PUBLIC CORPORATIONS

SS2 GOVERNMENT
1st Term

PUBLIC CORPORATIONS
A public corporation is defined as government establishment or enterprise set up by an Act of parliament to provide essential services. E.g. Water Corporation, Federal Radio Corporation of Nigeria, Nigerian Railway Corporation, Nigeria Ports Authority, National Electric Power Authority etc.
Characteristics of Public Corporation
(1)It is owned by government (2) financed with taxpayers money (3) controlled by a board of directors (4)established by an act of parliament (5) it is a legal entity
Reasons for the setting up of public corporations
(1) To provide essential services, (2)To prevent exploitation, (3) It requires huge capital which private individuals can hardly provide (4) To provide employment, (5) To raise the people’s standard of living, (6) to reap economies of scale which results from large scale production, (7) To undertake some strategic project for security reasons (8) To ensure efficient management and proper control (9) To prevent foreign control of the economy (10) To generate revenue
Function
1. To manage resources 2. To provide essential services 3. To create employment  4. To generate revenue 5. To promote economic development
Organizational structure
Political head >the chairman >the board of directors >the managing director >the key senior officials
Difference between public corporations and civil service
public corporations
civil service
1.       Its workers are called public servants
Its workers are called civil servants
2.       The political head is the Chairman
The political head is the Minister
3.       The administrative head is the General Manager
The administrative head is the Permanent Secretary
4.       They provide essential services
They formulate and implement policies
Control of public corporation
1.       Legislative control
(a.) By act of parliament: The legislature makes sure that the public corporation operates within the ambit of the Act that establishes it. (b.) Auditing: the accounts of the public corporation are always audited by a committee set up by the legislature. (c.) Summoning of Officials: the legislature can ask an alleged corrupt official to appear before it for questioning.  (d.) Abolishment: the legislature can abolish the public corporation if it is confirmed deficient and unproductive
2.       Judicial control
Ø  By court order: the court can declare the wrong action of a public corporation illegal
3.       Executive control
(a.) By appointment or dismissal of senior officers (b.) By Dissolution of board of directors (c.) By auditing (c.) By Issuing directives (d.) Finance: by refusing to finance a project, the executive controls the kinds of projects they embark on. (e.) By annual report
Problems or Setbacks to Public Corporation
(1.) Insufficient funds (2) Bureaucracy (3) lackadaisical attitude towards work (4) political interference (5)Tribalism
Commercialization
This is government’s policy of making its enterprises and parastatals to become profit oriented. The reasons for commercialization include: (1) To make the enterprise more efficient (2) To extinguish irrelevant enterprises. (3) To generate revenue for the government. (4) to create avenue for individual participation in the economy
Privatization
Privatization is a policy of the government created to afford individuals and corporate bodies the opportunity to take over ownership and control of government enterprises. The following are the reasons for privatization: (1) To bring about efficient management (2) To encourage individual participation in public welfare. (3) To boost government revenue through tax (4) To give customers the freedom of choice (5) To realized industrial autonomy (6) To revive unproductive industries
Deregulation of public corporations
Deregulation is the process of removing state regulations. It is therefore the opposite of regulation which refers to the situation whereby the industry operates under the control of the government. Under regulation, the government fixes prices and quantity supply. But when an industry is deregulated, the government allows prices to pander to market forces. Deregulation is preferred because (1) it gives room to competition (2) it makes each party to the transaction justly rewarded by equilibrium quantity and price (3) it allows innovations which could have been blocked by stringent regulations.
However, Deregulation is opposed because it may result to: (1) exploitation (2) Wastage of resources (3) Unhealthy competition (4)Unemployment (5) Poor standard of living

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