The history of Privatization is traceable to the ancient Greece, when Government contracted out almost everything to the private sector and in the Roman Republic when private individuals and companies performed the majority of services including tax collection [Tax farming], army supplies [military contractors], religious sacrifice and construction. As an ideology, perhaps Privatization is traceable to the golden age of the Han dynasty in china.

 Taoism came into prominence for the first time at a state level and it advocated the laissez faire principles of wu wei. Even during the renaissance when most of the Europeans practiced feudalism, the ming dynasty of China began once more to practice Privatization especially with regard to their manufacturing industries. In more recent times, Winston Churchill’s Government privatized the British steel industry in the 1950s,   Western Germany’s Government embarked on large-scale Privatization, including selling its majority stake in Volkswagen to small investors in a public share offering in 1961 and in 1970s. 

General Pinochet implemented a significant Privatization program in Chile. However it was in the 1980s under the leadership of Margaret Thatcher in the UK and Ronald Reagan in the USA that Privatization gained worldwide momentum[1] similar exercises were carried out in Eastern Europe and the former Soviet Union with the assistance from the World Bank and the UK agency for international development; while Japan privatized Japan post. There were Privatization in France, Belgium, Denmark, Italy, Spain, Peru, etc. in other words, Privatization transactions took place in developing and transition countries as well as in industrialized countries. The history of Public Corporations in Nigeria dates back to the colonial era. 

The colonial Government established some Public Enterprises to provide essential services like railways, roads, bridges, electricity, ports and harbors, waterworks and telecommunication. Social services like education and health were still substantially left in the related hands of the Christian mission. However the report of the presidential commission on parastatals [onosode commission] which was set up in 1981 under the sheshu shagari administration recommended that there should be an increased role for the private sector especially in the parastatals, where security and other sensitive aspects of public policy are not as paramount as the satisfactory delivery of service to the people. 

Similarly the International Monetary Fund [IMF], in considering the request by the Federal government for a loan under shagari’s administration imposed certain conditionalities. One of them was the divestiture of ownership, management and control of some Public Enterprises. The debate of whether Nigeria should embark on Privatization resonated throughout the regime of Buhari/Idiagbon until General Babangida in his 1986 budget speech announced Government’s intention to divest its holdings in certain key sectors of the economy and subsequently promulgated the Privatization and Commercialization Act No. 25 of 1988[2].

Four reasons have been offered for the growth of Public Enterprises in the immediate post colonial period[3]. The first reason has to do with the desire of the national petit-bourgeoisie which inherited political power from the colonial masters to create an economic base for its political power. Being essentially capitalists without capital, the petit-bourgeoisie used the instrumentality of the state to empower themselves economically. Public Corporation serves as a conduit through which public funds were channeled to private pockets. The second reason has to do with the struggle by Nigerians for the control of the economy as well as the struggle for economic independence. Nigerian politicians felt that they have to build up Enterprises that can compete with the foreign ones. Thirdly, some Public Enterprises were established as a means of promoting exports and to realize import substitution. Finally, some of the state Enterprises came into being as a result of nationalization of foreign owned Private Enterprises.

[1] amupitan J private placement method of privatization in Nigeria, in new vista in law, vol2, 2002 pp 343-356
[2] Federal Republic of Nigeria, report of the presidential commission on parastatals, Lagos, Federal Government press, 1981, P.63.
[3] Ake [1981]
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