Advantages and Disadvantages of Privatization
JSS 3 Social Studies Second Term
WEEK 6
DATE ____________________
TOPIC:ECONOMIC REFORM MEASURES IN NIGERIA (contd)
CONTENT:
1. Advantages and Disadvantages of Privatization,
Commercialization, Deregulation.
- Problems Associated with the Economic Measures
Sub-Topic 1:
Advantages and disadvantages of privatization, commercialization and deregulation.
Advantages of privatization
- It brings improvement and innovation
- It brings healthy competition
- Leads to efficiency
- Encourages accountability
- Improves supervision of work
- Improved working condition
- Eagerness and positive attitude to work is enhanced in the workforce.
- Reducing the burden of decision- making imposed on government
Disadvantages of privatization
- It can lead to inflation
- It brings about inter- company conflict
- Results in lack of transparency
- Wealth will be concentrated in the hands of few private individuals and will not be available for public benefit.
- Unemployment and poverty due to downsizing and forced retirement.
- Fragmentation of industries.
- There is the problem of regulating private monopolies
- Short termism of firms
- It could lead to cuts in essential service especially to the less privileged
- Political influence
- Exploitation of workers by the private firms involved.
- Exploitation of consumers.
Advantages of commercialization
- It enhances efficiency through higher target setting
- Makes the workers more resourceful leading to better operation
- It helps to upgrade MIS( Management Information System)of the affected sector of economy.
- It reduces government expenditure
- Increases the level of profit
Disadvantages of commercialization
- It may result in inflation
- It could lead to industrial strike/ unrest, as money earned from commercialization is not often well utilized for public benefit.
- Deprives the citizens from benefiting from those services which were originally welfare services.
Advantages of deregulation
- Elimination of scarcity
- It breaks monopoly and improves competition
- Creativity and innovation is enhanced
- Increases employment opportunities
- INCREASES THE SUPPLY OF THE COMMODITIES
Disadvantages of deregulation
- Increase in price and undue exploitation due to subsidy removal
- It leads to income inequality as the rich become richer at the expense of the poor.
Evaluation
- Mention 5 advantages of privatization
- List three disadvantages of commercialization
- How does deregulation improve the nation’s economy?
Sub-Topic 2: Problems Associated with the Economic Reform Measures in Nigeria
- POVERTY – all the economic reform measures in Nigeria tend to favour the rich who have what it takes to buy shares and get involved in the business areas opened up. Wider gap is created between the rich and the poor , making the rich richer and the poor poorer.
- LACK OF AWARENESS DUE TO ILLITERACY AND IGNORANCE– the problem of illiteracy makes it very difficult to explain to or convince majority of the populace of the need for these economic reform measures.
- LACK OF EFFICACIOUS LABOUR LAW TO PROTECT NIGERIAN WORKERS IN PRIVATE ORGANIZATIONS
- IMPLEMENTATION OF PROBLEMS
Evaluation
- Mention two problems associated with the economic reform measures in Nigeria
WEEKEND ASSIGNMENT
Objective Test:
- The advantages of privatization include all but one of these (a) Efficiency (b) accountability (c) improved working condition (d) promotion of idleness
- One of these is a disadvantage of privatization (a) Downsizing and forceful retirement (b) improved working condition (c) healthy competition (d) efficiency
- The problems associated with economic reform measures in Nigeria include _____ and _____ (a) Food and subsidy (b) problem of illiteracy and poverty (c) commercialization and deregulation (d) literacy and enlightenment
Essay Test:
- Write short note on how poverty affects the economic reform measures in Nigeria.
