Public enterprise reform in Nigeria: Evidence from the telecommunications industry

Afeikhena Jerome

Working Papers from African Economic Research Consortium

Abstract: This study examines the qualitative and quantitative evidence relating to allocative and productive efficiency in the publicly owned Nigerian Telecommunications Limited (NITEL) in the wake of its commercialization and the deregulation in 1992. Estimates of changes in internal efficiency using total factor productivity analysis suggest a substantial improvement in efficiency as a result of the regime shift. Furthermore, the reform undertaken resulted in increased profitability, network expansion and modernization of telecommunications services. However, the momentum generated by reform has proved impossible to sustain. The industry is still characterized by under-investment and large unmet demand. The study recommends greater private sector participation in the delivery of telecommunications services in Nigeria, the introduction of competition in the sector, and the strengthening of ongoing reform efforts to embrace full privatization of NITEL with a view to overcoming protracted constraints on telecommunications performance and growth.

Date: 2002-03-28
Note: African Economic Research Consortium
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