Public Corporations and Parastatals

Public corporations are business organizations established, owned, and controlled by the government (federal or state) to provide essential services to the public at affordable costs. They are created by a special law or an Act of Parliament, which defines their powers, functions, and limitations.

1. Definition, Types, Purpose, and Functions

Definition: A statutory body created by the government to perform specific functions, usually to provide infrastructure or services that private individuals might find too expensive or sensitive to manage.

Types of Public Corporations:

• Commercial Corporations: These are expected to make a profit while providing services (e.g., NNPC, Nigerian Ports Authority).
• Service-Oriented Corporations: These focus primarily on providing social services, often subsidized by the government (e.g., NTA, FRCN).

Purpose and Functions:

• To provide essential services like water, electricity, and telecommunications.
• To prevent the exploitation of citizens by private monopolies.
• To provide employment opportunities.
• To manage strategic industries for national security (e.g., defense industries).
• To ensure even development across the country.

2. Finance, Control, and Problems

Finance:

Public corporations are funded through government grants, loans from financial institutions, and internally generated revenue from the sale of goods or services.

Control Mechanisms:

• Ministerial Control: The supervising minister can issue directives and appoint/dismiss the board.
• Parliamentary (Legislative) Control: The legislature reviews annual reports and budgets; they can also investigate the corporation.
• Judicial Control: Courts can intervene if the corporation acts ultra vires (beyond its legal powers).
• Public Control: Feedback from the public and consumer protection agencies.

Problems:

In Nigeria, public corporations face challenges such as political interference, corruption, lack of capital, management inefficiency, and bureaucratic 'red tape'.

3. Deregulation, Privatization, and Commercialization

Privatization:

This is the transfer of ownership and control of a public corporation to private individuals or companies. Objectives: To improve efficiency, reduce government spending, and encourage competition.

Commercialization:

This involves making a public corporation more profit-oriented without necessarily changing ownership. It can be Full (no government subsidy) or Partial (government still provides some subsidy). Objectives: To make the corporation self-sustaining and efficient.

Deregulation:

The removal of government regulations or barriers to entry in a specific industry to allow private competition (e.g., the downstream oil sector or telecommunications).

4. Comparison Between Public Corporations and Parastatals

While often used interchangeably, there is a technical difference:

• Public Corporations: Statutory bodies created by law to provide services or engage in business. They have more autonomy than government departments.
• Parastatals: This is a broader term that includes any organization with some government interest or control, including agencies, commissions, and boards (e.g., JAMB, INEC). All public corporations are parastatals, but not all parastatals are public corporations.