Give any five reasons why public corporations are established in Nigeria.

Answer Details

Public corporations (state-owned enterprises) are established by government for economic, social and strategic reasons. Five reasons include:

• To provide essential services: to supply basic utilities such as water, electricity and public transport that citizens need but that private firms may not provide adequately.
• To prevent private monopoly and exploitation: to keep control of natural monopolies in public hands so that consumers are not overcharged.
• To provide services that require huge capital: to undertake projects such as railways, ports and power stations that are too costly for private investors.
• To promote even development: to locate industries and services in areas a profit-seeking firm would avoid, reducing regional inequality.
• For strategic and security reasons: to control industries vital to national defence and the economy, such as defence production and refineries.
• To create employment and to earn revenue for the government.

The underlying reasoning is that some goods and services are too important, too costly or too easily abused to be left entirely to private profit-seeking firms, so the state provides them through public corporations.