An examination of privatization policy and foreign direct investments in Nigeria

Abstract

The Federal Government establishment of and subsequent growth of state-owned enterprises (SOEs) in
compliance with the Keynesian theoretical paradigm, was for over two decades a fundamental
component of development strategy in Nigeria. The SOEs were needed to provide social services and
utilities and serve as engine of social and economic development. However, they served the purpose
for which they were established for about a decade, and then their performance declined. The
government of Nigeria then opted for privatization policy as a result of inefficiency and ineffectiveness
of the SOEs. Privatization policy is a global principle and guideline that de invest public ownership of
SOEs and given rise to private ownership. The aim of this paper therefore, is to investigate the socio
economic and legal implications of the Nigeria Privatisation Policy. The methodology employed in this
paper is to review the existing literature on SOEs and privatization policy in Nigeria and beef it up with
empirical investigation of 50 consumers of the product of the SOEs in energy sector. The result from
the review of literature and empirical study revealed that privatization policy will enhance foreign direct
investment in Nigeria subject to positive economic and technological milieu in the country. The findings
also revealed that the grassroot (the poor) are likely to suffer as they will no longer enjoy subsidized
products and services of the SOEs slated for privatization while conversely it will further enhance
socio-economic condition/hegemony of the bourgeoisie. Finally, the legal review revealed that the
privatized SOEs will undergo legal and structural transformations.