THE IMPACT OF CURRENT ECONOMIC POLICIES ON THE PROFITABILITY OF COMMERCIALISED GOVERNMENT ENTERPRISES: A STUDY OF KADUNA REFINING AND PETROCHEMICAL COMPANY LIMITED (KRPC).
THE IMPACT OF CURRENT ECONOMIC POLICIES ON THE PROFITABILITY OF COMMERCIALISED GOVERNMENT ENTERPRISES: A STUDY OF KADUNA REFINING AND PETROCHEMICAL COMPANY LIMITED (KRPC).
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Date
1997-12
Authors
MUSA, THEOPHILUS MAKAMA AYUBA
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Abstract
This project involved the study of Kaduna Refining and Petrochemical Company Limited
(KRPC) with respect to the impact of current economic policies on the profitabilitx of
Government commercialised enterprises.
The study is aimed at providing useful information on KRPC to its Management and
Bureau for Public Enterprises (BPE) as well as lid government in "carefidly managing
the privatisation exercise being contemplated in order to ensure that the country obtains
its maximum benefits.
Secondary data from primary sources on the past performances of the KRPC plants as
well as the macroeconomic indicators of the nation for the recent past years were sourced
and relied upon for analysis.
Wide the Fuels plants maintained a fairly stead) capacity utilisation of about 65% with
a slight improvement in 1995 to 71.04%, the Lubes plant showed a downward movement
with its highest value of 35.19% in 1992 and recording its lowest value of 7.29% in
1995. That of the Petrochemical plant, with the exception of 1993, consistently declined
also.
The Products Value Index (PVI), being an efficiency performance index for both the
Refining and the Petrochemical plants, increased steadily from its lowest value of41.93%
in 1993 to its highest value of 71. 77%) in 1996. This showed a steady improvement in the
overall efficiency in the running of the KRPC Rt fining <%f Petrochemical plants, based
on the available resources.
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The Manufacturing plant capacity utilisations only ranged between 1.287c and 26.22 %!
Only in 1991 and 1992 did the ROls achieved by this outfit meet the NNPC Corporate
acceptable value of 20% on its investments.
The general impact of the economic policies on commercialised enterprises therefore had
been a resultant high cost of borrowing and sourcing of required inputs (especially
imported ones), leading to high cost of products or services rendered and the subsequent
decrease in plants capacity utilisations. Tlie bottom line is that profirabilirx is decreased
or hindered as advantage could no longer be taken on economies of scale. Also, in the
case ofKRPC, the enabling commercial environment is yet to be fully put in place. This
has hindered overall competitive performance.
Description
A PROJECT SUBMITTED TO THE POSTGRADUATE SCHOOL, AHMADU BELLO
UNIVERSITY, ZARIA, IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR
THE AWARD OF MASTERS DEGREE IN BUSINESS ADMINISTRATION (MBA).
DEPARTMENT OF BUSINESS ADMINISTRATION;
FACULTY OF ADMINISTRATION;
AHMADU BELLO UNIVERSITY,
ZARIA.
DECEMBER,
Keywords
IMPACT,, CURRENT ECONOMIC POLICIES,, PROFITABILITY,, COMMERCIALISED GOVERNMENT ENTERPRISES,, KADUNA REFINING,, PETROCHEMICAL COMPANY LIMITED.