Privatization and Enterprise Performance in Nigeria: Case Study of Some Privatized Enterprises

Afeikhena Jerome

Working Papers from 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.

Date: 2008-02-06
Note: African Economic Research Consortium
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