Privatization is the systemmatic and programmed withdrawer of government from those business activities which private person of companies could much effectively.
The government within the context of Structural Adjustment Programe decided that it would take step to take itself away from involvement in enterprises in which it has interest. Such investment has to make them more self sustaining and independent of continue government sustenance.
Therefore, privatization is process by which the size of an inefficient and ineffective public sector is reducing by transferring some of its function to a relatively more efficient private sector.
Privatization also mean the relinquishing of part of all of the equity and other interest by the federal military government.
Bureaucratic and monolithic structure of government argued by many analyst that the performance of public cooperation is quit so poor relatively to the investment with them.
The general problem that have been attributed to this are:
a. It offer scope for political interference and nepotism, budget which reduces the likelihood of independent financial control.
b. Problem of inefficiency is the order that is the public enterprises failed to achieved efficiency, because they little encouragement to their workers who in turn respond poorly to customer demand, quality, quantity and other characteristics of good and services provided by the enterprises.
1.1 BACKGROUND HISTORY OF PRIVATIZATION
The word privatization entered popularly usage only recently and the activities with which privatization has become most closely associated the, the sales of public sector asset is a distinct of the 1980’s.
The growing appears of privatization especially in industrialized countries can in part be trace back to economic development of the mid 1970s. Rapid public sector expression in the 1960’s and early 1970s at that time was seen as major contribute not only economic growth but also to social and political stability.
In addition, substantial social benefit were expected to drive from the cleation of public enterprises. In many developing countries, public production as viewed as essential given the under developed nature of resources and market. However, the situation change drastically in the mid 1970s, when the inability of economic to adjust to external prices, in particular the first round of price increases by the organization of petroleum exporting countries led to a market determination in macro economic performance.
Subsequent recovery was slow, and part of the blame was leveled at large public sectors. Sector activities began to be seriously questioned in the industrialization countries.
Today, the developing countries as well where loss making public enterprises have been a drain on government resources. Strongly enough, numerous efforts have been made successive Nigeria government to diagnose the ills afflicting public enterprises and find remedies for them. A lot of recommendations were actually implemented but they seems to have had little positive impact on the performance of the organization.