University of Nigeria Research Publications

MBANUGO, Ugochi Stella

PG/ PGD/M.Sc/02/32664

Title

Impact of Privatization on the Nigerian Economy: A Case Study of NITEL NSukka Town (1999-2003

Facu

lty

Social Sciences

Dep

artm

ent

Political Science

Dat

e

November, 2005

Sign

atur

e

TITLE PAGE

IMPACT OF PRIVATIZATION ON THE NIGERIAN ECONOMY: A CASE STUDY OF NITEL NSUKIL4 TOWN

(1999 - 2003)

MBANUGO, UGOCHI STELLA PG/PGD/02/32664

SUPERVISOR

DR OGBAN OGBAN-IYAM DEPARTMENT OF POLITICAL SCIENCE

UNIVERSITY OF NIGERIA NSUICKA

IMPACT O F PRIVATIZATION O N T H E N&ERIAN E.CQNO3W: A CASE STUDY OF NITEL NSUICICA TOWN

(1999 - 2003)

AIIBANUGO, UGOCHI STELLA PG/PGD/i)2/32664

TB PARTIAL FULFULMENT OF THE REQUIREMENTS FOR THE AWARD O F POSTGRADUATE DIPLOMA IN

lNTERN.4TIONAL RELATIONS IN T H E DEPARTMENT OF POI_.ITICAI, SCIENCE, UNIVERSITY O F NIGERIA,

NSUKIU.

APPROVAL PAGE

Thrs long essay has been approved for the Department or PoIiticaE Sciencej

University of Nizcria, Nsukka.

I G$L+&~B;o Dr. ~ . ~ h i s i s i Asobie 04$ k\v6 Head of Department

Internal Examiner

D e a d Faculty of Social Science

CERTTFTC ATTON

1. hdhmugo, LIyochi SlelIa. a postgraduate student in Department of Political Science of

I!ni\msi~y of Nigeria, Nsukka with regis[ration Number PG/PCiTl/02/32664 has

sn~ishctorily completed the requirement for 'the course and satisfactory work Tw the

award of pastgraduate diploma in Intcrnationai Relation. .

l h c \ \ a r k e m h d i c d in this prqjcc[ repor1 is original and has not b e t > suhmi~ted in

part or in full ibr any diploma or degrec of this or any other university.

. -------------------------------------- Mbanugo, Ugochi Stella

ACTWOWLEDGEMENT

First and for-=most, I acknowledge the ever presence of God Almighty

for x e i n _ ~ me Ikrcl~~gIi.

My pro fo~~nd appreciation and thanks go to Mr. Kenneth Orji, Miss

Ulo~na Ektlkwe anti Dr. Aloysius IM. N. Okolie n41o contributed in one way

or the othcr towards my ~cacfanic success,

M y heartfelt thanks 10 my big brother, Engineer Obima M b a n i ~ g ~ and

Chinma Mbanugo for their support and care.

TABLE OF CONTENTS

Title Page , . I

Approval Page . 11 . . Certification . ... '. 111

Dedication . . iv

m

Table of Contents . .vi

CHAPTER 1

1.1 mTRODUCTION .

1.2 Statement of Problem

1.3 Objective of Study

1.4 Significance of Study

1.5 Literah~re Review

1 .(3 Theoretical Framework .

1.7 Hypothesis .

1.8 Method of Data Collection .

1.9 Method of Data Analysis

CHAPTER 2

2.0 THE NIGERIAN STATE, BOURGEOISIE AND

PRI\'ATIZATION . . l l

2.1 The Nature of the Nigerian State . . 1 1

2.2 Class Relations and Privatization in Nigeria . . 12

2.3 The Character of the Dominant Class in Nigeria and

Economic Policies . . 13

2.4 The Do~ninant Class and Privatization in Nigeria 14

vii

CHAPTER 3

3.0 PRIVATISATION AND NITEL EFFICIENCY. . 16

3.1 The Meaning and Argument for Privatization in Nigeria , 16

3.2 The Efficiency OFNITEL in the Conmunication Industry . . 18

3.3 The Dynamics of NITEL's Privatization . . 2 0

3.4 The Commercialized NITEL: An Assessment of Its Efficiency . 2 1

CHAPTER 4

4.1 DATA PRESENTATION AND ANALYSIS ON CUSTOMER'S SATISAFACTION . . 2 4

4.2 The Problems Facing NITEL Nsultltn . . 2 8

4.3 Summary and Conclusion . . 2 9

4.4 Recommendations . - 3 1

BIBLIOGRAPHY . . 3 2

CHAPTER I

1.1 1 STRODUCTIOK

Privatization as an economic rcfornt policy w a s introduced i n Nigeria in the late

1W1)s. 11 is a policy h a t was aimed at altering the character of Nigerian economy and

impruving the elTecrixwms of establislirncnts. Prior to this policy, Nigeria co~ild be said

10 bc practicing what is often called a mixed economy. 8'11e economy was neither a totally

cnpitdist econorny, v;Iieirc the market forces of deinand and' supply are the sole

detcmiinants nf cfficicrlt allocation of resources nor a pure comnland economy wherein

the giwernmrnt and its agencies are rtqonsihle for planning, production and distribution

of goods and scruices. Thus, thcre is both puhlic and private sector operations within the

ccononv..

The private sector is that part of the tcnnoInp i:nder the ownership and con~rol of

individnals and non-govurnmentnl agencies. On the other hand, the public sector refers to

!Ili>s~ economic activities being on:ncd and contro~led by thc governnm-it and its

,~gc.ncics They arc popularly callccl public co~prar ions or enterprises, which were

i:srr~l.lisl~ccl t h r c ~ g h thc Act of Parliament. These enterprises include amon3 oihcrs,

Y i p i a Y\ln~ional Petrole~m Corporation (NNPC), Nipcria Coal Corporation (NCC),

Nippi-ia ~c~ecornrnunicotibn Lirnitcd (NITEL), National Electric Power Authority

(NFPAI xnd thc Nipcri~ Pods Authority (NPA). Others include investments in such areas

ss energy, communications HIKI p ~ ~ b l i c ~~tilitics.

Thcse public. cnlcrpriscs, as a 1rcsu11 of so many factors, ranging from the non-

crdonisl and ckpcndent state of [lie cconom,: and its consequences such as corn~ption.

misn1m3gernent, political inter-fcrencc and n~nl-adininistration have been unproductive,

it~effi&n[ and incffcctivc over the years. Thus, they bccame a drain-pipe for public funds

n aid n problem (or gotcr~~nlcnt. The populace jettison their services Tor alternative

p'.i\.ati: ~ ~ t ; l b l i ~ l ~ ~ n c n ~ s \vhere such exists. In search of n solution, Nigeria adopled the

1:d I- \\:orld Bank pill of privatization.

Thus, in 1958. h e privatiralion and commercialization. of public enterprises

Ilecree No 25 was promulgated. Consequen~ly, a Technical Cotnrnit~ee on Privatization

nnct C.'crmmerr.inli~ation (-I'CPC} k c a d d by /3r Hamza Zayyad was formed to prii~atizz

scme of its investrnentr and terminate its s r i p p t v a si~bsidy Ibr othurs. I-Iowtrevc~-, the

I

p ~ i l i t i c ~ of this agenda led Lo the failure o r NITEL's privatization and orc,hestratccl its

ci!1?imet-cic21izillion. The Nigerian Conmunication Commission ai!criond the

Tcl~ur~rnrn~~nict~~ion Industry or rhu Spectrum Licenres in 2001. This p v e d fhc w a y for.

iniprwed private participation in the Telccorn~nunication Industry. TTlc nigital Mobile

Opr'ratms, Rcgional F i x 4 \Virel~.ss Access (FIVA) Operators, Long Disrance Operators

an11 ;i second National Operators were licer~scd.

According 10 h'rl~rkwe (2003), private investments gew from about SS(J nill lion in

1990 t o 52.1 billion in 2002 and $4 billion in 2003. Universal Accas and wider

pctiiitl.stion of l'clecornn~unication services increased with 4.1 million l i n a (1,200,000

I?sd 2nd 2,90r3.000 Mobile) installed as at 2003. The usc of phone now cut across social

~:lassm such as clerks, artisans, lasi drivers, students, bureaucrats, politicians,

busincssrr~en and peoy!~ of all profe'essior~s. The extent to which these deveiopmcn~s h a w

;~f t ; IcmJ the operatinnal efficiency of NITEL. and customers satishction particularly

\\.illiin N s u k h environ is the focus of investiylion in this research,

1,2 ST.-tT'E3IEFiT OF PRORLEXI

?4[TI_'T4 has uxpcrienced series of changes over the years through v a r i ~ u s

s[rali:gics : .h t were meant "io encourage the ii;iection of capi~arl n d improve labour skill

Ibr clfectix*e cornpetition. Over 70% of its nctwork has bccn digiralizcd, 8O&oI)B 1int.s

cmnmissioned wirh an introduction OCZ"' Carrier Services arid 57 billion investnien~. Ru t

:I< Ekpo (200 1 : 5 ) noted, in a popularion oFovcr 120 million pbpkc. , N-ITEL dws not have

51.~0.17l1i1 paying customers. Even with rhe introd~ctiorr of the Mobile Cornmunication

St:n-icc5, pmple are aptinp for other networks, while majority of rhore wlm have MTEL

lines are sulxcribing to d l c r notworks either as an altclnative, though. some srill make

wit. ol'N1TE.L sen;ices alone.

TlwrcCore, it i s rhe LargcI of this research to find answers to the fol toi i~in~ questions:

I - Has the pri~~nlirationtcomrnercialization of NITEL improved its efficiency

in Nsukkn Town?

- Idas pri~~atiza~io~llcommerci~liz~~tion of NITEL increased cimurner

satishction in Nsukka Town?

1.2 05.lECTIVES OF THE STUDY

I1 is 11w prin~nry aim of the work to investigak and find out w h e h x thc

privarizatinn of NITEI, has increased both:

the efficiency of NITEL Nsukka and

consmer's satisfaction in Ksukka.

1.4 SIGNlFICAivCE OF THE STLDY

The imporlance of this \wrk is at two Icvels namely: Theoretical and Practical. Its .. si~nificance lies in its u s e f i ~ l n t x boll1 IO the xarlmic world and policy makers 01-

'I'henl-cticallv, tlie work shall complement misting findingsi~vorks or ~heorics on

the impact of pr ivat i7;~~ion on production proccssw and consumers satisfaction. ]Bus, the

work shal l s e iw as :I reference marcria1 or data provider to sesearclms, scholal-s and r

S ~ L ~ E I I I S in rhe tTeld. I t shalI advame the fron1icr.s of inverttigations and debate on the real

inipacr of priw~iration on production processes and service delivery,

P r i l its inquiry and analysis of [he policy ui'

and jn~plenientation. Speciiically, thc rcc;ommerrdations shall provide altcn~arivc

, . fsan~eu.orks for policy fonnulntion while our analysis shall serve as an appraisal of such II

gut ~ ~ T I I T I L : I ~ polic)..

I .5 L I T E R ~ ~ - ~ : R E nwr EW

Thc privatization~commercialization policy is such a lxr~vafirl policy that has

af l 'c~ted I ~ I C lives and activities of all classes and sccrions of the society. [I is a high Icvcl

pulilics of class consolidation? change and struggle. Thus, i t has attncl-cd dcbatcs.

criricisrns, studies, sapport and attacks fiom I-csearchm. academia and praclilbners of'

ditfkrcnt misn~ntiuns. I[oweverl in this research, we shall cxplorc thc writings, dtbates

2nd discourses nn I-hc impact of the primtimion of public corporalions particularly on

- h i r clal?cicncy and consumers satisfaction. T h e are found in the review of privatization

l'n~,yinsl PI-is-atizalion

The proponents of privatization are plcnty and \.ociferous. C~ovcrnment hos set LIP

pri\.at~ntion boards ~ v h i l e some non-go\wnmcntal organiitations also aid in the

prt3n1clilon cf priva~izntion. According to Stan (1995:8), many scllolars favuur

pri~~ati?:rlion I ~ C C ~ I ~ S E of ~h ree nlajor reasons namcly: efliciency-cccunonlk rrlul-ning

power lo co~nnluriities and reducing government overload.

l k d (1997:2-6) a r y d that if one tics up the perforniance of a task with rcd

\,ipisiii, I?ura11cracy a~?d poli~ics \vithin n spstcrn that i s guaranteed to exist regardless n f

x c t i ~ ~ n t n l i l i r ~ mcl thc fcar of lasing a I ~ H C ~ customer are inf~ised into lhc task,

~ n < ~ t i ~ ~ r i ~ p becomes an exception while excellcncc the nrle. Therefore, Rced is

contend inp whatever government docs, the private sector can do better. Starr . . i 1 ')3R:R j and Savas [ 1937: t G7) sbaru this t h v ,

.'o\wp3id7' and Imvc h i g l ~ r b e n t f i k Additionally, h e privatc sector unlike the public

cwlor h3.s [he flexibility to hire and lay off'cmp!oyees as required. Equally, thc private

wcmr I-cduccs the ponrr of t rack unions to cripplc the policies of such corporations.

;.{'~rkci-s ;Ire onty insinnnents in the hands o r private investors, ~110 use, hire and fire

1ll~111 a \ u ill. Pindus ( I 907:2) maintained t h r ! ncptiated ;rrrongcmcnts for transI2r of

public cmployccs to prisratu employment or 10 public apmcics exist. Thus, N i ~ h t c n ~ a l u

( I q?7: I ? ) noIed t 1 ~ 1 prir.atisatian causer; a r;hrinkfige in the rate OF pruwth o f the puhIic

FCCIII~ wnrk lbrcc since 11ic mid-! 970s.

Stan. (IO(3S: 13-19) argued that becausc conkactors are n1waq.s in danger of no1

hnt ' in~: ~ l s c i r ciinrracls cutendccl, they are cir i \m by market discipline to provide quality

..;t.n.iccs elticiently. The ssmu cannot be said for governtiients ~ h a l have a monopoly over

s t m c sci-vices. Thus. proponents of priuatin!ion argue that where services are poor,

cnrnpgtihk and competing busincss are cs~ablishcd wllCre customers divcrt their

p r r r m g e 10. Thesctbrtt. market is used as a yardstick for judsing public organizations.

\':in SIv6s (2Or17:296-2~S) noted that the prirmry 2031 of any privatization effort i s LO

i n t r a d ~ ~ w conlpctition :rid market forces in the clcIivery of p ~ ~ b l i c s e n k s for efkiency.

13311md (2000) argued that privatization is thc 'low road' available for improved

P I Y Y I L I C L ~ \ \ I ~ . id-tjle t'w new managemenl innovalions lend lo incrrascd inlcrnal

p r d u c ~ i v i ~ v , such a s I-estructuring through ini~~.ot.ed labour/mana~ernent co-operalion,

3rc the 'high mad'. Batlard's main argumcnt is that h e empowerment of the public sector

emplnytes mcl providing them with the tools and resources necessary to bring about - clisngr. are ~ h r keys to innovative policies and proganmes that can save t a x - p n ~ m

ninnc5- and sti'il provide the service quality [hat is nccc.qsory, without resorting to the low

rmrl ul'pri~,alizs[ion.

O n his part, Znyyad (198?) a r ~ o e d in fn.our of'privolization, Me contended that it

is ~ h c uidy policy thal can bring efficiency i n al l the public enterprises. y It eliminates the

cnill~s~s m d mprod~lcrive due process noted by Yergin (1998;358) as

L. , ,

crl~l~gcncc, il can lead to poor conlract or pdormance, low customers satisfaction and

Yciyin's contribution ro the dcbate is very important ro this work. Not just

bc.c.3lr~e of his opinion an primtizntion impact on effe~ti\~eness~eflicicncy but his

intrduction ~ ~ ' O L I T seccltid'point of reseo~ach-customers satisfaction,

Ohen c! a/ (2005) argued that otvnr-rship effects are sufficient to achieve

improverneiit~ in lahour praduc[ivity and d e c r x x prices.

S t u d i e ~ c a r r i d oitt by h4tggirrs~il and Nerllcr (2001), La Pclrln and L.opez-Dc.

Di1;7n~~ (1993). SJLI! ancf Parker (2001) rc~.cal< that prices have miucd correlation w ~ l h

priwlization. For La F'orta and I,npez-De Dilanes, Saul and Parker, prices increase af~cr

privatimtian but Mrsllstcn (2001) observed or noted that prices are not correlated n,ih - p~ it-J t i n t ion. T1iqt are negatii7eIy correlated !I ith competition, measured by the nurnbcl-

ro t ' m o b ~ l e operators not owned by the inmtnbent. Thcrcforc, the price el'fects of

111 itati73tim-i m e not l!~e same i n every induslry.

Thus, privati7alion leads to improvement in both productive and allocatlic

cSl?cicncy. Fryclman e! (I/ (1999) nomi th,~! privatization has significant cKects on

IT! c n i x perfbnnancc but 1101 on oosl reduction. Earle and Tclegdy (2002) fomd in their

s~uiIy 2nd anal~.sis of a Ileterogsneous sample 01' Rumanian f i m ~ that priva~ization

increastx lahour prodtctivily,

I t is t h c ~ ~ f n r e cvident from the works reviewed so far [hat the cffecr of

pri\ ,itiza[ion nn iirnl pcrrormance is mixed. In~erest~dly. hcsc differing position5 arnsc

frum p13ctlcal s t ~ l d ~ c s of hetrrugcncaus c n v ~ r m r n c n t s and conipanies.

-4s n o i d by Yergin reviewed abovc, unplanned priiatization leads lo poor

conwiners' .;ari~factir~n. As it is known tlial effic~oncy ancF et'l'ectivencss leads to

ronc~irncrs' sntisfaction, we shall review vrnrks on the theory and phcnomeuon of

c lmwncr s ~ t ~ s h c t i o n T h r ~ is hecausc for LIS [c) measwe i t , it rn~lst be opcm[ionalizzd.

D ~ ~ s p ~ t e ~ \ t e n . ~ ; ~ - t . rc~csl-ch in the years since Cardozo's (1965) classic a~jicle,

rc~cnrc11c1-s I i a ~ to develop il consensual definition of consumer satisfhcticm. Studi\rs

on this issue have bsen diyidcd into ~liosc tlm focus on (a) testing models of consumer

~a~ i s lgc t i nn . and they :nclude Mano and OIivcr (19931, Oliver (I993)+ ?Jackenzit and

Cl1h1rsk.y (1996) and Tse and Willon (1998); (b) deiinitional considerations, such as Yi

I I1)90). 1-oincll f 19W), Hun1 (1977) and 0livc.1- (19S1), Halstesd, Hartman and Schmidt

' I W 4 ) \l'cstbrook and Reilly (19831, Day (lW4). 'This discrepancy creates three tnajor

y in l~ l e i i i~ rnr ml; resmlrlrtr in this ficld. Fir% selecting an appropriate delinition for a

; 7 ~ \ v c ' r ~ stlicly: second, opcrationalizing the definition and thirdly interpreting and

L* c o m p n r i n ~ mpirical rcsults. I.-lnwver, a rhrcr-step approach based on grounded theory

\:.as 11sti1 by Glaser and Straus (1967), Strnus and Cwrbin (1990) to discover and

l-:wn~~lntc diflkrsnt catryorized definitions o r clsnsun'iel' ~11isCaction. On this, we advancc

on I I I I I - r c~ icw.

I-bcising on service during consuntption, Ulivcr (1997'1 pcrceivcd consumer

s:~!isl,~clion ar; a jud~clnent that a produc~ or smvice p r o v i d d {or is providin~) :)a

plcsl;uiahlc IevcI of ccmsumptinn-related fullillrnent, incJuding Icvels of unbw or o w -

h I i i l r n ~ . n ~ .

In his stud!! of product performance? compared 10 sonle purchnsc skmdard,

I-I~lslend. I-lat-(man am1 Schmidt (1994) conceived it as a !ransaclion-spc~ific n f ' f d v e

resyunse resuIling from [he customer's comparison of prod~zct pctGor~nancc to SvrrK ptc-

PI."-chase standard. Oliver (1992) defined it ;IS a summary attribute phenomenon co-

exisling with ntlwr car~sumption cnmrions.

. *. . f o r Day (1984:R4) and \Vestbrook and OIivcr (1991) in their s ~ u d y of spccific

~ I L L ~ I ~ X ( : set cc tion, i t i 5 a post c l i~ice cvaluatiw judgment concerning a specific purcl~ase

. s c l ~ l i n n while Tse and Wilton (1988) appr tmhed it from the perception of perceived

diwc1xu-q between prior expectations (or some norm of perfotsnancz) and [he actilal

pmfmiiance of the product. They defined i t as the customer's response to rhc cva!ualion

or the lxm~iued discjqmcy between prior cxpecta~ions and the actual performance of

tlic pr'duct 3s perceived after the consumption.

In their post purchase study, Westbrook and Reilly (1983) defined i t as emotional

re.;ponsc. to I ~ E exp~~- i~nc t ' s provided by and sssociated with particular prod~~cts or

ccrr.ir.cs purchased. relai l outleh, or' e l m molar patrerns of behaviour such as shopping

anil b~lyer beliwiour such as shopping and buyer behaviour, as well as the overall market

.- pl;lcc. An cn~otional n:F;ponsc ~ r i s e r c d by a cognitive eva lua f i r~ process in which thc

percrptians of (or beliefs tlboul) an object, action or conditions are compared to one's

~ ~ ~ l u c s rsr nceds, wanls, de.siri.s.

In all, thc most recent sludies as revicred such as Halstead PI a/ (1994). Mano

;~nd Olilrrr (19931, 0 ; i v e r (1997), Spreng PI a? (1996) concerled to the debat? that

consumer satisfaction is an emotional rcspunsc. I~owever, while the literature contains

signilicnnt diPTerencex in [lie definition of consumer satisfaction, all the definitions share

s o m cmmon elcrnonrx, \Vl~en examined as :I \vl~ole, three general componenrs can bc

i c l ~ t n ~ i l i d as li?lloil;s:

c cnnsunirr salisf.rtction is a respilnv (emotional or cognitive)

o !lie response per~ains to a particular focus (expectations, producl,

consumplion experience, etc)

h c response occur a t a particular time (after consumption, after choice,

h x e d on accumulated dxpericnc t. etc)

Thc litcraturr vieivs consumer- satisfactio!~ ;IS some type of afkctive, cognitive and/or

~c lnn ; l l iw responsc thal is- based on a n evaluation of product-related standards, product

consm~ption csperienccs and/or purchase-relaled attributes exprcssed'beforc choice, after

chi,icc. nStc.r consump~inn , after estended expci-ience or just about any other time.

Summarily, there exists in the literature, diffmmt jmsitions ar.ising fr,on~ dilffercnt

onq~iric31 rcseal-ch, on the impact of privatization on organization's efficiency. U r ~ t therc

i s a .;cc.~nitigly conserms that el l ic iency leads lo consunler sa~is fac t io~r . Thus, rhc need Lo

t r s l and/.nr apply the thtsis that privalization Icads to increased efficiency and cmsunicl-

.sa~ist:~crion, i n thc context dNigcr ia using rhc NITEL as our case study.

~iat~sfacrion IS r l~e cclnsurnrr's rulfill~nenl response. It i s a judpnrnt that a product PI service feature, or the product of sen ~ c c l t v l f , prov~clcd (01- i< providina) a plcasural;rIe le>-ul ~f c o n ~ u m p t m d n t e b hlfi!lrnent, including !rvel.: of imder (11' mcr-fulfilment. ,.

The importance of [his definition lics in its focus on consumcr instead of

cu,!onxr. charactmmion of sarisfaction as Feding, and the grading of such feelings i.c.

~ n w f i i ~ i m s y 01- ~1nder-ful17lment, excess or ovcr-firlfilment, Thcsc underlined thc major

i ~ ~ l s i d ~ ~ ; t t h \ l ~ xhich h c tinditional rnacl-o-modcl theory i s concored with.

T'hr. nacra-motld thcory of Bitner and I-Iubbcr~ (1994) Iinkcd kc ovuraII servicc

~:~~~sl:!clim, eticountrr s3tisfk1ioi1, and perceived quality togelhcr. In essence, his i s

csl lcd A~lodcl of Tivo Lwels of satisfacrion and perceived servicc quality as it highlights

rhe culvtnlct of a ~ lobal level of satisfaction (the overall service satisfaction) in contrast

I., 11:c colis[nlcl of a cnmyonent level of satisFxtion ([lie encounLer scrvicc satisfaction).

I L S ni;~in indices include:

.- serv ice encounler satisfaction

personnel technical service

quality

- othcr d m i y u ~ s

The model sh:i1I hclp us to clnssify, study and comprehend for purposes ol'

, . ! -.. . , . ' ," ! , i 1 1 . 1 ' q . , , q ~ ; - ~ . ~ ~ ~ l ~ , I L ~ I.,, ; I \ % Y I 1 1 . , . I , a , . , . , . , ,m ,m. . ,

: 1 1 , ~ i a f c r i t s carnmerciaIization. Not only that, the model provdcs [us \v i rh a y i d c

tn the r i m i n g of our questionnaire, it provided also the focus of our study and guide

p r n p d y in our inquir).. Thus, we consider thc theory more appropriate for our srudr oi-

rewa rch.

I .7 I-IY POTT-! ESKS

Alicr thc dlic consideration of our prohlcnl sratcment and review of literatim, we

!in<;: ~hr fo!ln~r.ing Iiyp~~thescs:

o The policy I ~ T priva~izn~io~.~~con~nicl-ciaIizatiun o r NITEL has not improved its

scr\,ice efficiency in Nsukka Town.

o Tlic privati;:atibn/comrnercia1izati~~11 of WITEL has 'not led to increased

consumer satisfaction in Nsiikka Town.

1.8 ITETHOD OF DATA COLLECTIOS

Wc shall crnph>- he tool of scrircrurcd questionnaire in this survey research. This .w instrmcn~ sh;111 be used lo collec~ data on the opinion of people about NI7FL's

pcrhnii:~nce and the atrendant consu~ner satishction by the serviccs of the corpora~ion

Our pnpi11ah-m of ' s~c~+ 4 m l l bc drawn from tlic inhabitants of Nsukka Town.

5pt.~ificnTI>~, we h d \ x chosen 500 rcsponden~s to form our sample for the study.

'I h is numlwr .;hall bc drawn ranilumly fi-on1 teItphone users among university

.stnt'Fof'lice~-s. stucients, traders, NITEL workcrs, arlisans, transporters, civil scmants and

sllc.11 pri~:are csrablirl~mcnts like hosl-dalr; and auxiliary medical scniicc.; ~stablislt~i~nt~

: I I X I Iv11kc.1-s. \Vc shall r:nmplement this tool of data gathering with intcrvicws (wherc

n c ~ c . x s a r ~ . ) . ~ ~ . h l c l ~ shall be granted to NITEL c~fl?cials.

In ,?ddirion to thc above, we shall equ:llly employ Ll~c tool of library or archival

tc.smrch w l i ~ x ~ n such docurnenrs as of'fici,~l NI'IEL. records, custaniers' complaint

liles'npinion liles, pihlisl~ed journals, books, confermc.e/seminar papers and newspaper

r~111licntim~ shall be consulred.

T'huc, n.c sliall cn~yIoy both the primary and secondary sources of data colleclion

in []\IT ii orh.

1 3,IETHBD O r DATA AYALYSIS

Frcrni our ~licfhad of data collc.ction, u.e shall adopt simple pcicentage mechanism

lo sli~dy and a n a l y x data collected through qu4onnai rc . s . In addition, content analysis

shall lw u w d to qtudy pieccs of informatiojl a~b;~ilablt: i n published work. Thew r n o forms

of nnaI::ws 4 n l l play crmplententary rules in our effort to tesl our hypotheses through

lhc 11313 COIIUCICCI.

CHAPTER TWO

THE YICER1.-i5' STATE, NATIONAL BOVRGEOISIE AND PRIVATIZATIOY

1. I T H E 3-ATI'RT: OF THE KlGERlAU TTATE

7'he s a l e i n pwt-colonial Nigeria is ccntral to the socio-cconomic procr..;ses. 1 1

pla>,s 3 do~ninant ecnnotnic role. At independcr~ce in 1960, the nation I pelty baul -p is ic

cnn~rvl[c.d thc ~najor i:tduslrial and cornrnercial establishment in all key sectors of thc

\'isuna cccnotny Since [hen, putty bourptcs~sie {reprcsrnting and serving inbmational

c;lyrt;rl~qt i n ~ c ' r e ~ ~ ~ ) n m in unity with t1:c international bourgeoisie in their common

m c i c m of ~ m i n t a m n : : t l ~ c existing struclurc of the economy. Therefore, t h q ' eserciw

r lnn i~ t i :~n~ inttnencc on rconomic life and acti~~itics of the slate, Thus, Marxist scholars

I ~ u v t : a t tcmpkd nn expjanation of the post colonial state from lhis pcrspeclive. Tlwy see

1hc starc 3 5 an instrument in the hands of a powerful ruling class or dominant cIass. so, in

cfaSccl, the post colonml Nigerian state i s mentialIy t l ~ state of the cconorn'tcnlly

clninjn;~nl class which : I > r n ~ ~ g h the medium 1 1 i m t c power also bccorncs [he poTi~ically

~lnminanl c13s.5. [ h ~ s h c l d i n ~ on and o p p r t s s i n ~ ihose factions o f the class that arc. not in

pwi-CI-. A. Akc IDS5: IS) dollned [lie statc as a sprcific modality of class domination.

IVIIJL 111c stnlc s m d s for i s a number of particular insti tulions which tngetlicr caustitutc

its l.cnli~y and n,hicl~ inlei-act togethcr as prim of what may he called the state systcm. In

r!~i .- i sSrstcrn, i t is [he p - c r ~ i i n t + n t not the party in power that actively represents the state.

T l i v insiilutional mcchnnism, of i l ~ c state c.an be reduced to tImc apparatuses each served

by 3- b~~reauc i -acy nnd ~ I ~ t s e arc h e gnvernmeni apparatus, the cocrcivc apparatus 2nd h e

ideologkal apparatus.

These instirutional nlechanisnis of thc state appear as an objective, neutral nncl

~.~~ii\.crsalir;ric in i t s r c h h to the cktsses in I I ? C stale system. However, [hey arc never

n w t r u l bul wn-e ~ h c interest of a particular dominant class or itlliance of classes i n

c.(inlnrl of pc.>lilical powtx. In that scnse, rlic order being maintained by thc stale in

Xi;tlria and o h t r peripllerill capitaIist social iormations is the interest of the bourgeoisie.

1 ' 1 1 ~ ~ ;LTV in i+ positiurl to initiacc alternative pul~lic policies in their favour.

Classcs arc large gi'nups ot' people biUcrinp from each u!t.rer by [he place they

ociLlpv in a histcxicall;, &[el-mined system ~ i ' w c i a l production, by rheir relation [in Inosl

case.; fixed and formulatcd in law) to the menns of production, by their role in the social

aryanimtion of labour and consequently by 11ic dimension of the share of social v calth a1

wliich r l ~ q displxe an<! tnodc ol' acquiring i t . Classes are groups of people one of which

C'iasses are hisloncal ensembles that &re grounded in the struc[urcs of socio-

c c n i w ~ t ~ i c incqualily, dcrivativc antagonistic io~urest . r ; and their d y ~ a n i i c s . Therc arc other

iwms ~ f ' s ~ 7 ~ i o - e c o n n n ' ~ i c inequality in Nipcrii-t I ~ L I ~ cIass inequality I~as basically bzcn the

nic\<t pt$[cnl fuscr for privatization so far. I'~-iv;~lization has bcen championed by thc

prixnti;rition in Nigeria, This is because the economic intercst of [lit: working C ~ F S is

3ln1ys ~1 stakc in the Fmcess of privatization.

Ilisturically. primtintion has hcen atlvanced by h c h a n g i n ~ djvamics of' class

r c l ~ t i o n r\nd Jiifcrent classes pursuing separatc cconomic interests. Those w h o are in an

i\ i n r l n t' prii ~l~ization arc always the workinp class. That explains why \he tndc unions in

economic grw,th of i11e economy per se, bur simply to accumulate wcaYth through these

cntc~ipriscr; t l n ~ have invested their capi~a l in the guise of privati?ation. In Xigeria, h e

claniinmt c las .~ is cornp~,sr:d of members of' 111c bourgeoisie managers of foreign mvncd

cn11ipnnic.s (multinstion;~l,<), Ilie hard core unpiralist amonS others; lhcse are thc people

r h l h;iisc the c:~riral to ~nlluencc cvcry ~ o v c r n m ~ ~ t policy in [heir Carour,. Thus Okoyt.

( 1 39h:'h) pnytuhtecl that public policics in capitalis1 orien~ed societies arc o f l m

bourlicnisiu plicicr.

' ll~crc is no denying the fact that 11ie pclty bourgeoisies are the dominant clnss in

V~yeria.

2.3 THE CHARACTER OF THE DOWI'iAST CLASS IN NIGERIA A&I) ECOSOMTC I'OLICIES

Thc cl.mmer of the d o n ~ i n a n t clnss in Nigeria is ork of the peculiar

chnixtei-iqtics nf l l ic ?el-iphcr~l nature of Ihc &;tare in Nigeria. Nigeria is a de\.clopin_q

cwnmy u + ~ m the don-inant classes are mainly segments of [he bouryoisics. They arc

SLI- I ICILILI~~; ' ~lnorpanizd \\.hilt intra conflicls i ~ d stnrgples exist among hem for the

ctsnml 01' cute power. Economically, ~ h c y have a weak base. They, therefore, use the

srat r as an iml rumenl of'capital formation and wealth accumulation. The slate oI'afTairs

i s nt.cwsita!cd by the rac~ors which Ilavc tn do wirh the lcvel or d c i d o p n i c n ~ of the

; q - q ~ a r ; ~ l ~ ~ x an~stiahlc to xploiintion, accmulaiion and capital formation.

Ake ( lW1: 179) also noted that as ;r y - ~ e r a l rulc, lhc capitalist class in Africa is

cnga;cd in vtr!c little prad~lctivc activity. They tended to accrue their wealth tlirough

~ w l i ~ i m l c011~1j~ti~n by h e ~ s c of stare power for appropriation and by acting as coliecting

Ralph hIilibancl in his own perspec~it;e on the bourgeoisie class in Africa 2

L ~ ~ : I - I 1.d thnl those ~ r h occupy leadins positions in the slate system use their p v e r i n tcr

~ l i a 1.0 ;d~.;lncc tllcir UIW economic itrtcresls and economic interests of their famillcs.

l i i rdx and foltonws. iI process of enrichrncn~ occurs which assumes a greater n1.1mber

01' limm and Ici~ds ro a prolifcralion of diiwsc economic ventirrqs and activities. 11-1 rlle

process. ;1 genuine bouryaisie may come ill10 being and grow stror~g with ~~nli i l r l ing

r. 10s.: cnnncctiun tn the state and its leading mcrnbers who are themselves part of h e ncw

hour~c.oisie (?.~Iiliband, 1377: 108)

AFtcr h e w i n ling of formal mdepcndencc in Nigeria in October 1960, it was the

indi~cnoul; pcrty hotirgenisiz that optmtrrl thc state system. this indigenous bourgeoisie

na:, c.;ccntiall~ 111rnpcn in the sensc that i t hzs no capital base, Icaving praducrion to

tivcign capital and pre-occupying itself nrith the st rug^& for powcr, thcy became

~~npruduc~ive and u n d h to condition For b l -u~ l cxploitahn or the dominated c l x s r s and

c'rncn stmngiilati~n of factions of theit onrn rlorninant class lhat arc not in conlroI o f 'hc

s i ~ ~ c p w w . .4s ilkc i lhonvberc (1989:74) nored. the state in Afi.ica rcflccts thc limited

1de1 c l c p ~ e n t of the production forces in so far 3s they have hampcred lhe genemlization

nl 'r.nn~modi~y producrion and exchange. 'Ihe ncr cffcct of [hat politics becomes warfxc.

Y m < ~ i 1s ovcr-valt~rrl and sccurity lies in pelting more and more power. So the

wbclrdinarc class who have liltle powcr or no powcr are not really a constitutitc social

forrc In the slate docs not have any right. Their inlcrest hardly features in the for~nulntion

of public p l i c i w . a f ac t which hclps to cxplain why policies devised in LIE name of

c!c~-clrlrmen~ is irre1ev.m [o actual dwulopmenr. I1 is in this contcxt [hat one situatm thc

a i ~ ~ p ; ~ o n ol'pri\,3timtii,n ol'public enterprise nq a molter of state policy

:\kc o I w o b s m ~ d that the h c h n in xcending ordct who control the 1e;r~ers of

illr ponw tind that t h q ' arz obligcd to rely on i t fbr appropriation, gel uscd to doing so

11111 only out of' necc5sity but out of cl~uice through c n t r e p r u ~ ~ v u r i a l activity. Non-

hcpsrmnir, hcticrn nlwajn.; in danger of being harassed and t'sploittd by Y~ce , also

b~cnrnr. nliciin ted frurn production and in cii~rc.preneurial activities. If they 11-in power

thcii, c"iilrcpr~nc.~1-131 aci~vity become ~ w l u n d ~ r ~ l so the entire dominant class bccarncs

tutolly allen~ited Srom production and pamriticol activities and unable to contribute much

to rhc ilct~elayment of pioductive forces (Ake ill J , Ihonvberc (cd) 1989:45).

Thk ruplains tli: character of the Jnm~nanr class in Nigeria and tlic dcpcndencc

OIS ~'\1i'm3l ~ O ~ C C S The I~itter determines econimic policies in Wigmia.

2.4 THE DOJIIBAST CLASS AND PRI\'ATIT,ATION IN KIGERIA

-1 hc prilatizntion of public enwpr i ses in N i p r i a cannor b\: explained outside the

~ i r ~ s ~ i ~ l ~ n g mode L I ~ J ? ~ O I ~ L I C ' [ ~ U ~ in Nigeria 311d the character of the class that onm the

means (of' produclion. '1s Onuoha (19998) argued, the stalc cannot be csplained outsidc

tlic 51x5~'[y. For h i m , 11ie s w e exists in cvery stxicry. The state is a specific rnodaliry of'

?cI??~c" r~ la t ions n~liich dercrmines and y ~ s d s he prevailing mode of production an also

nwdiatcs intm and illtril class slruc,gIrr. Here llsc distinguishing characreristics of thc s r a ~

) m m n e i t s f i m c ~ i n n w'lich includes not only determining and prhecting [he prevailing

m r d e of p r o d i ~ ~ i o n b11t also moderating and rriediating the relalioiisliip arnong social

t-h-ce..; in tliz society,

S~ricrllt speakin:. h e specific mobsliry o r power relations is a phennmenon of

c l a x snuiery. 'l'lie dominant class is a gmi~p of people w3th the same idenlnzy and

clcci~icmir in1clTst. This p o u p people tlsuully f o r m an ccononlic graLip, which by

f'irtuc of' its control of 11ie prevailing means o f production ability, prorect and g~r3r-d the

prwniliiiy rnorlc of psni'uction and instruments o r processes ol'exploitation. On this basis,

thcl>. I I ; I \ Y pri'pondcran: con~rnmd over the rcst of [he socicty. TI-ley determine the policy

~?.hicli rlw p o ~ , c m n x n t in office irnplcrnents. Il'the government policy is not in 111eir ot\m

inkrzs~. [he): in17uenca Lhc policy niakcrs to chaoge such policies.

CHAPTER THREE

PRII'ATIZATION AND SITEL EFPlClENlCY

In the lost clinptcr, u-c laid the foundxion for the siudy and analysls the prrwnt

c h p t c r s h ~ l l p u r s m hv hi~hlighting the f ~ t o l s responsible for or that have structured the

pliq ol' prii.ntiratio.~ in N i p r i a . They plnr-ided the reacons and arguments for the

~i-~iic!'r~- of' pulllic inv.:stments to privnrc 11;lnJl;. This chapter is bent on cvalualing rllc

p%Lrnc j 9 u f the efliciency school or proposition in the privatimtinii debarc. 11 shall pursue

rhis unde r thc follou.in; Imd inps :

a ) The M c a n i n ~ and AI-gumcnt for Psiva1i7ation in Nigeria

b) The Efficiency a f YITEL in the Corn~i~i~r~ication Industry

c ) Shc Llynnmics I)I 'NITEL Yrivatimtinn

4 1 T11c C'olnn~crciill ired NITEL.: A n A w ~ s m e n t of Its Efficicncq.

3.1 THE h'lEA3'ISC AND ARGC'MEN'T FOR PRIVATISATIO3 IS NIGERIA

- 7

I he word privaiization nlcans different ? h i n ~ s to dil'krenl people in Nigeria. As

111~ name implics, it mcalis rcturcling public xsets to the private sector. I t involvcs a

I-eduction of gove~nment involvement in the production of pro;ision of sewices 01.

rcg~~lcitinn o f prices. O18;cn 1 l994: j ) noted r h t the menu of activities which makc up a

dclirilion of pi-ivatieaiirn includcs tht? sate n r g ~ ~ b l i c assets, deregulation opening up srari-

nion~~prllics to greater cornpetition. c a n t r n c ~ i n ~ our the privarc provision of public

wrvictli, joint capital pro~ects using public and private finance and reducing user charycs.

A,losr of the arpmenls about public entetp-ises are a b o u ~ s e l l i ~ ~ g enrerpsises or de-

n;~~ii,nfilim~irm. I-fanm.zr , tliel-e. are othcr fentwes of privatintion n41ich are also cri~cial.

1'11~rc is olblr.n an inter-connection berween szlling assets and reducing the ragulalory

en!'irrumcnt.

~~umbcr. of rzasons h a w been advanced for the privatization of pilbl'ic

r n r e ~ r i s e s especially i n Nigeria and in o ~ l w developing countries h a t also adopted the

pri Y J L i7rl t ion p r q p m r n e . The rationale for privsrizatton in Nigeria rangzs from

hlidgstary consideration to rnanagement incl'iiciency and accountability problems in

public snterprivs. A new dimension has been introduced in the privatization argument in

Yiycna ihnr qucstionl; ~ h c pi-oper rolc of thc gove~nrnent. Some have argued t h ~ r the

rniliitnt is 110t a p o d business npernrnl-. Therefore, it has no busincss in doing

Economic argurnrnts for the yrivalim.\on of public enterprises include reducing

LIYC'F I>y using t l ~ ~ P ~ O C ' C C C J S from sale of public. enterprism by the government, exposing

x~i\ irics lo m ~ r k c ~ Ibi.ccs and competition, and reducing both government spending and

g n i m i i n c n l rhal-e 01' thc economic cake. I n addition, there are also arguments on

ndmin : ; sli;3rc oumeixhip in the economy m d reduction in public sector b o ~ ~ a w ~ n g

req'il-cnlrrnts. 11rg~rnu:nls againsl privatization in Nigeria include the problem of

rnrwopolies in which new private mon~pol ies could use their power, to raise prices, cut

C'oniptxition in a n i~~rlustry prvvidcs pouwf i~ l inc.entivw to both products and priccs.

crsnsiiincr deinznd or over price their serviccs generalty fosc customers. In this regard, i r

is bc~tcr to libcralize 3n indiis~ry and introduce crrrnpefition by alIon*ing individuals

n c c w 10 he industry's area of operation. Thu tmiest wny to inrroduce competition in all

iiidi~~lr;. i ~ ~ ~ t l as NIT17L nI7icl1 has been opcmling as a n~onopoly, i~ is argued, is 10

l i l 7 ~ ~ 1 ~ l i z c 1 1 1 ~ iiidus~ry.

It is generi~lly believed that the priimry objmive of privatization of public

c.ntcq>rises in Nigeria is ru increase thc efliciency of public mterpriscs in partic~rlar and

the c c r m m i y generally. ?'INIS, it has becn a key policy in the ~naci-o-economic mix of

~d txcy~ln t~on 2nd liberal ~zation of' most economics. The overall objeectives include:

' J Ttlc i ~ ~ l p s r w m r r ~ r c~f npcrational efl icic~~cy and competilion.

b i .Iccclmting t h r rrdop~ion of new icchnology, procluctio~l proc.csses and (hc

cxpnsinn of itlvcstnlent.

i') Incrcncins the role of private sector individmlly or in groups in the owncrshiy and

n1.11lnpwn t of ~lalional econon~ic rrsuLllrces.

c l ) Most i rnpo~ta~ l ly , the go\Icrnnient intcnds to us? privatization exercisc i n Nigeria

I(> chcck thc present ahsolute dependznce of public enkrprises on government

resc)urccs.

'nicsc were f l i ~ soIc reasons as projec!ccl by thc media on why Nigeria is p u r s u i n ~

p~ir -a t r rn~io~i policy. 1 hus, llsc aim of this project is co et.aluate thc ei'ficiency argument.

3.4 ]'HE EFFrCTFSCY OF SITEL 13' '1 HE COJIh7Ci?4ICATIOIV INDUSTRY

The clficiency. profitability and acco~~ntability of public enlerprises in the LDCs

arc CI-isis pl-unc. In th:ory at least, ill1 governn'renl owned companies arc accountable to w.

thz go\ crnrnrnt and the gencral public a1 1:lrge. The qucslion about efficiency and

acco~~nldsjlilgii I I JS hctm the major concern 01' studies in public enterprises in Nigeria,

31:liw~li h e current issue now as it relates rn public enterprises particulnrlg !host? of

public u~ililirs are cvibently corruption snil inc~5cicricy.

Thc pcrforrnance d thc public Ieaves one in doubt as to wl~crher the gowr.nrncnt

. ;h~~ulr l he inwlved in the owne~ship and ntanngcrncnt of parastatnls or if it is better to

to Ihwe arras in which il can ~'Si'ectivcIy contrvl and manage. There is no gainsaying thl:

f i c ~ 1113L NITFI- i n Ni~.:i-ia has pertb-mcd below especration in i ts services to the public.

N o rinc n h has L I S ~ 111e service of NITEL hns come out with nothing more than myriads

Che comnlon trend that runs most ol" rhc public enterprises in Nigeria is heir

c c ~ ~ ~ i n u c d t'ai1~11-2 for change in spite of the persjsrent public outcry over the shoddy

ssrvices i t provides or tsorbilant charges for their smiices. It is becausc of tl~ese shoddy

serl;ices oC N I r E L thrt many Nigerians hcwcd a sigh of relief when the N i p r i m

C'nmrn~.~nic~zinns Conlinjssivn granted apernr ing licenses to M'TN and ECONFT to

opcmlt. rh r Glubal Sysrm of :Mobile Tttlecoiii~nunication in Nigeria (GSM), As soon 11s

711 N s~artcd nperatilm5 in Niycria, many N i y i a m started subscribins to its services

1-ur rlnc tli~ng, it scrns, morc cfficicnt than [lie first national carrier - N U E L . N I E L

sIcivicc< was a c a w uTglxing ~ n e f f i c m c y and corruption.

Severnl rtlasovs have bcen advanced b? the management of NITEL to absolve

t l ic~mdvcs n f public criticisms, which inter alia include poor funding by the Federal b* Govcrnmenr. inadeqt:are maintenance of and replacement of equipment, and most

inipoitaiitl~, !he inill:i[ity of NLTEL to make profits rhat are enwgh to service its

o p x ~ l i o n s . I-lcn~wer: A11;~roni (19SrS:497) nn1c.d that public enlc~.prise inefficiency is nor

neccc.;anly thc rcbult u f ownerchip. 1 1 ~ a b y s m ! performance of slate-o\viied enceq~riscs

lw, hem the result of lhcir control and process of management including their rcl~tions ro

- * I ha1 acuo~~ncal~ility is a fundamentnl pl-obkm in pb l i c enterprises can bc seen

In- thc I-~ovunn~cnt. Seccwdly, they e n p r e i n the production of goods and s c n iccc for

selt., 1 hirdl;), i t is e-cpcctcd that their sales revci~ue bear some relationship to prvduction

cusl: Tllcsc cl~anctenstics of public e~~ te~p r i s c s al\wys lead to confi~sion and non- - - ;~cl:oun~:hility. Celtainly, p b l i c enterprises zri, organizations designed to be part of !he

~ ~ u I ~ I I c iccrfir nf tht. Economy of most devclilping counrrics. However, they 3re also

ntil~ FL-J to opcntc cnmrt~crcislly. Thrv d o not have shareholders like private

rorpor;llions. They arc govclnnient owned and as such should be accounrable to Ilie

~o~wnmen t . This is t\hy the problem lics, wherz there is glaring inefficiency in any

pul7l1c enterprise, there is likcly to be corr:~ption or lack of accounlability on the part of

Gcntlmt. B ~ ~ r c a u o f Pu1:~lic Enterprises (HPE) , hh l l a rn Nnsir El-Kujai, he, s ~ u t d 1 1 1 ~ 1 Inley

a h (v i l l i regard to a;counrability in NICON I-IILTON MOTEL and the N i ~ e r i u n

:~ i id ll'1'3' ~ o u I J dtclare to ihc r;linrel~nldea in unr yeat of optrat~un" (Sec Tel! Clct. 7. 21103)

lllcrefore, many have co~lcludcd thar privatization of'parastatals or p ~ ~ b l i ~

cnrcqwises is not only to make them morz fi~nctional and eff7cient b~rt more importantly,

te n u k c thcm more act:uuntable lo h i r o m m . It is our focus in this work to appraise

I IW iiiip,icr of N l7I'E[, pl-i\,ar~zation from thc pt.sl;pective of its inefficiency.

3.3 THE DY 5AI~TlCS OF NITEL'S PRIVATTZATION

111 1935, NITEI. was set up as n solu~ivn to the defects which charactcri7ed the

tcl~cotiirnirr~icatioiis dc--elopment since Nigeria's independence. Such dckcts include the

y ~ n . n i n ~ gap between y a l s and attainments, poor managemmi, lack or accounlability.

transpnrmcy and inetliciency. NITE,L was then introduced lo harmonise the co-

ol.rlin;ltion of the exlern.ll ind internal commu~iication semices, rationalize investntents in

I ~ I I C C O T I ~ L I I I ~ ~ ~ ~ C ~ ~ ~ O ~ des.elopmcnt and provide easy access, efficitkt a n d affordable

sen iws.

7-hc t.r;tnhlishnient of NITEL has led to many devcIopments in h e

trlrcnrnnumic;ltion industry. H O W C V C ~ ~ it 11as hiled in i l s goals in t e r m of its tcledcnshv.

yiycri3 11~s only 700,UCO relephone lines out ol'ir. hich only 400,000 are connecrcd for a

p~pulalion of nvar 129 rlilliorl (Fedcral Officer nf Statistics, 2003). To solve this prnhlcm,

Uic Fcderal Governmcr~t de-regulated the itidustry 1hroi1~11 the establishment of thc

\-iycrinrl C'onirriuiiication C'ommission (?KC) hy DKI'CC NO 75 of 1992.

The nizn of this mnmission was to crcnls a replatnry environment Tor the supply

(-11' ri:lecnmn.runicariun fxilitics and scwiccs, l'ncilitate [he entry o r private entreprttneurs,

~ l ~ n i i i n ~ r ef'tycient nlarker and fair con~pctition among all players in the industry.

NCC 113s since i l ; formation approved 200 operating licenses for private providers

of \.ariiws ~c lccc~n~mun i~ : a~ ion services including Internet Setvice Providers. NlTEL has

also ~pllr~ss'cd t'i$t pri+:ale lirrns to be conncctcd to i t s swi!ching sysrems. This shol[

c~i:~hlc i l prnvidv rnme lincs, attain greater efficiency and service.

NevurtIst.lcss, tht: reality of WITEL's inefficiency has pointed to the n e d for

~c>ircmrncnt to he more pro-active about improving teleccrn~munications. Thus, in year

yrm, YCC' g3i.t l icensw to Global System ol' Mobile Contnlunicntions (GSM) to NITEL

by nucrion to tivo biddzrs n a n d y : ECONLT V51~lrss Nigeria Limited and !idTN Nigeria

1 irnitclil. The licenses 1tm-e for U S 2 4 0 million. The highest paid liccnse world n \ w ; this

(iSbl t r c h n o l q y has over-shadowed NITEL landlincs. This experience motivated the

\('I' ~ l w u q h t ! ~ Rurtarr of Public Entcrpriws to seck for NITEL's privatization. 'The

privatization colr~rnenccd with an auction proccss whereby NI'I'EL was sold to Investors

Intcrn;ltio~~al London 1-irnitcd (IILL), n U n i ~ c d Kingdom based investor at USS4.37

billior!. IILL paid up thc rrrandatory 10% deposit but failed to pay lhe balance by t!ie end

r ~ f ~ l l e dcacllinr. Consequently, this developmcn~ derailed the process,

First. he I n ~ e s w r s Inlcmational London Limited (IILL) lost its slntlls as rhe

l m l ' c r i ~ ~ d hiildcr Ibr powmrt~ent's 5 1 percen[ s!me in the K~ser ian relccommunication

1.inii~ecI (KITEL). T'hc Fcderal Govcrnrncni tcrnminated the ageemcnt signsd by

Y I ~ I ~ ' Y Privi~li7ation Agency, Ihe Bureau or Public Eritcrprises ( B E ) on Decernlm 3 1,

' i l l l l . Sccon~lly. h e f;111111e led thc Fedcnl Governnxnt to enter into a managerial

3.4 THE C0\131T.RCI,\LISED I : AY ASSESSMENT OF ITS I7FPICIEsrt'

Sincc its incepticn in 1985, when the Post and Telecornrliunication (P&-l') and

Niycrian Tcl~coturnnnication Limited were 11-lcrged, a lot of changos have occurred. First,

a dccrce in 1992 scpamtcd i t from the Ministry of Cornrn~~nicarions and a firs1 step

~uir..nrds its privatizarion. l'lx decree establislicd h e NCC. This d c \ d o p n ~ e n t led to [he

crnci-~sllae o f licunscd Private Telecommuniciltion Operzttors (PTO). NITEL was Sully

culll,~~err.inljzeij ill 1'192 ( h t t p : ! ~ \ ~ \ ~ ~ \ ~ . t i ~ ~ ~ p ~ 1 ~ ~ ~ i ~ 3 ~ ~ 0 n ~ ~ ~ 0 ~ l ~ p 1 1 b ~ i ~ ~ t i 6 ~ ~ ~ ~ ~ ~ ~ ~

uliic3:;l~~ficlesfnitel.I1tml). - In 1996, hIobile cdlnlar phonc was separated from it to operate as a fully lledged

. - cn!llpmy. l o encourage ihc injection of capiml and improved skills required to increase

thli cmnpanv's . - nlarker i:ornpetitiveness, marc than 70% of NI'TEL's nehvork was

diYi\;ilized, The n c t v w k itself has seen nur;.sive developments. The Federal Capital

Tcrrilnry. Ahlijc7 has been expanded with the hnpe of adding somc 40,000 digital lines to

t h t network. Some IO~!.I)OO have bcen commissioned to the network in the South West

Zimc while kc? North \!'est Zone a~tracted 6O,UI!O digital lines. Optical tibses were laid in

mricws parts of the co!mrry to boost transmission of data and Ialge vdunle traftic that

n ~ s a s s t m i d to aid the ~ s p a n s i o n of 'he netwcxk

?'hcse are espwtcd to conrplcment thr internali~nal gateways in Lagos, Enuy

~ n d Ksdun:~. The pvcrnmnt ' s decree is that 40% of UITET., is lo be sold ta a strntegic

pnrtner with internalion11 &pcilise and resources to manage the network, 20% to l.~c sold

to Nigerian nationals a hile 10% retained by Government. &nreve;, in July 1999, the

Obw~iic? administ[-ation promptly cancelIed the cxistin? licenses and aut11oriz.ed rhc NCC'

LO i w l c yet another SEL of licenses. NITEJ., rhen npprovcd eisht private firms to be

cc~nnecrcd 10 its s.vitchiig sq'srenl in order to ~vovide s:rvices to diKere.nt Nigerihl.s g,eo-

polit icnl zones.

In 1999; it set lip a packet switched S.25 service via telkonsa's VSAT based

qmx 5trc'3ni s e n k c to South Africa l o link Ki~el-ia's ma.ior c i k for darn

c~)rnmunicatians. Vlosr I I ~ the ~elephonc systc~ns are sill analog as only h c major cities

11~1.11 l t~tcnii l t int~l Dir.er.t Dialing (IDD) faci!i\y whilc the govenitnenr has repcurcull its

I-csa1t.c [a make tclecon~municiltion sewices available to the rural communities.

Today, NITEL i ; a limited liability company that administers both intcrnal and

evtcrnal relrconim~rnic3tion seniccs in Nigeria (Ajayi et nl, 2000). I t 11as g r m n antl

m i l c ~ ~ r > ~ l r sarious stage; of innovations. Currcnlly, it ol'fers t l x following scrviccs:

1 ; I'hrrc 3 1 r o ~ w 14 tclex cxclianyes \I ih lotal ii~stalled capacity of lZ,SIN ~rt)icc

frequency relqrcph terniinal.;.

7 1 Tranm~ssion: It has microwave tenninal stations numbering 264 with a c ~ p a c i t y

ran!:c - o< between 300 LO I .SO0 that accnmmodatc one calour television 011 !he 960

and 1 .Si)Ocb~nncI s>'stcm.

3 i 1 cleplamy. t r . 1 ~ ~ and l eks delivery, tclcyaphy and registered telegraphic address.

~ o d gay phones. tra~ismissions and rccuption of real-time television fur nclnork

scn-lces, private licensed telephone and telex services, private wire, alternate

voice data (AVD) circuits, voice c o s ~ and voice reception, lntemational public

coLmer scl-vices, NIFAX services [Fascilnile) or data s i v i t c ~ i n ~ system, electronic

mail and cellular.

The ma-ior irnpact of all these innovations and rcsponsibili~ics on NITEL services

iirc s~~ppcrscdly d u d . It t135 i~nprowd the tele-clcnsity f ~ u m 1 per 200 to B per 50 (NITEL

Annual Hrtnclbook, 2004:38). However, on h e second cxpccted impact of attaining n

l . 'ni~-crsnl coverage access, multi yle connect i ~..ity in h srrkka has provcd inlpossiblt. Its

p~rhlic p l m e hools have a11 closed down. Most of'the :;urvices \vhich NITEL is assumed

Ir, he prrlbmming in places likc I7nugi1, Lagos, Abuja and other cities not obtainable or

1.1~11nJ in Nsi~kla . In te r~ ' i t \vs prantcd '10 the ni;magerncnt of NITEL Nsukka reveal that

nirss[ nftlic instl-umcnts asn~mtd to have been installed due to comrnercializalion are not.

1j.f c q ~ j l l y ahsened []!at oul of 1.246 land lines in Nsukka, 849 are eitl~cr dzad, tlot

scrvicccl or ros~ed (NITEIL. [nventory/Recovd Rook, 2005). Thus, only about 29% i .e. 397

u l rhcst l ints are fmct:onal. Wc equally obsemcd that all rhe 322-pubIic boots madc

3i.3il;1l-de are no more wi)rking, even those in the NITEI, premises. Available staristics of

aclnnirrs cnrnplain~s irl the NITEL offkc, rsvrals a daily average customers coniplaints

of ' 47. I'onsirl~ting bclh the smail numbel. ul' limctioning Iines and the nrim1)er 01'

cnrn?l~int.s. t v ~ e r h c r with the above infotn~ariim, it is clear that NITEI, Nsukka is highly

incf'{Gcie.nr. Consequentl;.:, cornrnesciaIizalion has no significant impact in its operalional

ci'licirncy. This validate$. our firs1 hypothesis.

CI1APTF.R FOIrR

111 t111~ chaptcl-, wc shalI e\.nluate c~~~turner 's response to our questionnaire on

I I K ~ I - s ~ i ~ h c l r d n w i t h YITEL services. After which :ve shall exdore the problems of'

N ITE I, Nsilkka tn enable u s offer recornmendat i m s for in~provem~nt ,

.-! crilical study 0 1 - thc abovc rablc t h i 1~11ects the responses of pcople living in

!trnls

Ttlcphone Operators : Landline

C Alphonc

Rl)th

Y,rctv:i~sl.r ]>inked: h9 I'N

~ - I : , L

Globnlcorn

V-'vtobile

PI-2 SCI- J;l-TEl, Nel?,~'ork

531 i s l l e ~ l wiih N 1TliL Services

:In!. Irnpr~vmmeni in SITEL sewices 3i'ti'r cnmrnorcialization .

p1mnc.s. 0111 of this numl~cr. 100 persons r e p ~ c x n ~ i n g 21,7% still oprratc landlines whili:

Yes

I O i l

400

4 0

3 96

4 4

48

12

37

I Y

2 16

Vh:o

400

40

45 1

104

4%

452

488

417

470

250

No Answer

.

I _

-

3 5

12

3 4

Totill

5 00

5 00

500

5 00

5 00

500

5 00

5 00

500

5 00

4hO persons have ccJl~1innes. I t is ~herol'orc irnyer;ltir~c that some o r \hose \vho have

I;lttdlincs equally havc t:ellphones.

h n l w invcsrisation reveals that out of the 460 persons that operate cellpkones,

3Ofi prwons represenling 886.07% operate M?'N network while 44 persons ('3.5%,) arc

connec~ed to MTEL n v r w r k . While 12 of o u r respolidents opelnre other networks, 45

alhc.1.~ r - p m t c ~ h c Glol.~alcnni network. 11 is ~licrefort. clear that majority of the people

hat-e prrl;-lrcncc.s for M'TN over and above other networks.

I t is worlliy to obstrtte also that when \he q~lestioil of NITEL network prekrcnc.e

was ~ L L L fonvaril to our r~spondents, only 37 our of500 persons prcferrcd their network to

rl~liers. 1 1 is pcrlinent t > ohservc h a t this number falls short of the 44 persons using

hdTF L cellphone and 100 others using landlines. 'This thcrcfore calls to question

?II'I'EJ..'s cl-edibility. Thr,s. the credibility qucsrion put f ~ n w d reveals that 470 persons

~ ( ~ p r i i s e n t i n ~ 94% o f our respondents are diss;rtisficd wirh NITEL services, though 216

~-c~;pomclcnts rqrcsen!:ng 43.2% ackno\idzdged an impl-ovcd NITFL after

coii~oierc.i;lIiz~ti~n. Con.quently, thc privatizntion of NITEL Nsulcka has 110 impact on

\lit ins\i~utinnnl performance and this has I ~ L increased c,ortsulner salisfaclion. This

i f i \ l i ~ I n ~ c . x our .r;ccond hymthesis.

\.Ian k i n g 3 raticnal animal and l ~ i c cmscious I-easoning would always allempt lo

i1cf'~nii w h : ~ t ~ r c r h e does or he is doing. Thus ihe Federal Government has presenlcd all

~ 1 i 1 . t ~ o f r m i m s on i v h ? ~ the said policies have come 10 say in the economy of the country.

In Nigei.i,~. g-wzrrlinent wants to privii~ize NITEL and commci-cialisc Education.

Cio~-cinrnent v i c w on t l ~ r malter, according to Prof. Fabian Osuji, the forrncr Minister of

1-.i L I L J [ I O ~ . . nsas h t WIG policy is a produc~ of the I-euiew by govcrnmcnt of the

rrccln~nicndotions of th: cdnimi[tee set up by the President in lhe rise of NITEL Bills and

inefficiency in the cntire rnanagcmcnt of NTTEL and poor educafio'r~al standard in the

c.r}u~~~r!- ~5 well a s increase in hostel accommudation fees1'.

As a rmult govc~nrt~ent decided ro put in place a sus~ninablc sysrsrn of

~ccumnioda~ion n1ana:menL and the privatirstion of NITEL amongst others. The goal

acccl~din~, to ~overnrncnt was to meet a ctl~-t;lin levcl of dccency, This managemen1

.;~.steiii in p x m n i e l i t view can only be acliuved by ~ r a n s f m - i n g o f hostels to e.mre

rn:lrlnFt.rc (Guardian Oct., I 'Ih 2004).

Ilo\vci~c.r, Nigeiian students arguc t ha t l'cderal Government has no Io$cally

dtl t>r~\ihlr rcaqnn lo pr vatize NI'TEL and commcrcialixc liostcl accomn~odation. Thry

; ~ l~ -ca i l y impovcrix11t.d n.it11 incessant increase in fucl. h situation ~vliich has made most

pclrenrs unable to mccl t ! ~ basic needs of their i'clrnilics as it conc.ern %c.hooI fees, hospital,

S l ' I ' l ~ L . 2nd NFPA lsills - house rents not to ~ 1 1 1 ; of paying a fee of between N5,OOO and

x l f ~ , /~ll.lO.

h401-cqo. the studcnt? unequivocally cmbemnerl as a continuation of Obaxoniu's

. ~ r l ~ ~ - p c ~ n p l ~ pnlicics or dc-regirlation, conmiercialization and privatization as dictated b!

rhc I:\ JF IVnrld Hank,

Both Nsukka people and sttrdents 1 1 3 ~ critici~ed the Federal Government f o ~

inill~ring some d e t ~ l o p d camtries in privortzing NITEL and hoach whilc at the samc

riii~r iyvr ing innking prnvision for granls, Iwns and schalarship as i t i s dam in such

c l c $ ~ l ~ ~ p c d c m n ~ r i e s to ensure afTorJablc ducat ion for il'igcrians and efiicicnt

tclc~niii~z~~lnicalinn systcin. SocialistiDemocracy (March - April 2005).

Rcsirlcs these te;~rs of Nigerian studants and Nsukka people in particular and

Kiccritl~i in I d1-e inkrnled by the esploita~ive satorc of capitalist entaprises

~ n ! n trcre i l Fcnelmles. Repon on Trust Collcgs - corn - Australia Acconlmodatio~l and

l-hc people nf Ysukka Ionin were i n l m ~ l ewed to express iheir VICLGS and opinion

on ~ h r . prit,oriznticm of NITEL as policies of 111~ 17edci-a1 Go\,ernmznt and which was done

t ' [ l t c l i t cly and efficienrly:

.[-his section of chapter i'our deals with the presentation arid analysis of data

cdlrctcd Trctm fhc YsuLBri pcople only,

11 \ \ i l l 171: ~abulzted and pul in a more colment and logical fmm and then analysed

ni~Tiin the contcvt o r tl-le research objectivec 2nd hyprlthesis. I am usin_c the percentage

itrstrilsr~~ion n ~ e ~ l m d of malysis for the prescnution of the data.

h7ean\vhilzl the Iswe of the impact 01' I c d m l Government policy of p r i v a ~ n ~ i o n

a n d cornmcrcidiza~ion on NITEL and whelher it acrtlally brings about efficiency or

S l t 7 I, u n h e 0116 hand, and thc sr?tisfaction of ~ustolners on thc olhcr h m d

OI'TIOVS ) >T&l,E ( FEhIAT,F. j TOTAL ( PERCENTAGE , I

I I RESPOSDKSTS ( RESPONDESTS I IESPOXDENTS 1 OF THE 1 V T . t L I

From ~IIC SLOW table, i t can bc seen that thc response of those that denokd by "A" of

h o h male and lknmlc ralal rcspondrnts of 27 o f the total respondent of 50. h:ls the

1iii.lic~~ pcrcen\;iys. [ha1 is 54%. I t mcans t h a ~ 54% of thc Iota1 respondents agrw h a t

poliq. ~~ t ' con~mcrc ia l i .~~r ion and privatization beins adopted hy Ihe Federal Govcrnment

?!.ill hclp ta improve el'licicncy and increase cmomer'r; satisfac~iall in Nsukka t o w .

'I h is i~ follo~vcc' by 28% of the respondents that strongly aprec dcnoted by "SA"

rig31nst 10% and rP4 01-those that dlsqree (D) ,~nd strongly dlsogrce (SD) respcctivcly.

From the result I tierefore, in t l~c above ~ahle, i t can bc obsen ed that from response

or .;c~~iiplc of 50, the msponse of male and krnale that agree \hat h e privatization of

X [ I T L u d l help to increase efficiency and improve customer's satisfaction is an

csprcwon of polit~cal opposition against bad yvernment policies.

Has prir.a~iza~ion!cclmmercialization of NlTEL. increased consumer's satidaction

in Nsuk kn Torrn'?

This represents 38% of the total respondents whilc 19% is the total of both scses

r.rsponddcnt<. Also, 26'14 !;trongly agree (SA) against 12 and 24 percent that disagree (D)

and s:~-~rl~:Iy 1)is;lyrcc (51)) nmking a total of 31;%, resycctivdy,

Ac~~icrlly. he pci>ple of Nsukka tow11 have tzndcd to rcsponb lo the policy

~ ! i I'l+i:rc.ntl y depcnctins on their socio-cconon~ic stabs and political conscii~usi~ess.

4.2 THE PROBLEi5TS FACING NITEL $SUKKA

From thc intei~icws granted lo thc top management of NITEL, Nsitkka and our

2 9

?Indings h m the rt.~,iew of available MTFL documents, t1.e observed that non-

j1ista1131i~m of nccdcd c q u ipmnt , non-availahi lily of mulriplc base star ions and obsoletc

cq~~iprncnt are thc imin factors resporlsihlc for NITEI.'s inefficiency in Nsukka.

C'nnimcrci;lliz3t1on nccessilarecl the ins[dIotion of nn Electronic Digital Swtching

I qulpnicnt to ei'fect a change from analog to digital operations; this enhances

crmncct~z~lfy loo. I t I\ as 11o\\ ever obserwd [ha[ unlike NITEL in other cities, Nsukka has

b t i l l i l c p r i ~ / r d of thc tnultiplc base stations, an equipment that ensures or fxilifntes

i n n u n i m h l e calls sirnul!~~ncously. l'llis is campl etcly re5ponsibIc for its non-connec~ivity.

Scconcll~~, the cost of access is still [oo high to have a tmmfisrin Tory impact,

Thcrc rlru prcw~tly pric e competition batlle.: yoing on in\.olving PTOs, thar is I'rivate

T e l m ~ m m u n i c a t i ~ n Opl:rdors and GSkl pru~idcrs . There is need to l onw the access

clwrgr ~ n d not only th.2 acquisition cost. Pcqde, as a result of the access cost, have

~rcl;lronceq for n t h networks.

Third!.. epileptic p o w r supply. which increases thc cost of access is smlhcr

prcd~icm that \ \ as idmt~ficd. Supply of clc.ctticity needs to be op~imal to enablc

hii~lnc~.;cs an3 b m k ~ to provide seanile~s onl~ne services through local networks, \\ iciu

s ~ c ~ ~ien~~ar-ks m d thc Intcrnct. 14'1icre every one depcnds on power generators as thc

~ r i m a r y rcliahlr pnnrcr slipply, the system becomcs costly and inefficient.

poor quality serv~cz is another inliihiting factor on the scrvices of NITEL. It is not

cn,u~gli to have clicap lines and low cost handv,idth. efficiency and accessibility ol'

Y [TE 1- bc pordrn~unr .

I t is therefore clt3r from the above points that the inability of NlTEL Nsukka to

pro\liclc et'ficient scl-vicec sterns from various technical and managerial inefficimcy.

1) [Has priva~izationlcommercialization of NITEL increased its efficiency in Nsultlta

Town?

11) Has the privati~ation/commercialization of NITEL increased consumer

satisfaction in Nsultlta Town?

Hypotheses

I) l 'he policy of privatizationlcomn~ercialization of NITEL has not improved its

service efficiency in Nsuklta Town.

11) The privatization/commercialization oS NITEL has not led to increased consumer

satisfaction in Nsultlta Town.

Specifically, we adopted both the tools of questionnaire, interview and arcl~ival

research as our data gathering instruments aid method. We preferrcd the use of simple

percentage and content methods of analysis to infer on the data so generated.

Arising fiom this, the following observations were made:

- The nature of the Nigerian state which ultin~ately shaped the character of its

classes and class struggle led to the use of state power by the petty bourgeoisie

to enhance their capital formation and economic base. The harmonization of'

the conflict of interesls that arose Lhere from between the national bourgeoisic

and the international bourgeoisic led to the introduction of privatization

policy.

- 'The in~plementation of this policy on NITEL led to various changes and

inputs ranging from ii~achinery/equipinent input to changes in managerial

structiires. These cl~anges orchestrated a change in the quality of its sesvices

as acltnowledged by 2 16 representing 43.2% of our respondents.

However. the findings of the research is hat:

1 ) The privatization/con~inercialization of NITEL has not led to its increased

technical innovation in Nsultlta shtion wit11 regard to personnel and

macl~ii~erylinstruments. Thus, it has not increased its service efficiency.

2) 417 respondents representing 83.4% of the sample are not satisfied with NITEL

services and would prefer other networks to it. The credibility question put

fonvard reveaIs 470 respondents, that is, 94% of the entire respondents including

NITEL subscribers are dissatisfied with its performance. Thus, our hypotheses

stands validated.

From the interviews granted, it was rcvealed that NITEL Nsukka is faced with

numerous problem that rendered it inefficient and ineffective. 'These problems were

identified as non-installation of a switching multi-based station responsible for

connectivity, cost of access, epileptic power supply, poor staff quality and directors'

insensitivity to efficiency demands.

4.4 RECOhlR3EiYD~~TIONS

On t3e strength of our findings, wc recommend the following:

1 ) NITEL management should evolve and pursue the policies of in-sesvice training

Tor its \vorlt force and the employmenl of professionals to improve on the quality

of its services.

2) NITEL should link up with the S A l 3IWASC and SAFE Cable System and

exterid some to all zones for cheapcr and high quality services. More efforts

should be invested in encouraging thc development of IT and Telecoms expertise

in Nigeria and Nsultlta particularly,

3) The prices of tariffs and rates of cost of access should be reduced along with the

cost of acquisition of NITEL comnlunication outfits.

-1) NlTEL should not be privatized rather government should radicalize, de-politicize

the enterprises in Nigeria.

5 ) Subsidies can help to reduce the cost of NITEL operations either in its cost of

management or importation of equipment and or both.

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