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
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The administrative head is the Permanent
Secretary
|
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4.
They provide essential services
|
They formulate and implement policies
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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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