Technical efficiency in some privatised enterprises in Nigeria

Abstract

Despite the upsurge in research on privatization in recent years, the empirical knowledge of the privatization programme in African is limited. Aside from theoretical predictions, not much is known about the process and outcome of privatization exercises in Africa. This study evaluates technical efficiency in four privatized enterprises in Nigeria. The methodology adopted is Data Envelopment Analysis (DEA). The technical efficiency scores are presented both for the Constant Returns to Scale (CRS) and Variable Returns to Scale (VRS) DEA. Relative efficiency was found to be considerably higher in the past privatization period in both the CRS and VRS specifications. These results indicate a substantial improvement in technical efficiency as a result of privatization.

African Journal of Economic Policy Vol. 11(1) 2004: 17-34