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Characteristics of Public Corporation in Nigeria – Advantages and Disadvantages

Public Corporation Advantages and Disadvantages.

Government, like individuals can establish and run business organizations. These organizations are usually established by an Act of Parliament or Decree to perform pseudo – commercial ventures.

Public corporation can therefore be defined as business organization established by Acts of Parliament or Decree to carry out quasi-commercial activities under the control of government, and so provide social welfare services for the people. It must be noted that while statutory companies are established by state, state-owned companies are not.

In Nigeria today, emphasis is on divestment of equity holding in most companies or public corporations. This is informed by the stark fact that Government they say is the worst manager of business. Most government companies or parastatals are currently  being either privatized or commercialized. Public corporations are managed by bord or committee headed by a chairman. Examples of public corporations are the unbundled PHCS arm now called Transmission Company of Nigeria (TCN) NITEL, Water Corporation, NTA, NNPC etc.

Advantages of Public Corporation.

These are:

  • They cater for services that individuals may not render at a profit or business which capital outlay is too much
  • They are usually part of welfare package of governments to subvent costs paid by individuals
  • They can raise capital easily
  • The risk is usually small
  • National security reasons also endear this type of business organization to government

Disadvantages of Public Corporation.

They include:

  • They result in inefficient use of resource
  • Monopoly is engendered
  • Most of them result in colossal waste of resources and unnecessary duplication of efforts.