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Question

Difficulty: MediumInfrastructure and Service Sectors: Power, Transport, and Communication

In the reform of Nigeria's infrastructure sector, the federal government restructured a public transport enterprise to operate as a profit-making entity, eliminating financial subsidies while retaining 100% state equity ownership. Which economic policy measure does this restructuring represent?

  1. CommercializationAnswer
  2. B
    Privatization
  3. C
    Deregulation
  4. D
    Indigenization

Answer

Commercialization
Commercialization is an economic policy where a state-owned infrastructure utility is restructured to run efficiently as a self-sustaining, profit-driven enterprise while the government retains complete ownership and financial control.

Step-by-Step Solution

1
Examine the equity ownership structure described in the scenario.
The government retains 100% equity ownership of the infrastructure enterprise.
Identifying who holds the equity distinguishes policies that transfer ownership from those that reform management.
2
Analyze the financial and operational directive given to the enterprise.
The enterprise must operate efficiently, earn profit, and function without government financial subsidies.
Adopting market-driven operational efficiency without transferring public ownership to private hands is the exact definition of commercialization in public sector reform.

Key Concept

Commercialization of Infrastructure Public Utilities
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Topics

Infrastructure and Service Sectors: Power, Transport, and Communication

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