Problems Facing Public Enterprises in Nigeria

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Problems Facing Public Enterprises in

Nigeria
By ARTICLES | Published: MAY 20, 2013
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Problems Facing Public Enterprises in Nigeria
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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.
Accounting
Agriculture
Banking and Finance
Business Administration
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
Mass Comm
Philosophy
Piblic Administration
Political
Economics
Economy
Education
Estate Management
Health
Law
Management
Marketing
Political Science
Purchasing and Supply
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corporations include Nigeria Railway Corporation (1955), National Electric

Powered
WordPress.(1952),
Built on the
ThematicProduce
Theme Framework.
Power by
Authority
Nigerian
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.
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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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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
3/4/2015 6:54 PM
14 of 15
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
3/4/2015 6:54 PM
15 of 15
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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