CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
The inefficient utilization of resources and financial mismanagement of most of the public enterprises over the years has resulted in a very weak balance sheet, excessive debt and in most cases negative network. Furthermore, the fact that this indolent performance of the state in the administration of public business enterprises creates a solution in which national fund that would have been better spent to guarantee new economic activity and employment opportunities for the army of unemployed is being used to subsidize deadwood that would neither grow nor change.
Public enterprises are enterprises that are controlled by the state, they are non-profit oriented enterprise. The history of state participation in business enterprises was not choice but by patrimony. To buttress this fact, origin of state participation business can be grouped under the following four categories:
The first category to those which is conscious with the practice in their country. The British administrators kept the colonial public sector activities that are traditionally held by the British government. To this category belongs the utility services industry, health, education, water, electricity, port oil, air and sea transportation as well as the marketing of agricultural product through marketing boards. In the wake of political independence, these state-owned services are automatically remained by the indigenous public sector. The second category of business are that preciously controlled entrenched foreign, private sector which manifestly controlled by commanding heights. Three of the main factors of production via: management, entrepreneurship and capital. A situation which was compounded by the fact that the distributive trade was