FINANCING OF GOVERNMENT PARASTATALS

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1.0 INTRODUCTION

1.1 BACKGROUND

INFORMATION

It is an acknowledged fact that in a developing economy, government is always seen as the prime mover of the economy and this situation will remain so far a very long time to come in developing countries. According to Jaivaharial Wehru of India, the trend of events is to make the state more and more the organizer of constructive industry and not the private capitalist or any other person. The services provided by public utilities are essential for economic growth and development. It is obvious that no government can progress very fast without the requisite “social overhead” so called by economic growth theorists. Basically, the three types of social overhead capital necessary for economic growth which are of great interest to this writer are: (a) Eective transportation (b) Flexible and reliable power source Good communication These three types of social over head capital are necessary conditions for economic growth the type of economic system not withstanding. Utility services are just as important in socialist system as in capitalist state. They are mandatory for a developed nation, under developed nation or emerging or developing nation and equally essential for a geographical region, state or city. The third factor which is mandatory for economic growth and development is the flexible and power source. Every economic production depends solely on reliable power and unless this is available, it is impossible to plan and execute production and marketing process. It is also important for the power sources to be flexible. It is only possible to change the production process in response to market forces when energy can be added to or subtracted from as needed and flexibility of power may also be used in free production from a fixed location.

Flexibility makes it possible for market demand to utilize competing sources of supply and to be from location factors. Without flexibility, mass production of products in factories would not be possible and there would be no need for dichotomy between industrial and non-industrial countries of the world. Without electricity man would be in darkness total darkness, incontinent darkness. It therefore goes without saying that in every country, there is a body charged with the responsibility of generating and distributing energy electricity. In Nigeria, the body charged with the sole responsibility of generating and supplying or distributing electricity to the consumers is the National Electric Power Authority (NEPA). NEPA has in recent times meant so many things to different people in Nigeria. To some it connotes all elements of negativism while to others at connotes a stinking some that requires urgent surgical operation to enable it survive. With all these negative attributes to NEPA, whose fault is it? Is it NEPA’s fault or that of society? Or could there be something latent about NEPA’s incessant failures that earned it the name “Never Expect Power Always”? These are questions that cry for answer and unless their answers are provided, this research work may not be complete.

1.2 STATEMENT OF THE PROBLEM

Many factors contribute to the problems militating against government parastatals one of the major factors militating against government parastatals is mismanagement of subventions from government by the managers of such government parastatals. Most of the managers in government parastatal are employed or appointed based purely on political consideration and on potential and capability. For instance a person that has no knowledge of management might be appointed to manage government parastatal because of political alignment and what do you expect him to do, non performance and abysmal failure. Another factor is that attitude of government officials towards government work. Some government officials in the parastatals see government work as an opportunity to cut the national cake and thereby fraudulently enrich themselves to the detriment of the parastatals. Again, the rigidity of the policies of government parastatals reduces their level of efficiency and effectiveness and creates room for bureaucracy, nepotism, bribery and corruption among the workers of government parastatals. The above factors no doubt lead to problem of inefficiency in the management of government parastatals.

FINANCING OF GOVERNMENT PARASTATALS