Economic reform simply means deliberate government policies aimed at improving national economic performance.
Economic reform also means economic restructuring by government aimed at increasing private participation in the provision of services for increased productivity, efficiency, viability and sustainability of public institutions.
Privatization is the process of transferring a government-owned economic enterprise from government ownership to private ownership and control. It is a condition in which all parastatals owned by the government are sold to private individuals to run on purely commercial basis e.g. the sale of NITEL, NICON-NOGA Hotel, Benue Cement Company e.t.c.
Commercialization is the process of applying private sector business principles to a public enterprise to make it run profitably. It is a situation whereby government enterprises are reorganised in such a way that such enterprises operate as a profit making commercial ventures; like private-owned business ventures. A commercial enterprise set its own condition of service and it does no longer depend on government subsidies.
Deregulation has to do with withdrawal of government Monopoly in operation and management of a whole sector of the economy of a nation. That is removal of restrictions in control of certain businesses formerly controlled by the government alone and allowing private individuals to come in and take part in the sector.
Advantages of Privatization, Commercialization and Deregulation
Privatisation, commercialization and deregulation help to provide revenue for other social sectors like education, health, housing, agriculture, transportation and so on.
They help to revitalize some non-productive public enterprises, thus enhancing job creation and profitability.
They help to strengthen the private sector which runs the economy.
They help to mobilize investment by the public through releasing shareholdings to individuals and groups.
They help to reduce corruption and parasitic disposition to government.
They help to reduce the debt burden of fiscal deficits and bureaucracy.
They also help to resolve massive and perennial pension funding gaps.
They broaden the ownership base and create popular capitalism.
They attract foreign investments and capital flight back to Nigeria.
They help to open the economy for competition rather than Monopoly.
Problems Associated with Privatization, Commercialization and Deregulation
There is the feeling that the entire exercise is for the rich and those in power.
There is also the fear that government interference will still be there since they are still retaining 49% of the stock until the enterprises become profit yielding.
There is also the problem of apathy as people feel the enterprises can never function efficiently again. Failure of people and groups to organise themselves into cooperative societies so that they can jointly invest in the privatization of the enterprises.
Poverty makes it difficult for some people to buy shares of the affected public enterprises.
Solutions to these problems.
There should be increased public awareness campaigns.
Banks and other credit institutions should give loans to people to purchase shares without collaterals.
Workers, private businessmen, social and religious groups should be encouraged to organise themselves into cooperative societies to buy stocks in privatized enterprises.
All legal documents concerning the privatization of public enterprises should be made public.