© Kamla-Raj 2005                                                                               J. Soc. Sci., 10(3): 171-180 (2005)



 Privatization and Efficiency: Evaluation of Corporate

Financial Performance


R.O. Salawu and O.O. Akinlo


Department of Management and Accounting, Obafemi Awolowo University,

Ile-Ife, Osun State, Nigeria

E-mail: osalawu02@yahoo.co.uk, yinkakinlo@yahoo.co.uk


KEYWORDS Privatization; performance; efficiency; ratio, profitability


abstract This study examined the efficiency of privatization through the evaluation of financial performance of a privatized manufacturing company between the period 1978 to 2001. This period cover the pre-privatization and post-privatization period of the company under consideration. Privatization has been recognized as a key element to promote efficiency, reduce fiscal burden and help in developing capital market. In order to achieve the objective of the study, secondary data on the performance indicators were collected from the annual reports of the organization. However, the findings showed that the privatization programme has a significant mixed impact on the operation of the company under study. The programme also indicated a positive impact in the operating financial performance of the company as reflected in itís consistent growth rate of returns of the years under study, especially in post-privatization era of the company. In spite of the general positive impact of privatization on the financial performance of the company, the post-privatization period was beset with escalating operational cost resulting from high rate of inflation, which was seriously obstructing investment and industrial growth. Thus, policies to tame inflation should have inbuilt ability to increase the productive capacity of the company.


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