Types Of Public Enterprises In Nigeria (2024)

Public corporations are establishments and enterprises that are government owned and run that came into being through acts of parliament or statutes, decrees or edicts to provide essential social and welfare services to the citizens of the country.

Before going into the Types Of Public Enterprises In Nigeria, its good to know that Public enterprises came into being due to the expansion of the scope of public administration. 

TYPES OF PUBLIC ENTERPRISES IN NIGERIA

The concept of the welfare state which was birthed after the World war and the increase in the number of developmental initiatives taken by Governments all over the world resulted in the development of public enterprises. The government assumes the role of a business owner, selling goods and services to common folks through the means of a state-owned enterprise system which encompasses characteristics of both public and private enterprises.

The government operates in areas that are of basic and strategic importance. The government also takes charge in areas that require huge investments that are beyond the reach of private enterprises. Examples of private enterprises in Nigeria are the Nigerian Ports Authority (NPA), Nigerian Railway Corporation (NRC), Power Holding Company of Nigeria (PHCN), State water corporations and so on.

Public enterprises in Nigeria can be broadly grouped into two types;

• Public enterprises proving essential services
• Public enterprises that are of commercial nature

Public Enterprises Providing Essential Services

These are government owned institutions that provide basic and essential services. They operate a system that is not majorly motivated by profit. They aim to provide essential services to citizens of the country irrespective of their status in the country. Examples of such enterprises in Nigeria are;

Water corporations that are established and controlled by state governments, Power Holding Company of Nigeria, Federal Housing Authority, Nigerian Ports Authority and so many others. Some of these enterprises are discussed below.

• Power Holding Company Of Nigeria (PHCN)

The Power Holding Company of Nigeria (PHCN), was formerly known as the National Electric Power Authority (NEPA). This company governs the use of electricity in Nigeria. PHCN came into being as a result of reforms aimed at improving power distribution and supply in the country. Even though the aspect of power distribution has been handed over to private owners through the Bureau of Public Enterprises which is the privatization arm of the government, the government is still the major player in the use of electricity in Nigeria.

• Nigerian Ports Authority (NPA)

Nigerian Ports Authority (NPA) is the agency of the federal government that is charged with the responsibility of governing and operating Nigerian ports. Some of the major ports controlled by the NPA include; the Lagos Port Complex and Tin Can Island Port both of which are in Lagos, Calabash, Delta and Rivers ports as well as the One port.  NPA carries out its operations in conjunction with the Transport Ministry and the Nigerian Shippers’ Council.

Public Enterprises That Are Of Commercial Nature

These sort of public enterprises are of commercial nature. They are more profit-minded than the essential services type. Examples are government-owned textile mills, transport services agencies, hotels, and banks. The government may establish these enterprises if it feels the need to do so. (Example:)

• Nigerian Railway Corporation (NRC)

This corporation is charged with the sole responsibility of railway administration and control in the country. It is responsible for the purchase and maintenance of trains and railway tracks. It controls the entire railway system.

Purposes And Functions Of Public Enterprises In Nigeria

• The main aim of establishing public corporations is the provision of essential services to citizens at a reduced price. These sort of services usually involve a lot of capital to set up but they are usually subsidized by the government so as to knock down the price.
• They provide employment opportunities for a lot of citizens of the country.
• They are established to prevent discrimination against any section of citizens of the country and also prevent the exploitation of citizens of the country in the provision of basic needs like potable water and electricity which would have been the case if private individuals handle such services.
• Government through public enterprises prevent the concentration of huge amount of money in the hands of few citizens.
• Public enterprises generate funds for the government through the services they provide for citizens.
• They undertake strategic projects for security reasons and national interest. This is why the government mints currencies, control telecommunication facilities and control ports.
• They are used as machinery for providing rapid socio-economic development of the country.

Characteristics Of Public Corporations In Nigeria

• They are state-owned and established through acts of parliament, decrees or government edicts that state their powers, functions, and structures.
• They are legal entities that can exist on their own, they can sue and can be sued, own properties and enter into contractual arrangements.
• They are often administered by a board of directors responsible for making policies and control. The members of the board are usually appointed by the minister whose ministry supervises the enterprise.
• They are independently financed through revenue that they generate from the service they render to citizens and loans that they obtain for economic ventures. They get subventions from the government to help them carry out their functions as well.
• Their employees are not civil servants but they are directly employed and work according to the dictates and service conditions of the enterprise they work for.
• They are usually not subject to financial scrutiny like other government departments.
• Though they are usually not profit-making, public enterprises have a duty to generate funds for the maintenance of their services.
• They are not characterized by bureaucracy as it exists in the government civil service. They are known for policy flexibility, quick decision making and fast implementation of policies to enable them to achieve their set objectives.

Structure and Organization of Public Corporations In Nigeria

• The government is in charge of policymaking machinery of each establishment through the minister of the supervising ministry.
• The board of directors is appointed by the government through the supervising minister.
• The board of directors controls the enterprise and run it in line with government objectives.
• The minister does not take part in the daily administration of the enterprise but he is the link between the government and the corporation.
• The board of directors has the power to recruit and dismiss their staffs and also determine the conditions of service of their employees subject to government approval.
• The head of management of a public enterprise in Nigeria is usually the chief executive also called the managing director or the general manager. He is assisted by other staffs.
• The chief executive and his assistants translate policy objectives of the board of directors into actions to help attain government goals.
• These enterprises are usually divided into several departments, with supportive managers who coordinate the implementation of board policies by subordinate staffs.

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Conclusion

Public enterprises are set up to assist the government in ensuring that the welfare of its citizens is well catered for. This they achieve by providing essential services such as water and power supply, telecommunications and ports that if left in the hands of private entities may generate issues capable of destabilizing the country.

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