Privatization and commercialization are popular elements in the process of deregulation in Nigeria. The two concepts are however, more specialized processes of government disengagement from those economic functions which it now undertakes but which can be more efficiently carried out by others, in the case of privatization (Olaghore, 1991). Similarly, commercialization connotes the differences between ownership and dependency because government retains ownership but severes the umbilical cord of dependency so that the enterprises can operate commercially without any subvention from government (Olashore, 1991).
In the past, privatization and commercialization has become very critical socio-economic indices for growth, development and sustainability in Nigeria. There is therefore a fair amount of consensus that the oil boom of the 1970s injected the confidence into the public sector about its central role in economic management. This new philosophy of the oil boom era was encouraged by the fact that indigenes were generally capital deficient and could not afford to invest adequately in most industrial ventures. These inadequacies left the commercial sector largely in foreign hands, making the indigenization programme inevitable if Nigerians were to have meaningful role in the economy. To those in charge in those times, government had an obligation to hold a stake in trust for the people of Nigeria.
As critical and well meaning as the foregoing may have been, the participation of government in the economy took on a life of its own. Government itself participated in all kinds of ventures including steel production to road haulage, clearing and forwarding services as well as importation and distribution of consumer goods (Olashore, 1991). Shortly after the oil boom flopped, the burden of funding the public sector became too much for government. Therefore, there was the need to reduce the burden of dependency by the companies and parastatals of government on the public purse, and the desire for increasing efficiency by government-owned companies whose inefficiency was causing government much embarrassment and costing the public much money in losses, led to the consideration of privatization and commercialization. However, an enabling Decree to this effect did not come into place until 1988.
Speculation gave the impression that ideological and regional balance considerations may have had the effect of delaying movement on privatization and commercialization. The ideological issue was played up by those who saw a cleavage between the haves and there have-nots with the haves supposedly waiting on the wings to buy up for their personal gain, that which belongs to all Nigerians. Government must, therefore, have felt the need to proceed with some caution on the subject allowing a process of information dissemination to help prepare people for the reality of the need for privatization and commercialization which has become part of Nigeria’s political economic index to date.