Public enterprise is an agency of government through which the government manages its commercial and economic activities. According to a United Nations publication, “by public enterprise is meant economic undertaking especially industrial, agricultural or commercial concerns, which are owned (wholly or in part) and controlled by the state.
According to A.H Hansen, “public enterprise means state ownership and operation of industrial, agricultural, financial and commercial undertaking”.
Friedman define public enterprise as “an institution operating a service of an economic or social character on behalf of the government, but as an independent legal entity, largely autonomous in its management, public accountability and subject to some directives by the government, equipped on the other with independent and separate fund of its own and the legal and commercial authorities of a commercial enterprise.
CHARACTERISTICS OF PUBLIC ENTERPRISES
- They are state owned
- It is created by specific government status, it may be by edit or by law
- It is subject to company law, but only the company type
- It has a legal personality
- It can sue or be sued
- It is finance differently from others
- It can generate it funds from either by shares
- It account is not subject to pubic audit or public accountability.
- It employees are not civil servants except that of departmental fund.
- It is usually administered by a board, like boards of directors.
REASONS WHY GOVERNMENT ENGAGE IN PUBLIC ENTERPRISE
- To break the monopoly of the private sector
- To overcome economic stagnation
- To ensure better utilization of available resources
- To ensure sources of revenue for the government
- To ensure equitable sharing and availability of scares resources
- To ensure provision for the needs of our people
- To ensure supply of people need and wants.
BUREAU OF PUBLIC ENTERPRISE
It’s the coordinating agency that takes cares of public enterprises to ensure that government business are carried out in accordance with the status of law that established them. The bureau is established under decree NO78 of 1993. The board is equally managed by a board that acts in a similar capacity like a commissioner.
They play an advisory role to the government and to the enterprise because both benefit. It is managed by a chairman and ten other members. These members may be drawn from both the public and private sector of the economy.
FUNCTIONS OF BUREAU OF PUBLIC ENTERPRISE
- Is to advice or further public enterprise for privatization and commercialization
- They equally advice the government on capital restructuring of the business to the benefit of the economy.
- To lease with the issuing houses (stock market) and security commission and exchange commission for determining prices on each one
- To advice the government on allotment pattern for the sales of shares of the enterprise set out for commercialization and privatization
- To oversee or supervise how those shares are sold to the general public.
- Submit to federal government proposal for sales of shares i.e. government shares
- Ensures the success of privatization exercise taking into account, need for balance and meaningful participation in Nigeria.
- To ensure updating of account of all commercial enterprise with a view of ensuring financial discipline.
- To ensure success of commercialization exercise and monitoring on continuous bases, for such period of time as may be considered a speedent on the operations of the enterprise
- To interfere with the public enterprise with the supervising ministry in order to ensure effective monitoring of public enterprise marginal autonomy
- To ensure they keep in conformity of the business data they have signed.
Social and Economic Objectives of Public Enterprise
- Enhance balance of commodities
- Provide labour market
- Provide employment
- To ensure foreign reserve
- Enable government to control strategic sectors of the economy
- To reduce concentration of wealth on few individuals
- To reduce poverty level
- To balance regional government
- Alleviation of poverty
- Employment generation
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