Public
corporations are direct creations of government. They are the direct
intervention of government in business. Many scholars have posited that
government has no business engaging in business. Many have offered serious
criticisms against government setting up huge companies with alarming amount of
corporations are direct creations of government. They are the direct
intervention of government in business. Many scholars have posited that
government has no business engaging in business. Many have offered serious
criticisms against government setting up huge companies with alarming amount of
public fund, which is never recouped over the years. Worst still many say it is drainpipe
But
we appreciate that for a developing country like Nigeria, government cannot
leave certain companies in private hands, especially those that can provide
public utilities and at cheaper rate or price to the citizens. Because of the
tested argument that although the business of government is not to create
paradise out of society for the benefit of its citizens, government is also
expected to prevent hell paradise out of society by providing society with
relevant social amenities.
we appreciate that for a developing country like Nigeria, government cannot
leave certain companies in private hands, especially those that can provide
public utilities and at cheaper rate or price to the citizens. Because of the
tested argument that although the business of government is not to create
paradise out of society for the benefit of its citizens, government is also
expected to prevent hell paradise out of society by providing society with
relevant social amenities.
Government
therefore creates public enterprises strictly for social purposes. Law – acts
of parliament, normally creates them. Public enterprises include huge
corporations like NEPA, Nigerian Airways (defunct), Nigerian Postal Service
(NIPOST), Nigeria Railway Corporation, etc. These corporations provide cheap
and affordable services and until recently on Nigeria, they were not created
for profit making. Thus public enterprises mostly exist and are run through
government yearly subventions.
therefore creates public enterprises strictly for social purposes. Law – acts
of parliament, normally creates them. Public enterprises include huge
corporations like NEPA, Nigerian Airways (defunct), Nigerian Postal Service
(NIPOST), Nigeria Railway Corporation, etc. These corporations provide cheap
and affordable services and until recently on Nigeria, they were not created
for profit making. Thus public enterprises mostly exist and are run through
government yearly subventions.
In
recent times, critics have argued that if this were so, then government must
either privatize them or make them to become profit generating via
commercialization of their operations. By this the corporations are expected to
generate such amount of money to fund their own cost of business and pay salaries
and wages of its workers. But this was frustrated through the Nigerian factor
and the Obasanjo administration have resorted to privitalization and as a
viable policy in order to put these corporations in public ownership structure, to curtail the
huge expenditure government dole out yearly to run them. But many are asking
questions: who and who are buying this corporation? Does the poor servant buy
or just privilege government official alone? Some say they are selling the
companies to themselves. These are food for thought.
recent times, critics have argued that if this were so, then government must
either privatize them or make them to become profit generating via
commercialization of their operations. By this the corporations are expected to
generate such amount of money to fund their own cost of business and pay salaries
and wages of its workers. But this was frustrated through the Nigerian factor
and the Obasanjo administration have resorted to privitalization and as a
viable policy in order to put these corporations in public ownership structure, to curtail the
huge expenditure government dole out yearly to run them. But many are asking
questions: who and who are buying this corporation? Does the poor servant buy
or just privilege government official alone? Some say they are selling the
companies to themselves. These are food for thought.
This
twin policy of government (privatization and commercialization) erase
government ownership and the private owners are expected to run it efficiently
and make profit for themselves. The thinking is that when people spend personal
fund to acquire this corporation the drain pipe and national cake syndrome will
cease. Here government will no longer appoint a Board of directors who hitherto
had powers to raise money via borrowing from commercial banks and hence run
government into huge debts.
twin policy of government (privatization and commercialization) erase
government ownership and the private owners are expected to run it efficiently
and make profit for themselves. The thinking is that when people spend personal
fund to acquire this corporation the drain pipe and national cake syndrome will
cease. Here government will no longer appoint a Board of directors who hitherto
had powers to raise money via borrowing from commercial banks and hence run
government into huge debts.
Advantages
of public corporation
of public corporation
·
they provide socially necessary facilities such as education,
sanitation, electricity, water etc which may be too expensive if solely left in
the hands of private businessmen
they provide socially necessary facilities such as education,
sanitation, electricity, water etc which may be too expensive if solely left in
the hands of private businessmen
·
the government sees it as subsidy that should be enjoyed by the people
i.e it is part of government social responsibility to its citizens
the government sees it as subsidy that should be enjoyed by the people
i.e it is part of government social responsibility to its citizens
·
public corporation can rise a large sum of money to provide services,
which cannot be possible by private business organization
public corporation can rise a large sum of money to provide services,
which cannot be possible by private business organization
Disadvantages
of public corporation
of public corporation
·
these organizations are always inefficient because they are regarded as
nobody’s business
these organizations are always inefficient because they are regarded as
nobody’s business
·
public corporation are always regarded as a place where national cake is
shared and as such the operators always encourage waste and corrupt practices
public corporation are always regarded as a place where national cake is
shared and as such the operators always encourage waste and corrupt practices
·
directors of public corporations are not always appointed because of
their business acumen or skill as technocrats, but because of their loyalty to
government power
directors of public corporations are not always appointed because of
their business acumen or skill as technocrats, but because of their loyalty to
government power
·
There is no clear cut performance standard in corporations as you have
in pure private organizations where competition and survival is the name of the
game.
There is no clear cut performance standard in corporations as you have
in pure private organizations where competition and survival is the name of the
game.
