Lesson Notes By Weeks and Term - Senior Secondary 1

Term: 2^nd Term

Week: 7

Class: Senior Secondary School 1

Age: 15 years

Duration: 40 minutes of 2 periods each

Date:       

Subject:      Economics

Topic:-       Public Enterprises

SPECIFIC OBJECTIVES: At the end of the lesson, pupils should be able to

1. Define public enterprises
2. State the features of public enterprises
3. Highlight the advantages and disadvantages of public enterprises
4. Outline the sources of funds for public enterprises

INSTRUCTIONAL TECHNIQUES: Identification, explanation, questions and answers, demonstration, videos from source

INSTRUCTIONAL MATERIALS: Videos, loud speaker, textbook, pictures

INSTRUCTIONAL PROCEDURES

PERIOD 1-2

NOTE

PUBLIC ENTERPRISES

Public enterprises are government or state-owned business organisations

which are usually set up by act of legislation with the main aim of

maximizing public welfare. They go by various names such as Corporation,

Authority, Commission or Board.

Examples in Nigeria include the Nigerian Television Authority(NTA), the

Federal Radio Corporation of Nigeria(F.R.C.N), the Nigerian Railway

Corporation (N.R.C), the Nigerian Ports Authority (N.P.A),) etc.

FEATURES OF PUBLIC ENTERPRISES

1. They are owned by the government.
2. They are established either by decree or Act of Parliament.
3. The government provides the capital for setting up the business.
4. The main aim in setting up public enterprises is to maximize the welfare of the citizens.
5. The risks of the business are borne by the government and the tax-payers.
6. The business is controlled by a board of directors appointed by the government.
7. A public enterprise is a legal entity or a corporate body.
8. Public corporations are conferred with  monopoly power
9. Workers in public corporations are public servants.
10. The management of public corporation are accountable to the government.

ADVANTAGES OF PUBLIC CORPORATION

1. Public corporation provides infrastructural facilities for the public
2. They are owned by the government and as such there is always availability of capital for expansion
3. There is continuity i.e. public corporation can last for a very long time.
4. Development of capital projects
5. Avoidance of exploitation of consumers
6. Creation of higher standard of living
7. Accountability to the public
8. It is legal entity
9. It caters for the interest of workers.
10. Provision of employment opportunities
11. Enjoyment of large scale production

DISADVANTAGES OF PUBLIC CORPORATION

1. It requires large capital
2. Government interference: Government can interfere through the appointment of unqualified and incompetent people as board members.
3. Inefficiency in operation: Lack of competition can bring about inefficiency.
4. Danger of monopoly: This makes public corporation to be inefficient since there is no competition.
5. Bureaucratic tendencies and red tapism: System of administrations is complicated and that leads to delay
6. Corruption and mismanagement: The appointed people may misappropriate fund of the corporation.
7. Not profitable: It is not profit oriented therefore there may not be commitment.
8. Wastage: People tend to waste resources since there is no sense of ownership for anyone appointed.
9. Lack of initiative: People do not bring in their skills into the business since they are not direct owners of the business.
10. Lack of privacy: The account and the activities have to be published.

REASONS FOR THE ESTABLISHMENT OF PUBLIC CORPORATIONS

1. High capital requirement:– It requires huge capital which may be difficult for private individuals to obtain.

1. Generation of revenue: – Commercialized ones generate revenue for the government.
2. To prevent foreign dominance of the economy:- This is to prevent expatriates from hijacking economy through the domination of the production of essential goods.
3. To avoid wasteful competition and duplication
4. To provide infrastructural facilities
5. To prevent monopolistic tendencies of the private individuals.
6. To ensure even distribution of income
7. Provision of essential services which may not be profitable for private individuals
8. To ensure higher standard of services provided
9. To generate employment opportunities
10. To promote economic development.
11. For strategic and security reasons- Government may engage in business to control certain key industries such as airports, seaports. Defence, the oil industry installations in which the government cannot afford competition for strategic reasons.

PROBLEMS ASSOCIATED WITH PUBLIC CORPORATIONS

1. Political instability: Frequent change in government can affect the effective performance of public corporation.
2. Frequent government interference: This results to inefficiency of public corporation.
3. Lack of qualified personnel: The appointment of incompetent person can affect the performance of the business.
4. Negative attitude of workers: Workers tend put on negative attitude because they regard it as nobody’s properties.
5. High level of embezzlement: The top officials of public corporation cripple the business financially by stealing and diverting the corporation’s funds.
6. Favouritism in appointment: There is favouritism and nepotism in the appointment of directors which leads to the appointment of incompetent and unqualified personnel.
7. Political victimization: If the appointed directors are not in the ruling party, it works against the effectiveness of the corporation.
8. Practice of sectionalism and ethnicism: This cripples the effectiveness of public corporation.

SOURCES OF FINANCE TO PUBLIC CORPORATIONS

1. Loans and overdraft
2. Internally generated revenue
3. Grant from government
4. Grant from international financial institution
5. Grant from foreign countries

EVALUATION:    1. Define public enterprises

2. Discuss public enterprises under the following headings:
3. features
4. advantages
5. disadvantages
6. source of funds

CLASSWORK: As in evaluation

CONCLUSION: The teacher commends the students positively