Privatization and Enterprise Performance in Nigeria: Case Study of Some Privatized Enterprises
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Date
2008-02-06
Authors
Jerome, Afeikhena
Journal Title
Journal ISSN
Volume Title
Publisher
African Economic Research consortium
Abstract
Despite an impressive level of privatization activity across Africa and the upsurge in
research on the operating performance of privatized firms in both developed and
developing economies, our empirical knowledge of the privatization programme in Africa
is limited. This study appraises the post-privatization performance of some privatized
enterprises in Nigeria. The specific indicators examined are profitability, productive
efficiency, employment, capital investment, output, prices and taxes. The study measures
the change in any given indicator of performance by comparing its average value five
years before and five years after privatization. Data envelopment analysis (DEA) is also
deployed to assess changes in the level of technical efficiency in the selected enterprises.
The results, albeit mixed, show significant increases in these indicators. Privatization is
also associated with increase in technical efficiency in the affected enterprises. Reduction
of politically motivated resource allocation has unquestionably been the principal benefit
of privatization in Nigeria.