective factors, which are not rooted in political and
ideological motive alone but are associated with the processes occurring
in the multi-structural economic patterns of these countries and with
their economic and social situations.
Implicit in the above citations of eminent scholars in the subject
matter, is the fact that public enterprises are established for various reasons
which include not only ideological but also objective factors such as, the
provision of essentials services. Ozor (2004:111) also maintained that publi
enterprises are established to provide certain essential services and public
wants which if left in the private hands these services will be beyond the
reach of the average man in the society. Even when the exclusion principle
can apply in the satisfaction of these services, they are considered basic
necessities of these services; they are considered basic necessities or merit
goods.
Government must, therefore, step into provide such services and
subsidies their consumption; otherwise the discretionary pricing policies of
private monopolies will render their consumption too exorbitant for the
average consumer/citizen. This is why government establishes social
services like NTA, Awka in order to achieve its education and information
objective. This explains the existence of state governments.
Some public enterprises are established for the purpose of mineral
exploration and exploitation. The rationale is that the benefits of such
minerals should accrue to their owners. i.e. The public; in the producing
country. This is the reason for the establishment of the Nigeria Coal
Corporation, Nigerian National petroleum Corporation (NNPC) etc. Indeed a
prime reason for enterprises to undertake such major functions as
transportation, communication and manufacturing
Public enterprises may also arise as a result of governments desire to
create an integrated national economy and to stimulate balanced regional
development throughout the country. The establishment in Nigeria, of steel,
rolling mills at Oshogbo, Jos, Katsina, and Ajaokuta are clear examples.
Also, at times, public enterprises are set up by government in response to the
complaints of its citizens regarding poor services, extortionate prices,
uneven performance, and discrimination in private service delivery by
private concerns. For example, the establishment of state transports
companies by various state governments as well as the incorporation of the
national freight and cargo handling company about the high fare charged by
private transporters. In order, therefore to effect a fair distribution of service
and national resource and thereby achieve economic integration, various
governments in the federation had to address and redress some of these
complaints.
Another reason for the blossoming of public enterprises is strategic. In
most countries, national security has constrained the government to assume
direct responsibility for certain activities such as the production of arms and
ammunition including transport and fighter vehicles, military air fields and
defense installations. For one thing, investments in them are quite exorbitant
and sometimes prohibitive. For another, the security of the nation may be a
stake if private investors handle and thus become acquainted with
information regarding vital defense equipment and strategic military
locations and installations etc. This is the rationale for the establishment of
the defense industries Corporation (D.I.C) of Nigeria and the Government of
the United States of America’s Intervention in providing some military
establishments in America.
1.2 Statement of the Problem
Public enterprises are expected to have their hallmark and watchword
as efficiency and effectiveness. This is predicated on the rational behind
their establishment by both the state and federal government, but
unfortunately the reverse has been the case most contemporary public
enterprises are associated with inefficiency and ineffectiveness, which have
led to liquidation of some enterprises like the Nkalagu Cement Company,
This is reason Adeyemo (2005:223) stated that “inspite of the impetus
given to public enterprises especially in Nigeria criticisms are leveled
against them. He further stated that their problems are so enormous that even
left the Nigerian public in a state of great disillusionment. These criticisms
vary from lack of profitability and reliance on large government subsidies.
Also Ogundipe (1986:7) once argued that between 1975 and 1985
government capital investments in public enterprises totaled about 23 billion
Naira, in addition to equity investments government gave subsidies of 11.5
billion to various state enterprises. All these expenditures contributed in no
small measure to increase government expenditures and deficits.
Similarly, public enterprises suffer from gross mismanagement and
consequently resulted to inefficiency in the use of productive capital,
corruption and nepotism, which in turn weaken the ability of government to
carry out its functions efficiently. NTA, Awka is not excluded from this
problem. Still on the problems associated with public enterprises in Nigeria.
Obadan (2000:8) argue that, “in country after country, unbridled state
expansion has led to the following.
i. Economic inefficiency in the production of goods and services by
inadequate and costly delays in delivery of the goods produced.
ii. Ineffectiveness in the provision of goods and services such as failure to
meet intended objectives, diversion of benefits to elite groups etc.
iii. Rapid expansion of the bureaucracy severally straining the public
budget with huge deficits of public enterprises becoming massive drain
on government renounces inefficiency in government etc.
iv. Poor financial performance of Public Enterprises reflecting a history of
huge financial losses, overstaffing, and burden of excessive debts. Also
Ezeani (2006:223) opined that “most public enterprises operate at a
loss, and therefore, constitute a massive drain on government resources
through transfers and subsidies”. Obadan (2000:10) further maintains
that:
In Africa, the poor performance of Public Enterprises attracted a great
deal of criticisms, particularly, in the 1980s as the macro-economic policy
environment, arising from the impact of the global economic crisis
became less accommodation to the resulting inefficiency in resource
allocation.
Generally, speaking the performance of these enterprises has been
disappointing perhaps, these form the reason government embarked on
restructuring and strengthening of public enterprises in the country via
privatization and commercialization the purpose of which is to make them
more viable result oriented and formidable. This is the reason Rondinelli and
Lacono (1996:247) viewed that “Latin America countries such as Chile and
Argentina had transferred large-state controlled telecommunication railways,
power and energy, airline, mining and oil and petroleum industries to private
ownership or management during the 1970s and 1980s.” Also Ostrum and
Ostrum (1992:309) argued that in terms of improving state-owned
enterprises performance. Market forces are only half the equation. After all,
market are unforgiving. Even when carefully structured, they produce
inequitable outcomes.
Quite a number of public sector enterprises are operated without
respect to financial cost or returns. Not all such investment is expected to
yield immediate financial return as some of the benefits are social rather
than private in character that is, they accrue to particular or denominated
individuals.
Okigbo (1998:16) suggested that the production method must be
efficient and that the price change should at least cover the cost of
operations, therefore commercialization which differ from privatization is
one of the policy thrust of the reform of state-owned enterprises. Also Kuye
(1990:7) once asserted “countries such as United Kingdom, France, Canada,
Turkey, Nigeria etc. which adopted mixed economy, the government of
these countries have now accepted the obvious truth that if all, or at least
most of the public enterprises were turned over to the private sector they
would be better managed and their economy would fair much better in terms
of the set out goals.
In Africa, the poor performance of Public Enterprises attracted a great
deal of criticism, particularly in the 1980s as the macro economic policy
environment arising from the impacts of the global economic crisis became
less accommodating to the resulting inefficiency in resources allocation.
Also Ukwu (1985:80) he stated that “structure and management problems
real enough and should be addressed directly.
According to Ozor (2004:155) opined that “the performance of public
enterprises in Nigeria is nothing to write home about”, he also stated that
public enterprises in Nigeria have failed to perfume the initial role for which
they were established striking at this Augustine Otiji, in Ozor,(2004:156)
maintained that “the bane of the Nigerian Public enterprises has been that of
to underlined roles”, it is confusing to play a welfare role and at the same
time run a profitable venture the image of the public enterprises is so bad
that has come to symbolize inefficiency, red tapism, lack of initiative and
corruption, this may not be totally justified but it reflects apparent
dissatisfaction with public establishments. Implicit in Otiji’s assertion is the
fact that public enterprises have failed to live up to expectations and have
therefore become unviable.
Specifically looking at NTA Awka which is not excluded from the
above problem, it can perhaps be posited that management problems of the
company are multi-faceted such as operational inefficiency, poor employees
relation, over staffing lack of coordination at staff level, poor motivation,
conflicting objective and functional connection syndrome vis-avis under
utilization of staff.
However, against this backdrop, the primary questions that require
investigations and which these studies intend to address are:
i. What is management and public enterprise?
ii. What are the management problems of NTA, Awka?
iii. What are the effects of management problems on the operational
efficiency of NTA, Awka and the measures for overcoming these
problems?
1.3 Objective of the Study
In a nutshell, the objectives of this study are categorized into two: the
general and specific objectives. The general objective of this study is to
explain the management of public enterprise in Nigeria, especially NTA,
Awka.
On the other hand, the specific objectives are stipulated as follows.

  1. To explain the meaning of management and public enterprises
  2. To find out the management problems of NTA, Awka.
  3. To find out the effects of management problems on the operational
    efficiency of NTA, Awka and as well suggest possible panacea to these
    problems.
    1.4 Significance of the Study
    Theoretically, this research shall be a relevant material and a
    contribution to scholarship, constituting a reference material on the studies
    of management of public enterprises in Nigeria and related subject matter for
    further research. It will also expose the management of public enterprises in
    Nigeria including NTA, Awka to the modern styles of management and
    leadership, as well as other strategies for improving public sector
    performance such as Total quality management, Capacity Building,
    Decentralization, Ethics, Accountability and Information and
    Communication Technologies.
    Empirically, at the end of this study, it is hoped that it will create
    awareness and assistance on the need to improve the management of public
    enterprises in Nigeria especially the management staffs of NTA, Awka.
    In addition to this, the study provides baseline data on the numerous
    management problems undermining operational efficiency of NTA, Awka to
    the management of the enterprise, particularly the policy makers as making
    such information available will help to forestall future of the organization.
    Apart form contributing to empirical research and increasing the
    quality and quantity of information available in the field of management,
    most often; poor performances or services of some of these enterprises have
    attracted criticisms without any devoted attempt to identifying causative
    factors of these anomalies. It is on this premise that an in-depth research
    becomes imperative to pin-point these variables and at the same time
    proffers solution.
    This study at the end will enlighten the management of the company
    on the implication of employing mediocre instead of competent and skilled
    labour in the name of functional connection and ethnic consideration.
    Finally, this study exposes us to the effects of management problems
    of NTA, Awka on the operational efficiency and thus, it serves as
    correctional measure to the company and to other related enterprises that
    have similar problems, which erode and impair the productivity or rather
    performance of the company.
    1.5 Scope and Limitations of the Study
    This study is intended to examine the management of public
    enterprise in Nigeria with a particular emphasis on NTA, Awka.
    During the course of this study, the researcher was confronted with
    numerous constraints that pose difficulties to proper understanding of the
    subject matter.
    The first constraint relates to the dearth of adequate literature on
    management of public enterprises in Nigeria. It was rather difficult and in
    most cases impossible to get hold of certain documents and records that
    would have been vital to this study, most especially as it concerns
    endogenous problems that tend to displace the objective of the company
    from time to time.
    Also bureaucratic red-tapes and the hostility of the top level
    management could not help issues. There was misconception about this
    study to the extent the researcher was seen and treated as intruder. The
    human resources head refused answering most questions directed to him by
    the researcher.
    Finally, the location of the company posed a little impediment
    because the researcher was obliged to permeate beyond the boundary of his
    school to his state in search of materials and information.


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