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Problems Facing Public Enterprises inNigeriaBy ARTICLES | Published: MAY 20, 2013

Problems Facing Public Enterprises in Nigeria

Problems Facing Public Enterprises in Nigeria The variety of

approaches to the theoretical background of management have provided their

own versions of what is meant by such key word as management. There is no

generally accepted definition of management as an activity. Management has

been defined by different authors. Frost G. (1966:13) defined management as

the act of directing human activities in such a way as to achieve the greatest

possible measure of conformity with company policy. Kast and Rosenzweig

(1974:28) refer to management as the process whereby resources of men,

machines and materials, time, money and space are converted into useful and

effective enterprises.

Management is a process of organizing and employing resources to accomplish

predetermined objective as well as planning the means of reaching them.

Despite the differences in approach, the various authors have one thing in

common and that is the planning and directing of resources towards the

accomplishment of a set goal.

Public enterprises are mainly government owned business organizations

charged with the responsibility of providing services that are of public interest.

In Nigeria, public enterprises include Universities, Nigeria Railway

Corporation, Federal Radio Corporation, Nigeria Television Authority, water

Boards, the Ezzamgbo building material industry etc. Each of these

organizations is established by the government, hence the extent of their

operation and ownership of property are subject to control by the government.

According to William A. R. (1989:46), the major concerns of public enterprises

are to provide vital services for peoples welfare and progress and to accelerate

development. The question however, is whether these public enterprises have

been fulfilling their public functions to the public.

The origin of public enterprises in developing countries dates back to colonial

period when many European nations utilized public corporations as an arm of

their government for seizing foreign territories (Pabrikant 1976 quoted by

Okpata 2004: 360).

Historically, the system of public enterprises began in Nigeria in 1888 when

the British Colonial Administration undertook the Railway Transport project in

Nigeria from Iddo in the capital city of Lagos to the Hinterland. This was

followed by coal mining, electricity and marine which later became ports

(Tokumbo 1990 quoted by Okpata 2004). Among the earlier public

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corporations include Nigeria Railway Corporation (1955), National Electric

Power Authority (1952), Nigerian Produce Board and Development Board

(1950) among others (Okpata 2004:360).

Still on historical perspective of development of public enterprises in Nigeria,

after the political independence of Nigeria in 1960, the influx of public

enterprises increased immensely as the Nigerian Policy formulators resorted to

the use of public enterprises as viable instrument of implementing

development programs.

The major Landmark in the evolution of public enterprise in Nigeria came in

with the conversion of public utilities operated under government departments

into public corporation. Public utility is an organization that supplies water,

electricity, gas etc to people while public corporations are established by the

government to cater mainly for the society. The impetus for this change came

as a result of the

growing commitment in Britain after World war II to expand private

investment in colonies to create new demands on the existing infrastructure

and a simultaneous potential organizational model from the way in which the

infrastructure were managed to meet demands, was the first reason for the

conversion of public utilities to public enterprise while the second reason was

the new doctrine of greater state economic intervention in the British

economics reflected in the establishment of new corporations which later had

some effects in Nigeria. Nigeria witnessed a rapid growth of public enterprises

during the post independent era thus emphasis on public enterprises varied

with development plans (Okpata 2004 : 360).

Meanwhile, a close and critical look at some public enterprises be it federal,

state or local government owned, reveals that something is wrong somewhere.

This really calls for a serious investigation but already, Agulua (1991:36) thinks

that the current commercialization and privatization of government parastatals

and companies throughout the country, would permanently put to an end the

inefficiency, mismanagement and lethargy which he feels, had characterized

these organizations.

There is no doubt that some of these public enterprises that do not seem to be

living up to expectations of the public, have a role to play in the overall

National development; the developmental role of the public enterprises is set

out clearly in the countrys constitution which provided for the economic

objectives of the state policy. To achieve the economic objectives, the

government in the Nigerian policy should assume the role of the entrepreneur

and set up the public corporations (Ademolakun 1983:47).

This bold step taken by the federal government as a solution to the problem of

poor performance of the organizations owned by the government is a clear

indication and admission that the general idea of poor management directed

against most government or public enterprises has strong base.

1.2 STATEMENT OF THE PROBLEM

There is no human endeavour that does not require proper management for its

proper functioning. All types of enterprise require good management and

performance to function efficiently and effectively.

Public enterprises depending on the goals set out for each are expected to

render some welfare services to the people, generate revenue with which to

finance developmental projects; undertake certain infrastructural facilities such

as ports and harbours and also provide employment opportunities. It is

unfortunate that these enterprises being established by government have been

viewed as being unable to perform up to the standard expected of them by the

public, that they are meant to serve.

This has attracted a lot of attention and general comments in several quarters,

both from the government and the governed, the private and the public sector

itself. The general idea far and wide is that these public enterprises are

suffering from poor management. These comments both positive and adverse

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need some investigation and that is what this project intend to do. This study

therefore focuses on the management of public enterprise in Nigeria: issues,

problems and prospects, using Ezzamgbo building materials as case study.

1.3 OBJECTIVES OF STUDY

From the statement of the problem, the research work is meant to achieve the

following objectives:

(1) To examine the nature and issues of public enterprise in Nigeria.

(2) To find out the problems facing pubic enterprises especially the Ezzamgbo

building material industry.

(3) Another objective is to look for strong measures which if adopted, would

definitely improve on the management of public enterprises and to make

recommendations where necessary.

1.4 RESEARCH QUESTIONS

1 What is the nature of the problem existing in the public enterprises?

2. What are the strengths and weaknesses of such organization?

3. Does the type of management structure have effect on the operations of the

organization?

4. Are there ways of improving or strengthening the operations of the

organization?

5. Are there any benefits in having a government owned company?

1.5 SCOPE OF STUDY

The study covers the issues of public enterprises: The basic problems with

public enterprises in Nigeria and the problems associated specifically with the

management of the Ezzamgbo building materials industry Abakaliki. For

convenience sake the researcher has decided to use Ezzamgbo building

material industry as a case study.

1.6. SIGNIFICANCE OF THE STUDY

(1) The study will be of benefit to a whole lot of managers, policy formulators,

policy makers and executors, all of those that run the affairs of government or

public businesses and future researchers on the management of organizations,

particularly government or state owned ones.

(2) The study would help to make public mangers or intending young public

managers more knowledgeable and informed on how best to achieve high

performance and sound management in public enterprises.

(3) The research work is important in that it would bring to lime light, the

contributory factors to the problem of poor management in public enterprises

and the general implications on the enterprises, the environment and the

people, that the enterprises are meant to serve.

(4) The work will also serve as a source of literature for students and

researchers who may want to carry out further researches on similar or related

issue or topic.

1.7. LIMITATIONS OF THE STUDY

In the course of this study of public enterprises in Nigeria, the researcher

encountered some unavoidable constraints. These constraints placed some

limitations including time as the work should have taken at least one year to

accomplish rather than few months within which the researcher worked.

Furthermore, the prevalent economic crunch and the attendant financial and

mobility constraints played another devastating role in preventing the

researcher to use certain approaches and methods in the course of this study.

LITERATURE REVIEW

2.1 INTRODUCTION

It is an obvious fact that when two men co-operate to roll a stone that either


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could have moved alone, the rudiments of management have appeared. The

first ingredient of management is people because people have to be present

before management can take place. Government like any other body operates

businesses.

The management of public enterprises, like Ezzamgbo building material

industry is not an easy one, this stems from the fact that virtually all the

strategic policies and programmes of the organization is strictly governed and

regulated by the government in charge. The government first and foremost has

to constitute board of directors and also enforce government programmes on

the organization through the management offices.

Ezzamgbo building materials is owned by Ebonyi state government and as a

result owes its responsibilities to them. It has to act in accordance with the

rules and laws guiding it and should not act outside its powers

The brief history and information collected from the company under study

shows that the Ezzamgbo building material industry Abakaliki was established

on 30th March 1989 under the then Anambra State government. However,

the creation of the Ebonyi State in October 1st 1996, changed its ownership

status as the company management was handed over to the Ebonyi State

government. The Ezzamgbo building material first formed partnership with an

Israelites firm called Diezengorf West Africa Limited. The firm has been

managed by five different managers.

The company produces different products used for building some of its products

include:

Concrete Electric Pole

Ring Culvert of different sizes

Blocks of different shapes and sizes

High tension poles

The firm also produces Tarazole tiles, which due to vandalization of the

plant is no more functioning.

They also produce products like rod cubes, concrete slabs etc.

The firm has a section that differentiates their products from others. Currently,

the firm has staff strength of 48 comprising of senior and junior staff.

As we progress in the course of this study, we would very much appreciate the

dynamics and complexities surrounding the management of public enterprises.

The emphasis of any government owned or public enterprise is on the overall

approach to solve organizations problems and it is through management that

day-to-day operations and organizations of any establishment become effective

and successful.

The rest of the literature review is arranged as follows:

The general concept of management

The origin of Nigerian Government owned or public enterprises

Public enterprise defined

The concept of public enterprise

Organizational problems of Nigerian public enterprises.

Prospect for a better management in public enterprises.

Nevertheless, government owned or public enterprises have been discovered to

be a viable-organization for social-economic development of the society.

2.2 GENERAL CONCEPT OF MANAGEMENT

The concept of poor management is not new to us. It has generated comments

or several discussions in the past. However, this review becomes necessary in

order to provide a clearer perspective for this study.

In essence, it is reasonable that we first of all know what is meant by

management and all that go with it. The most comprehensive definition view

management as an integrating process by which authorized individual create,

maintain and operate an organization in the selection and accomplishment of

its aims (Hanrie 1977:26).

Management or administration is inevitable in any organization, set up for a

defined purpose or objective, whether a university, a broadcasting firm, the


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army, an industry and the like because each consist of human beings brought

together in a hierarchical set up, employing instruments both human, financial

and material resources all in a bid to attain the objective for which the

organization is established.

Following the definition, administration is present whenever and wherever two

or more persons come and put their resources together in an attempt to achieve

organizations objective. The large numbers of employees have to be supervised,

coordinated and controlled. In most industries, the span of activities is

nationwide. Often, it is international. Thousands of workers have to be brought

together and distribute for work among the various departments which the

establishment is composed and are graded in different levels of authority, from

managing Directors, Directors and managers at the top to cleaners at the

bottom. Everyone has to be assigned his specific function and contribution of

each must be towards the objective of the whole organization.

The same is applicable to the state, the church, the army, the media outfits and

in any organization in which large number of people are employed at different

levels of authority but all working towards the achievement of the

establishments objective.

Adams (1913:47) it is because of this that made organization and management

the main constituents of administration. Administration or management could

be public or private. Public administration refers to the practice of

administration in the public enterprise; policy and management go hand in

hand.

The other type of management is private and it is the management that takes

place in the private sector of the society. Having known the meaning of

management in a wider sense and when it is public or private, I believe we can

now ask when is management poor or what constitutes to poor administration

concept.

Though we hinted earlier that we will be ready to admit that we might find

ourselves in disagreement with other people over what constitute poor

management, the fact remains that the concept of poor management open up

the great question of performance, effectiveness and efficiency of a set-up and a

quest for good and sound management.

Poor management, like mismanagement is a large subject, it occurs wherever

social organization exists (Weave 1973:52) it is not confined to operators of

government or state alone. But we shall confine ourselves as it occurs in the

public sector, since from the meaning of management which are earlier

exposed to the tendency of experiencing poor management, it is quite high in

the public sector which include government and its agencies.

Agulua (1991:44) writing about poor management of public enterprises, gave

appointment of wrong managers by government to run affairs of her

organization as one of the basic causes of poor performance of such

organizations. This in effect means that political foundations of such

institutions are great constraints to their smooth operations. An efficient public

sector continued Agulua, must be able to shift resource in the same manner

and way that private enterprises do in response to signals from the market.

They cannot even though in most cases, the public sector performs poorly or is

castigated for effectiveness and inefficiency since by regulation they are

bounded.

Also, writing on the contribution of politics in poor management and

administration, Ifedi (1991:23) said that the public enterprise largely manifests

the negative impact of political intervention. The effectiveness of the boards

depends very much on the caliber of its membership. Ideally, those nominated

for appointment to the board of directors should be persons who posses

relevant knowledge and experience which would enable them to contribute

effectively to the running of public enterprises.

Commenting also on poor management, Njoku (1990: 50) said that

non-prosperity and performance of government business was essentially


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because management principles were not obeyed. For example, appointments

are not given necessary to the officer with the requisite qualifications and

experience but to the person that belong to the ruling group. Meanwhile, an

aggregate of all the management schools called contingency theory of

management, says the effective manager or administrator is therefore the

individual who is able to analyze and assess a particular situation and then

supply appropriate techniques or principles to the situation.

Now, it can be understood that the position of an administrator or manager in

an organization is strategic and a keystone to the success, existence or failure of

the organization. It is therefore suitable to say that whatever may be the

future, the science of management will be the essential instrument of human

welfare. Benard (1941:63), the future of civilized government and civilization

itself, rest upon our ability to develop a science and philosophy and practice of

civilized society.

Finally, it could be said that in the government organization structure, to

achieve effective and efficient management of scarce resources is the most

effective instrument to adopt, particularly in our presidential federation with

three-tier government hierarchy.

2.3 THE ORIGIN OF NIGERIAN GOVERNMENT OWNED ORGANIZATIONS

At all stages in the development of society, important administration has been

carried outside the strictly governmental sphere, from the family in the

beginning to the commercial and industrial corporation or company of the

modern age.

Organizations of public type arose at an early stage and many have been

referred to in this work. One need only mention the chartered companies

employed as instruments of overseas development, out of which purely

governmental institutions took shape, like the notable East India Company;

established during the reign of Queen Elizabeth I. Publicly sponsored or

controlled bodies have commonly been established outside the ordinary

government to provide communal services of all types.

The modern nation based public co-operation gradually took shape out of

earlier types of organization and its distribution has gradually widened in the

shape of a corporate body authorized by charter or statue to undertake specific

functions, government appointment and controlled to a varying extend, the

modern public corporation achieved and advanced from and widely approved

status in Britain between the world war (1991-1993).

The public corporation was used in the united state during the first world war

to look after public responsibilities that were of business rather than a

governmental nature and the form became widely enough employed to lead to

special legislation in the shape of the government corporation control Act of

1945 which made such corporations fully accountable to both present and

congress. The most noted of the U.S. public corporation was Tennessee Valley

Authority established in 1993. The equivalent of public enterprises in France

was establishment of public, or public institution a specialized agency set up by

the central government or local authority to undertake administrative social

services or nationalized industrial or commercial undertakings. It is also on

record that both Israel and Pakistan corporations had thirty-six corporations

by 1964(gladden; 1992: 382).

In the case of Nigeria, the origin of government enterprises or public

corporation could be traced to colonial days. The earliest example of public

enterprise emerged during the British colonial rule in form of marketing boards

in 1936, and the conversion of certain government departments into

corporation in the immediate years after the second world war, notably the

Nigerian Railway corporation and the Nigerian ports Authority. However, it

was not until the decade of decolonization (1960-60) that the emerging

nationalist led government articulated a clear role for public enterprises as

instruments for promoting national development (Ademolakun; 1983: 47). The

development role of public authority is given a boost and set out clearly in the


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countrys constitution. According to the constitution; the state shall:

(a) Control the national in such a manner as to secure the maximum welfare,

freedom and happiness of every citizen on the basic of social justice and

equality of status and opportunity.

(b) Without prejudice to its right to operate or participate in the areas of the

economy other that the state shall direct its policy towards ensuring :

(i) The promotion of a planned and balanced economic development;

(ii) That the material resources of the community are harnessed and

distributed as best as possible to serve the common good.

(iii) That the economic system is not operated in such a manner as to permit

the concentration of wealth or the means of production and exchange in the

hands of few individual or a group, and

(iv) That suitable and adequate food, reasonable national minimum wage,

old age care and pensions, and unemployment and sick benefits are provided

for all citizens.

To achieve the above economic objectives, it is obvious that the government in

the Nigeria policy must assume the role of entrepreneurs. In the earlier

chapter, we made the point that expansion of the scope of governmental

activities led to the situation in which government ministries as conceived

under certain governmental were considered inappropriate for managing some

of the new activities for which government have assumed responsibility.

Post independent governments, An Africa states have articulated economic

objectives that assign more or less critical economic roles to the state. At one

end are government like those of Algeria, guinea, Malagasy and Tanzania

where the economic role of the state is more significant than which exist in

Nigeria, and at the other end are countries like Cameroon, Kenya, Gabon and

Ivory Coast, where the economic role of the state is not as significant as the

case in Nigeria (Ademolakun; 1983: 48)

2.4 PUBLIC ENTERPRISE/GOVERNMENT ORGANIZATION

DEFINITION:

The title of public enterprise encompasses all corporations, authorities,

Boards, Councils and limited companies in which government has full or

majority interest.

Public enterprises are established by both federal and state government and

they vary widely in terms of their functions, types of organization, and nature

of operations. By 1981, the number of public enterprises established by the

federal government was put at 168 (presidential commission on parastatals,

1981). The total figure for the state may not be less than the figure of the

federal.

As bodies set up to perform certain defined functions, parastatals have existed

in Nigeria for a long time, and the basic principles governing their

management have been discussed repeatedly and extensively. There has been

general agreement on the more fundamental issues, namely, that parastatals

should be directed by Boards which should be concerned only with ensuring

the formulation and enunciation of each parastatals should be the task of the

chief executive and his staff; and lastly, that government should control the

affairs of the parastatal through the interaction of a minister with the

chairman and members of the board. However, differences of opinion on the

part of commissions and working parties as to what should constitute day to

day management have created problem resulting in the emasculation of the

authority of parastatals.

The purpose of setting up public enterprise has been stated in a number of

publications issued by government. It is well known that public enterprises are

established to discharge functions and attain objectives more easily achievable

outside the civil service structure and procedure. This statement of policy is in

consonance with the original intension of government in transforming some

government departments like the Nigeria Railway into statutory corporation.


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The country is in fact growing up and we must be prepared to change our

methods to suit the times. The Nigeria Railway of course, play a major part in

all these economic development, and the time has come when we should free it

from the close departmental controls under which it has so far operated if it is

to respond to the new demands being placed upon it.

I think I can do no better than quote from a reply to a question in the House of

Representative given by the vice president of the party which now follows the

leader of the opposition. In August 1952, late chief Bode Thomas stated that;

It is the governments view that a public utility of this kind is better operated

on quasi-commercial lines by a statutory corporation than by a government

department. The

rigidity of control and the established formalism which are proper and

necessary in the operation of a government department are not only to provide

the service required by the public but should do so on sound financial line.

That in my view sets our governments case vary clearly.

It is clear from the foregoing policy statement that public enterprises are

conceived and established as organizations that exist outside the civil service

so that they could operate with great degree of freedom and flexibility. For

reasons of Nigeria colonial heritage from Britain, our earlier type of public

enterprises operation were patterned after the British model.

2.5 ADMINISTRATION OF PUBLIC ENTERPRISES

For more understanding of the concept, public enterprises or government

owned organization, we have to know the meaning of organization as well as

government. Organization is a formal structure brought about by the

arrangement of personnel, functions and material for goal achievement.

Chester Benard described formal organization as a system of consciously

coordinated activities at two or more persons. He sees organization as group of

people working together under authority towards achieving goals that

mutually benefit

the participants and the organization. Benard (1948: 72) organization could be

viewed as a body such as a company or corporation, or it could be used to mean

method of ordinations activities.

Organizations has types and are classified into types based essentially on their

main purpose. Manager and management practices and problems vary among

the several types of private sector organizations.

2.6 ORGANIZATIONAL PROBLEMS IN NIGERIA PUBLIC ENTERPRISES

The recalls of the findings of the series of Tribunals and commissions of

Enquiry set up by government reveals degree of inefficiency, waste and down

right fraudulent practices perpetrated in public enterprises. Many of the

enterprises are not sufficiently responsive to the rapidly changing requirements

of a dynamic economy like ours. For instance the Nigeria Railway corporations

whose system is twenty years out of date lacks the rolling stock to service even

its existing system and which has become totally unreliable as a means of

transport either for passenger or goods.

Some of the problems facing public enterprises are: Problems arising from

incoherent and ambiguous defunction of objectives; inappropriate

organizational structure and procedures; political interference, out model

personnel practices, lack of delegation, deficiencies in investment planning and

accounting and budgetary systems.

Over the last three decades, public enterprises have become an increasing tool

of public intervention in the development process. Their primary purpose is to

stimulate and accelerate national economic development under conditions of

capital scarcity and structural defects in private business organization. There

are also basic considerations arising from the danger of leaving vital sectors of

the national economy to the whelms of the private sector often under the direct

and remote control of foreign large scale industrial combines. Public

enterprises are thus crucial in Nigerias Quest for true national economic

development and self-reliance.


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In the late twenties and the early part of the eighties the phrase Government

sick babies was used to describe such public enterprises as N.E.P.A. now

Power Holding Company, Nigeria Railways, Nigeria Airways, and then PXT

now part of NITEL. This derogatory phrase, no doubt was coined to describe

the inefficiency, ineffectiveness, poor performance etc that have characterized

such enterprises.

The problems are now described below:

(1) PROBLEM OF AMBIGIOUSS OBJECTIVES

Quite often the objective for which public enterprise are established creates

ambiguity. It is left with the managing boards and the management of the

enterprises to interpret the objectives in the way they will understand them

often with devastating consequences both enterprises and the national

economy as a whole.

A good case in this point is the creation of urban development authorities in

many of our state capitals to undertake responsibility within the national

jurisdiction of local government activities. It creates confusion in the minds of

the ordinary people and perpetrate jurisdictional fraction between different

arms of the same government.

(2) INAPPROPRIATE ORGANIZATIONAL STRUCTURE

The creation of new public enterprises is usually determined by the

government as a political solution to a perceived economic problem. Some

evolve from the status of a government department while others are created

from the scratch. In all cases the traditions in Nigeria is for civil servants

within the supervising ministry to transfer themselves as the founding

members of staff of the new organization, instead of permitting the board of

the enterprise to advertise, select and appoint its own staff. As a result, most

new public enterprises start off on a wrong footing.

Example is when N.E.P.A was created from the merger of Electric Corporation

of Nigeria (ECN) and Kainji Dam Authority, it was the staff of these

organizations that formed management of the new N.E.P.A. Similarly when the

NNPC was established, instead of recruiting personnel experienced in that

industry, most of the management staff were drawn from the ministry of mines

and powers whilst such persons may be technically qualified. Their lack of

experience in modern business management makes them less suitable.

This problem of inexperienced staff may have affected the Ezzamgo building

materials as well.

(3) POLITICAL INTERFERENCE

A problem common to most public enterprises in Nigeria is their use of

Employment agencies, and this is whether it is military or civilian

administration. In a civilian setting, board members are drawn from the ranks

of political parties stalwarts who were either election casualties or simply party

faithful. Even where the appointee is suitably qualified the appointment is

made in such circumstances as to leave no doubt in the minds about the

relative merits of his political acceptability and qualification. Top executives

are appointed more because of their demonstrated loyalty to a political party

rather than their qualification or experience and they in turn use their

influence to direct appointments and promotions below them to reflect their

political sensitiveness.

(4) OUTDATED PERSONNEL PRACTICE

This is a practice which contributes to over staffing. Just as much political

interference, and the nepotic actions of top executives, recruitment and

promotion in most enterprises are made on consideration other than merit and

the following evidence of a witness at a tribunal of inquiry into the operations

of the public enterprises in Nigeria is equally true and applicable to most

public enterprises in the country (Nigeria management review 1986).

Where one man has all the powers and others must necessarily be powerless

and when one man can alone confer wealth and honor, the other can only gain

it pleasing him. His pleasure, there become the only test to achieve all vigor


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and all independence of life and thought are necessarily abandoned (Nigeria

Management Review June 1986).

Other personnel problems are shortage of trained and educated people at all

levels and attitude of workers towards work in the public sector. It is the

cumulative effect of these factors that accounts for the inefficiency of our public

enterprises of which the Ezzamgbo building material is not exempted.

(5) LACK OF DELIGATION

Most management centralize all power in themselves. Many enterprises

particularly the large utility undertakings are reluctant to delegate authority

resulting in over centralization and consequent inefficiency. The size and

complexities of such entities such as the Ezzambgo building material operating

on a country-wide basis over a vast land area and in the face of inadequate

communication facilities make for remoteness between management and

others, thereby creating inefficiencies.

DEFICIENT PRE-INVESTMENT STUDIES AND WRONG LOCATION OF

INDUSRIAL PLANTS

The history of the Nigerias public enterprise is replete with cases of poor

pre-investment and feasibility studies couple with wrong decisions on the

location of industrial plants. The number of projects that have failed either

because of inadequate feasibility study or wrong location or at times both are

uncountable. In many cases the failure of an enterprise is due to lack of

competent and detailed pre-investment study. At times the only study

undertaken is that performed by an interested foreign machine pedlar whose

primary interest is to sell the equipment he has to put up such prospect for the

enterprise, which deliberately ignore some vital considerations such as

availability of raw material, market for products to be manufactured etc.

There are countless still born public-enterprise where operating equipments

have been acquired and paid for but remained stored up in crates either

because the factory-building are yet to be completed or because project was

wrongly conceived and inadequately funded. Any established project that has

no chance of viability will continue to consume resources without returns.

DEFECTIVE ACCOUNTING AND BUDGETING SYSTEM

The accounting system in Nigeria public enterprise vary in quality and

sophistication, but generally, there is a tendency towards a mixture of

government and private enterprises acting with emphasis on expenditure

control.

There is usually a complicated system of checks and counter checks which tend

to hamper the efficiency, and timeless of action. Some public enterprises have

not rendered published accounts for over five years. Top management become

involved in vast and totally unnecessary routine paper work without improving

the efficiency, financial control or accountability, resulting in financial and

business decisions being taken without facts.

The main problem is that scarce attention is paid to generating revenue, and in

some cases, the little that is collected is pilfered.

OVER-STAFFING

Over-staffing is a serious problem which public enterprise must deal with as a

matter of urgency if they are to become as cost effective as they should be.

Over-staffing has a demoralizing effect on the underemployed persons. It

breeds indolence which lowers the general tone of efficiency of an organization.

It also imposes on the organization a crippling wage bill whose size is totally

act of proportion with productivity.

The problem facing Nigerias public enterprises are endless. We have only

attempted to highlight the most obvious ones. There are for examples,

problems of widespread financial dishonesty and corruption practice with

almost total impunity by practically all levels of personnel in some

organizations. There are problems of the quality of goods and services produced

and or distributed by these entities, discourtesy and customers and general lack

of discipline.


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The basic problem of organizations especially the one under study Ezzagbo

building material, is obsolete equipment. Because the facilities have grown old

and due to the financial problem or inadequate funding of the organization

from the government being experienced by the corporation and the apparent

government insensitivity, such obsolete equipment cannot be replaced but

instead managed like that. The economic recession helped to aggravate the

problems generated by insufficient fund or capital base.

The other problem is the poor management of available resources. Opinion has

it that the management is short sighted, it lacks vision, initiative and

managerial competence to manage effectively and efficiently the affairs of the

corporation. The management lack direction, cohesion and cohesiveness to

carry the staff along. It does not set its priorities right and aggravates the

worsening state of affairs in the corporation. There is unproven

mismanagement of available resources including funds. Problems of basic

working facilities and materials which the management can easily solve with

revenue generated internally remained unsolved. Such problems include lack of

operational vehicles, replacement of minor faulty equipment, provision of

stationary for day to day administration and operation, lack of fund for vehicles

and standby generators.

Also there are no motivations and incentives to staff as it is indifferent to

making available working materials and finance needed for the execution of

routine assignments. This affect the performance of staff generally and the

quality of programmes and productions of the Ezzamgbo building material

industry.

From the management point of view, one of the problems is the

non-performance of staff in their assigned responsibility. Since the staff cannot

work to perform, it makes it absolutely difficult for management to perform.

The unwillingness of staff to co-operate with management creates more

problems and make some problems unsolved in the shortest period.

Finally, it is clear, though unfortunate, that at high levels of authority,

apparently the corporate, and even in the running of the affairs of the staff to

which the corporate belongs, there is no more objective but rather interest

serving exercise.

2.8 PROSPECTS FOR A BETTER MANAGEMENT

The myriad of problems not withstanding, with the management taking the

lead in discipline itself and taking the bull by the horn by adopting and

applying new effective management skills, strategies and methods, other than

whatever method it is now using, the corporation optimistically would regain

public confidence. Management if it reasons again, and it goes back to set its

priorities right adopt some progressive management techniques, including the

practice of management by objectives (MBO), It will achieve much using

management by objectives.

If it want to achieve excellent performance, it is logical that it should become

increasingly aware or concerned with the issue of what they could be realized.

This is more so in view of the fact that by now has become clear that annual

government financial-outlay on the corporation is limited. If it were to generate

the bulk of its funds through advertisement, the extent of patronage it receives

is bound to be dependent on the kind of services it provides to the public

Seminars and trainings have to be organized for staff to enable them

understand the concept of MBO, both staff and management would chart a

new course of path.

An effective means of controlling and monitoring deviations from the new

path would be devised for prompt identification and effective correction.

Management would then know the need to provide staff with working

materials and then motivate staff adequately by giving them incentives and

training them for optimum performance.

With adequate motivation, participative management, performance


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monitoring and supportive followship, other internal problems of the

organization would go underground and the corporation would prosper.

The achievement of workers optimum performance rests with the

management.

-not completenot complete

This article was extracted from a Project Research Work/Material Topic

MANAGING PUBLIC ENTERPRISES IN NIGERIA; ISSUES,

PROBLEMS AND PROSPECTS, A CASE STUDY OF EZAMGBO

BUILDING MATERIAL INDUSTRY ABAKALIKI.

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The Marketing Strategies of the Paint

Industry (A Case Study of Saclux Paints

Limited)

Influence of Packaging on the Consumer

Purchase Behaviour ( A Study of Paterson

Zochonis)

Problems Facing Public Enterprises in Nigeria

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15 Comments

Hammed Abeeb Olawale

Posted July 12, 2013 at 6:24 pm | Permalink

It painted a clear picture of the happenings in public sector Good work!

Reply

Babatunde Lateef ( Fadama)


It is a job well done, the writer elucidate on the problems and the way out.

Reply

articles

Posted July 14, 2013 at 6:21 am | Permalink

thanks Babatunde

Reply

yahyah abayomi


13 of 15 3/4/2015 6:54 PM


The research work gives light in public sector and lay emphasis on the way out to

solve problems facing parastatals.

Reply

fatai yusuff babatunde


This is a good research work..kudos to the researcher!

Reply

Adeleke Musbau Jare


Wonderful job.

Reply

Oyelade Japhet.


What a wonderful work, cudose to you my brother.

Reply

aminu

Posted August 13, 2013 at 5:51 am | Permalink

Is a good work,

Reply

tosin

Posted October 19, 2013 at 5:00 pm | Permalink

a nice research work

Reply

ohanagorom ify

Posted November 17, 2013 at 5:32 pm | Permalink

well detailed work. kudos to the researcher

Reply

Ayuba Dadet

Posted December 3, 2013 at 10:23 am | Permalink

good work

Reply

Rufus Thankgod

Posted June 25, 2014 at 11:16 am | Permalink

Excellent Research pls, keep it up


14 of 15 3/4/2015 6:54 PM

Reply

Mohammed Alhassan


Good job, very helpful Keep it up!

Reply

Tity

Posted December 30, 2014 at 12:07 pm | Permalink

Pls I want to know more about examples of Public enterprises in

Nigeria..Anybody???

Reply

Iloma Ukelabuchi

Posted February 15, 2015 at 10:19 am | Permalink

Very good work. I have no doubt that the writer have actually contributed to

available volumes of knowledge

Reply

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