A HISTORY OF ODU’A INVESTMENT COMPANY LIMITED (OICL), 1976-2012

Idowu, A SUniversity of Ibadan, Ibadan

MA Dissertation

TABLE OF CONTENTS

CHAPTER ONE: BACKGROUND TO THE STUDY

Introduction

1

Statement of the problem 3

Objective of the Study 3

Research Objective

3

Methodology

4

Justification of the Study 4

Purpose of the Study 4

Periodisation

5

The Study Area

5

Literature Review 6

CHAPTER TWO: HISTORICAL BACKGROUND: ECONOMIC DEVELOPMENT OF

THE WESTERN REGION

Introduction 15

Establishment of Western Region ant the Western States

16

Economic and Industrial Development of Western Region

21

The Western Nigerian Marketing Board

26

The Western Nigerian Development Corporation

30

Western Region Finance Corporation

34

Conclusion 37

CHAPTER THREE: ESTABLISHMENT OF OODUA CONGLOMERATE (1976)

Introduction 38

Origins 39

Organisation and Management 53

Conclusion

58

CHAPTER FOUR: DIVISIONS OF THE COMPANY

Introduction 40

The Subsidiary Companies of OICL 60

(a) Cocoa Industries Limited (CIL)

62

(b) Wemabod Estates Limited 68

OICL Associated Companies 74

(a) Wemabank PLC 75

(b) Lafarge Cement (WAPCO) PLC 80

Minor Holdings of OICL 83

Conclusion 85

CHAPTER 5 CONTRIBUTIONS OF ODUA TO NATIONAL DEVELOPMENT

Introduction 86

An Assessment of OICL in Relation with State Owned

Enterprises in Nigeria 86

Contributions of Odu’a to Regional and National Development

99

Conclusion

104

CHAPTER 6 – CONCLUSIONS

105

CHAPTER ONE

Introduction

Odu’a Investment Company Limited (OICL) is an offshoot of

the Western Nigeria Development Corporation (WNDC). With the

creation of 19 states in Nigeria in 1976, the old Western

State was split into Oyo, Ondo and Ogun states. It was then

decided that an investment holding company to be jointly owned

by these three states be established to own and manage the

various industrial and commercial concerns of the former

Western State. Later, Osun State, created in 1991 and Ekiti

State created in 1996 increased the Odu’a share holder states

to its present five. The South-West is considered as the

commercial hub of the nation. There exists a potential huge

market that could easily absorb any sharp rise in the quantum

of goods by the subsidiaries, particularly those involved in

the productive sector.1

The Western Nigeria Development Corporation created in

1959 had a clear interventionist strategy aimed at

spearheading agricultural and industrial development of the

region2 as well as to provide the sort of long-term funds

essential for the inducement of a nascent industrial class.3

Most of the assets of Odu’a Conglomerate started with the

investments made by the Western Regional government through

the Western Nigerian Development Corporation, which purchased

the firms of G.L Gaiser, Ikeja Arms Hotel (later named Airport

Hotel) and Arab Brothers Motors Limited. Other investments

were Agbon –Magbe Bank, the Merchants bank.4 The banking

system as of the time was averse to helping to create an

1 Alabi L 2011, Jobi Fele, a man with a Plan The Guardian, April 4 p272 Aregbesola R “Odu’a Redefining A Conglomerate” Available at http://ondostatevoice.com/news/odua-redefining-a-conglomerate-610.htm Accessed 1/5/20133 Aregbesola R “Odu’a Redefining A Conglomerate” Available at http://ondostatevoice.com/news/odua-redefining-a-conglomerate-610.htm Accessed 1/5/20134 Osuntokun A, 1984. Chief S.L.A. Akintola : His Life and Times Frank Cass and CompanyLimited, England p 82

indigenous entrepreneurial class. The capital that was

available went either to the burgeoning colonial companies or

to the Lebanese. The Western Regional government therefore had

to take the initiative by organizing its own interventionist

agencies. Amongst these were, the Cooperative Bank, the

Western Nigeria Finance Corporation and most strategically

important of all, the Western Nigeria Development Corporation.5

Historically, the processes that have culminated in the

creation of the 36 states and Federal Capital Territory (FCT)

in Nigeria are the result of a complex political arrangement

and rearrangement, rather than a search for economic

efficiency in the application of the principle of

subsidiarity.6 State creation helped a lot to fragment the

erstwhile regions and disintegrate rather than unify. With the

atomization of the western states in 1976 by the military

government, the conglomerate took over the business interest

of those states collectively. The conglomerate’s interests

cover virtually every sector of the economy as reflected in

her diversified nature of investments. These

include integrated textile mills, breweries, commercial

banking, insurance, real estates and livestock rearing,

fisheries services, carbonated drinks, food and beverages,

industries and manufacturing in chemical and mechanical

industries, hotel and catering, vehicle distribution and,

bottling and marketing of liquefied petroleum gases, printing

5 Aregbesola R “Odu’a Redefining A Conglomerate” Available at http://ondostatevoice.com/news/odua-redefining-a-conglomerate-610.htm Accessed 1/5/20136 Development Agenda for Western Nigeria Executive Summary

and publications, among others. The legendary Cocoa House is

one of the main assets of the group, while in the hospitality

industry, the company could boast of Lafia Hotel, Premier

Hotel and Ikeja Airport Hotel, Lagos.7

The turnover from all these investments has direct

consequences on the social and infrastructural developments of

the member-States. For instance, it has assisted in creating

more jobs in the South-West including scholarships for

indigenous students of owner-States in Nigerian tertiary

institutions and opening up the rural areas for cottage

industries that would rely on agricultural raw materials.

Over the years, the conglomerate lost some assets and

investments to mismanagement of the military administrators of

the member-states. For example, the once vibrant voice of the

people, which was a veritable source of employment and means

of livelihood for thousands of people, Sketch, has become

liquidated. Yet, it is one of the institutions inherited by

the Yoruba political leadership to serve the economic,

political and social interest of the people of the western

states. Similarly, Wema Bank, a member of the conglomerate,

has somersaulted from being a national bank to a regional one.

Be that as it may, there are further developments and new

innovations by the company to bring about improvements and

meet the raison d’être of the Yoruba leaders whose ideals and works

have been inherited. For example, the Odu’a Telecoms, also

known as O’Net was established in 2003. Although it suffered7 Oderemi, K , 2012 Existing Structures And S/West’s New Development Agenda Saturday Tribune March10 , p 18

setbacks, it was brought back to life in 2012. Other

innovations include the establishment of the Farmers’ Academy

and a host of others, which shall be subsequently examined in

this work.

Statements of the Problem

Studies have been carried out on the economic, social

and political development of South Western Nigeria. In

explaining these developments, these studies have variously

examined the governance of the region, the Awolowo/Akintola

feud, the cocoa and its general economy. However, the core

motivations of this study, which examines the historical

development of Odu’a Investment within the purview of the

region’s economic and social history, are the economics and

industrialization of western States and their concomitant

effects on the social history of Western Nigeria. No

historical study has examined the historical relevance of

Odu’a Investments not only to the development of owner-states,

but also to national development.

Research Objectives

The study’s objectives are to

1. Trace the historical evolution of Odu’a Investments

2. Examine the development of Odu’a investment

3. Examine the various divisions of the Company

4. Analyse the strength and weaknesses of OICL

5. Discuss the impact of Odu’a Investments to both regional

and national development

Methodology

The study adopts a historical analytical approach.

Primary sources, especially archival materials are collected

at the Ayo Ogunsheye private archives, Ibadan, Newspapers and

Magazines including newspapers and hansards of the Western

Nigerian House of Assembly. Relevant secondary sources are

collected from the Kenneth Dike Library of the University of

Ibadan, IFRA Library, University of Ibadan and the Oyo State

Parliamentary Library. Internet materials are also utilized to

examine the topic under study. Furthermore, an extensive

fieldwork is embarked upon in the study area. This involves

oral investigation in the form of interviews conducted in the

owner states of Odu’a Conglomerate with adequate attention

being given to the locations of both the erstwhile investments

and present investments of the company. Materials and evidence

collected from both the primary and secondary sources are

subjected to critical historical analysis in order to provide

insights into the historical and contemporary dimensions of

the subject matter, including leadership activities both at

the regional, states and company administration level. This

presents a coherent and analytical account of the study.

Generally, the three stages of historical methodology adopted

include gathering of sources, interpretation of the sources

and explanation of the sources.

Justification of the Study

The thesis is considered necessary because it historicizes the

contributions of the erstwhile investments of the defunct

Western Region to national development. Such a study could

also be of benefit to scholars in the field of economic and

social history of Western Nigeria.

Purpose of the Study

The issue of economic development of the western region

is very topical. Thus, it has been a perennial theme in books

and journals. However, there are still some salient issues

concerning the Western Nigerian region and states that have

not been exhaustively discussed. For example, the effects of

such economic development on the industrial and social

development of Western Nigeria are yet to receive scholarly

examination.

The emergence of this new historical angle implies that

research on the Western Region and Western Nigeria is far from

finished. Therefore, the purpose of this work is to

investigate the properties and investments of the Western

Region encapsulated in Odu’a Group between 1976 and 2012. This

is with a view to highlighting the economic, political,

historical and socio-cultural relevance of the Odu’a

conglomerate. In addition, the study highlights the new trends

and further developments in the conglomerate in terms of

establishments of new subsidiary companies and other

achievements. The study also examines the shortcomings and

challenges of Odu’a Group.

Periodisation

This study covers the period c. 1976 – 2012. The year

1976 marked the effective commencement of Odu’a Group while

2012 was the year in which OICL introduced Small- Scale and

Medium Enterprises (SMEs) into its agenda and the period in

which the south-western state governors made a call for the

kind of regional integration that existed in the First

Republic.

The Study Area

The work is based on the south-western states, a

constituent part of the present day political structure of the

Nigerian Federation. These states include, Oyo, Ogun, Ondo,

Osun and Ekiti where Odu’a Group has one asset or the other.

It would be recalled that at the creation of 19 states in

Nigeria in 1976, the old Western State (created from the

existing four regions in 1967 during the military

administration of Gen. Yakubu Gowon) was split into Oyo, Ondo

and Ogun states. Osun State was created in 1991 and Ekiti

State in 1996. All these are owner-States of the conglomerate

as well as well as shareholders. However, special attention is

given to Ibadan, Oyo state, being the headquarters of the

conglomerate.

Literature Review

It is essentially important to trace the linkage of any

research undertaking through previous studies. This is largely

premised on the fact that any researchable problem cannot be

studied in isolation. In this regard, several works on the

economic history of Western Nigerian investments are reviewed.

It has to be pointed out that not much scholarly work has been

done on Odu’a Investment Company Limited as a State Owned

Enterprise (SOE). However, much research has been carried out

on SOEs in Nigeria generally leaving a lacuna for further

research on subjects like OICL

The applicability of a particular theoretical framework

to industrial development largely depends on specific

strategies adopted by individual governments. Undoubtedly,

policies are designed to expedite economic progress and

industrial development. Such industrial developments will in

turn affect the socio-cultural make up of the citizenry.

According to Mehran Kamrava in his work Politics and Society in the

Developing World (2nd Edition) (2000), Third World governments

use a variety of vehicles in order to achieve development

objectives and carry out industrial policies. Such means

include among others, state agencies and public parastatals,

multinational corporations and to a lesser extent, smaller

workshops and privately owned enterprises. One of the

prevalent tactics used in seeking to expedite development is

nationalizing key industries and bringing them under direct

government control, a frequently used tactics in newly

independent states in the 1960s and 1970s.8. In view of this,

Akinjide Osuntokun, in his book, Chief S.L.A. Akintola : His Life and Times

(1984) clearly shows how the Western Regional government

established state owned investments as a development strategy.

According to him, although sometimes, such establishments were

politicized for instance, the “Coca Cola War” between Chief

Awolowo and Chief Aknitola and the citing of industries in

8 Kamrava Mehran, 2000, Politics and Society in the Developing World (2nd Edition) Routledge, Taylor and Francis Group London and New York p.38

less productive areas, still, industrial goals were achieved

with concomitant positive effects on the people.9

While much has been written on the political, economic

and social history of the Western Region, relatively few

monographs have been published about the Odu’a Investment

Limited; the only strand of economic integration left of the

erstwhile Western region. The majority of existing literature

specifically dealing with the Western Nigeria is periodised up

to the 1960’s before the region became defunct. Until

recently, works concerning the Western Region sought to

explain it only through the political and economic standpoints

with preference for the developments that took place before it

was split into different states, with less attention to what

became of the investments and ventures of the former Region.

Continued examination of the existing literature on issue

relating to the Western Nigerian Region as well as the

emergence of new theories and angles will ensure that the

legacy bequeathed to the Yoruba nation by the founding fathers

will not be forgotten. Ugbogu, M.C., while analyzing the

Western Region government approach to the Region’s development

in his work The Management of Public Enterprises in the Western Region of

Nigeria 1946-1966 reported that the government under Awolowo

chose to adopt socialism as being advocated by Awolowo himself

who had argued that the state must adopt socialist approach to

solving its social needs. That is, it must develop social

infrastructures that would aid acceleration of commercial and

industrial transformation of the society and in turn would9 See Osuntokun A 1984. Chief S.L.A. Akintola : His Life and Times Frank Cass and Company Limited, England

reduce unemployment. Under this approach, the factors of

production must be under the control of the state, which

should control the industrial sector of the economy to ensure

the maximum utilization of linkages for generation of

employment and induce high productivity.10 However, this work

fails to underscore the multiplier effects of this strategy

adopted by the regional government.

In his 1973 book An Economic History of Nigeria 1860-1960,

Olufemi. R. Ekundare, presents a graphic economic history of

Nigeria with emphasis on economic development at both the

regional and national levels. The study although generally

focuses on the economic history of Nigeria, it historicizes

the economic development of Western Nigeria from colonialism

to the acquisition of most of the assets of the Western

Region.11 These assets are the frames that have now become the

major investments of Odu’a Group within which this discuss are

cramped.

Akinjide Osuntokun’s Chief S.L.A. Akintola : His Life and Times

(1984), is especially significant because it explains the

political development particularly the Akintola/Awolowo feud

from both political and economic standpoints. He contends that

some of the assets acquired by Western Nigerian government

were politically motivated. For example, in 1959, Chief

Obafemi Awolowo, the Leader of the Action Group established

the Western Region Development Corporation with the aim that10Ugbogu. M. C.,2012 “The Management of Public Enterprises in the Western Region of Nigeria1946-1966” Unpublished Ph.D Dissertation, History Department, University ofIbadan. pp. 1&2. Also see Sklar. R. L., Nigerian Political Parties: Power in anEmergent African Nation. Africa World Press, (Trenton and Eritrea), 2004, p272-311 See Ekundare R O., 1973 An Economic History of Nigeria 1860-1960 Metham and Company Ltd. London

the Corporation would spearhead agricultural and industrial

development of the region.12 Under this Corporation in 1962,

projects such as the Ikenne Rubber Plantation, located in

Awolowo’s hometown even against expert agricultural advice

were embarked upon. 13 We can therefore, argue that some of the

western Nigerian assets had stopped functioning even before

the advent of Odu’a Investments Limited.

David Aworawo (2011) examines the pattern of the

development of technology and industrialization in the country

in the colonial period and the influence on industrial policy

after independence. He reports that the government of Western

Nigeria had established the WNDC which had been involved in

industrial manufacture since 1954. Apart from this, the

Western Region embarked on the development of infrastructure

on a large scale which was aimed at providing a boost to

industrial production.14

The Odu’a conglomerate had its origins within the

framework of the federalist structure of the 1950’s and the

1960’s. The regional government in the Western region as of

that time realized that there was a need for direct government

intervention through an active industrial policy.15 David

12Osuntokun A 1984. Chief S.L.A. Akintola : His Life and Times Frank Cass and Company Limited, England p 8313Osuntokun A 1984. Chief S.L.A. Akintola : His Life and Times Frank Cass and Company Limited, England p82 14 Aworawo David, 2011“Costly Neglect: Technology, Industrialisation and the Crisis of Neglect in Nigeria” The Journal of International Social Research Vol. 4,Issue 17, p.23515 Aregbesola R, Odu’a Redefining A Conglomerate” Available at http://ondostatevoice.com/news/odua-redefining-a-conglomerate-610.htm Accessed 1/5/2013

Aworawo (2011) reinforces this submission in his argument that

the post World War II attention to the production of goods in

Nigeria, especially those materials in which raw materials

were available resulted in the establishment of many new

factories in the 1950s. This received boost from 1955 onwards

following the introduction of the Lyttleton Constitution in

1954, which transferred the responsibility of industrial

development to the regional government. The Nigerian leaders

who assumed responsibility for administering the regions saw

industrial development as a way of stimulating industrial

development. They therefore, introduced policies and

incentives to encourage investors. Some of these included the

provision of finance in form of loans to assist private

entrepreneurs.16

Indeed, the Western Nigerian Regional government did not

only invest in infrastructure and trade, education was a

legacy inherited by the western states of Nigeria. S Ademola

Ajayi’s conclusion in his work “Christian Missions and

Evolution of the Culture of Mass Education in Western

Nigeria” (2006) demonstrates that education scheme in Western

Nigeria is a form of social and economic investment, the

benefits of which seem to justify the enormous sums of money

spent on it. Based on the above, according to him, it follows

that a growing proportion of the population of Western Nigeria

16 Aworawo David 2011“Costly Neglect: Technology, Industrialisation and the Crisis of Neglect in Nigeria” The Journal of International Social Research Vol. 4,Issue 17, 2011 p.235, pp 272-273

was likely to make better materials for modernization.17 The

legacies, which made the former Western Region of Nigeria

first among equals, were in the areas of education,

agriculture and food security, industrialization, employment

generation, and massive physical and social infrastructures

development.

Bolanle Awe (2007) and Bisi Ogunfowora, in their

separate monographs underscore the impact of the Western

Nigerian free education scheme to both human and economic

development of the region.18 Awe argues that the introduction

of the 1951 Macpherson Constitution, which divided Nigeria

into three regions, North, West and East as well as well as

the provision that placed education on the concurrent list

encouraged the regional governments to legislate on education

particularly at the primary and secondary levels. This

provided the opportunity for the launching of Western Region’s

primary education programme and funded by the proceeds from

the WNDC.19 To this end, this work will examine the

contribution of Odu’a group in the educational development of

owner-states.

17 Ajayi. S. A., 2006, “Christian Missions and Evolution of the Culture of Mass Education in Western Nigeria” Journal of Philosophy and Culture, Vol. 3, No. 2, June 18

See Awe B, 2007, The impact of Obafemi Awolowo’s free education in Nigeria Nigerian tribune October 16, 2007 and Ogunfowora Bisi “ Who Will Save Awo's Agro-Economic Legacies In Ogun State From Total Destruction” Available at http://saharareporters.com/article/who-will-save-awos-agro-economic-legacies-ogun-state-total-destruction-prof-bisi-ogunfowora Accessed 15/5/201319 Awe B, 2007,The Impact of Obafemi Awolowo’s Free Education in Nigeria” Nigerian tribune October 16 p23

By the same token, agriculture was identified as the

greatest strength of Western Nigeria. The revenue from

agriculture was used in providing infrastructure create

revenue for government’s operational running. Such revenue was

tied to projects that provided recurrent revenue that was used

for running the government, and strategically, the western

Nigerian government started developing complexes, industrial

estates, recreational services and other services like which

became the inheritance of the South Western States.20

Ibadan, being the capital of the Western Provinces as

well as the Western region was the centre of activities of the

Western Region’s investments. Indeed, the city is strategic to

the Odu’a conglomerate. Extant literature exists on the

political, economic and social history of Ibadan. Justin

Labinjo (1991) reports that Ibadan brought in larger revenue

than any other province in the western region. Ibadan served

as the capital of Western Region from 1951 and the whole of

South-West from 1946.21 With its strategic location on the

railway lines linking Lagos to the north, the city was a major

centre for trade in cassava, cocoa, cotton, timber, rubber,

and palm oil. The main industries in the area were tyre,

rethreading, cigarettes manufacturing and food processing. The

International Institute of Tropical Agriculture located its

investment in Ibadan. 22 Laurent Fouchard’s research, “Urban

20 Jimoh A 2010 “Odu’a Will Provide Platform for Agric and Industrial Growth “ Nigerian Tribune October 18,p 32 21Labinjoh Justin, 1991, Modernity and Tradition in the Politics of Ibadan: 1900-1975 Fountain Publication, Ibadan, Nigeria p5122 Oyedele, O 2012, “Let’s Re-act Western Region Era Show” The Punch March 7,p29

Slum: The Case of Ibadan” (2003) describes Ibadan as an

emporium consequent upon the construction of railway to the

North, which reached Ibadan in 1901 and all road traffic from

Lagos to the North that converged in Ibadan. The city became

a major point of bulk trade. Its central location and

accessibility from the capital city of Lagos were major

considerations in the choice of Ibadan as the headquarters of

the Western Provinces, which became the Western Region of

Nigeria in 1952.23

The western regional government embarked on state-led

development just like the rest of the newly independent

African states. Nellis, J. justifies this assertion in his

work: “Back to the Future for African Infrastructure? Why

State-Ownership Is No More Promising the Second Time Around”

(2006), with the conclusion that Africa opted for socialism

immediately after independence. The majority of Sub-Saharan

African states came into existence in the 1960s, following

struggles and negotiations with the colonial powers. At

independence, most African governments inherited the notion

that extensive public sector involvement in the economy was

the natural, proper order of affairs. Colonial regimes,

especially after 1945, had created and run economic planning

agencies, agricultural marketing and stabilization boards, and

industrial and infrastructure parastatal enterprises. They had

instituted wage and price controls, and generally intervened23 Fouchard, L, “Urban Slums Report: The Case of Ibadan” in Understanding Slums: Case Studies for the Global Report on Human Settlements 2003 Available at http://www.ucl.ac.uk/dpu-projects/Global_Report/pdfs/Kolkata_bw.pdf Accessed 22/6/2013

in a large number of economic activities. Thus, most of the

African leaders that came to power in the 1960s were

accustomed to a high level of economic intrusion on the part

of government.

Moreover, many if not most of the new African leaders

were ideologically predisposed to government control of the

economy’s “commanding heights.” In large part, this was

because they saw a close link between liberal capitalism and

colonialism and imperialism. The prevailing intellectual

climate in the schools they attended and the circles they

mixed in, at home and abroad, was leftist and statist; social

democratic at least, and often more overtly “scientific”

socialist. Africans who spent time in Europe, following World

War II, noted the strong association between membership in

left parties and organizations and opposition to colonialism.24

This view was supported by Sklar R in his analysis of

political parties in western Nigeria in a book titled: Nigerian

Political Parties: Power in an Emergent African Nation (2004). He contended

that the state-led economic and industrial development

embarked upon by the Western Regional government hinged on the

regional party ideology. To this end, the social philosophy of

Action Group (AG) centrism may be described as “principled”

welfare statism to distinguish it from the “pragmatic” welfare

statism of the right wing. In the decade prior to

independence, no political party in Nigeria rivaled the Action

24 Nellis, J.,2006, “Back to the Future for African Infrastructure? Why State-Ownership Is No More Promising the Second Time Around” Working PaperNumber 84 February

Group’s distinctive emphasis on social and economic planning.25

The Western Regional government therefore had to take the

initiative by organizing its own interventionist agencies.

Amongst these were, the Cooperative Bank, the Western Nigeria

Finance Corporation (WNFC) and most strategically important of

all, the Western Nigeria Development Corporation.

Adeyemo, D.O., in his work titled “A Review of

Privatisation and Public Enterprises Reform in Nigeria”(2008)

he contends that OICL is a salient example of State Owned

Enterprises (SOEs) in Nigeria established to propel socio-

economic development and to guard against the control of the

economy from foreign domination and exploitation.26

In the same vein, Emeh, I.E. J’s “Understanding the Poor

Performance of Nigerian Public Enterprises Focusing on the

Theories of Administrative Weaknesses” (2012) identifies two

forces which gave birth to the establishment of public

enterprises in Nigeria. These forces are, political and

economic: - During the colonial era, Nigeria’s posture at the

international market was reckoned with in terms of

agricultural products; hence the colonial government of the

time saw the need to develop infrastructural facilities to

meet the needs of the economy. It was perceived that these

infrastructures will hasten the transport of the agricultural

products to the ports for subsequent overseas export. After

independence there was an increasing trend in the

25 Sklar. R. L., 2004, Nigerian Political Parties: Power in an Emergent African Nation.Africa World Press, (Trenton and Eritrea), P.26826 Adeyemo D.O., 2008, “A Review of Privatization and Public Enterprises Reform in Nigeria” Contemporary Management Research Vol. 4, No. 4, December

establishment of public enterprises. For instance, the second

national development plan (1970-1974) emphasized the role of

public sector in Nigeria’s march to economic development in

which case the emphasis on the public sector of the economy

became the focus of the state. The reason for assumption of

this greater role in the development of state economy after

independence was to consolidate the political independence and

to maintain control over national resources and foreign

enterprises which tended to be monopolized. One of the

economic forces that led to the evolution of the public

enterprises in Nigeria is the agricultural commodities trade

era. During this period semi autonomous institutions were

created to engage in development activities. They were

financed from funds generated during the commodity boom era.

An example is the various regional housing corporations of the

early 60’s and the marketing boards. Thus, with the

availability of huge investible funds, the government of

western region did not only expand the scope of its utility

services, it also engineered and controlled the commanding

heights of the economy27

Enterprises increasingly became a tool of government

intervention in the development process at the twilight of

independence. In effect, the SOEs in Nigeria played crucial

roles in Nigeria’s quest for national economic independence

and self reliance. So, most of the SOEs established operated

as quasi commercial organisations established by the state to

27 Emeh, I, Eke J. 2012“Understanding the Poor Performance of NigerianPublic Enterprises Focusing on the Theories of Administrative Weaknesses”Interdisciplinary Journal of Contemporary Research in Business September Vol. 4, no 5

facilitate development. According to Imhonopi D, and Ugochukwu

M.U, (2010)28 this is in line with the proposition of state

theorists who believe that the state is given a key role to

play in the development of the institutions within developing

countries. The State theory principally believes that

economic self-reliance can be internally achieved and

sustained when states are committed to their development

process. Investment in infrastructure at this stage was

crucial to lay the groundwork for further investment and this

can only be handled by the state.

Abdullahi M Y, et al (2006) classified public enterprises

into three in their book titled: Public Service Provision. These are

public/statutory corporations, state-owned companies, and

mixed economy enterprises. Public/Statutory Corporations are

enterprises, which arise when the government assumes

responsibility for the management of an economic or social

pursuit through a special entity that has its own legal

personality and still keeps some of the special prerogatives

or privileges associated with a governmental organisation. The

blend of these features is aimed at enabling the organisation

to function effectively as an autonomous body while it remains

an instrument of government policy. Enterprises that fall

under statutory corporations include Central Bank of Nigeria

(CBN), Nigerian Television Authority (NTA) and Federal Radio

Corporation of Nigeria (FRCN) among others.

28 Imhonipi D and Ugochukwu M U 2010, “A Sociological Appraisal of EconomicSelf-Reliance: The Failure of State-Owned Enterprises in Nigeria” International Journal of Sociology and Anthropology Vol. 2(10), pp. 236-243, December

The State Owned Companies are companies created by

government under the provisions of ordinary company law,

though they belong entirely to the government. They are

registered in the registry of companies, with the government

as the sole proprietor. Government, therefore, appoints the

Board of Directors as is customary in private companies.

Example of such companies include New Nigeria Newspaper Ltd,

New Nigeria Development Company Ltd and Odu’a Investment

Company Ltd.

Mixed-Economy Enterprises are enterprises where the

government is the majority shareholder in a partnership with

private entrepreneurs. In such companies, government usually

dominates the board since it is the major shareholder. One

example of such enterprises is Peugeot Automobile Nigeria Ltd.

(PAN).29

Idowu, N.O and Fatunla G. T (1992) threw more light on

the second classification of SOE, upon which this work will be

based. Their work: The Report of the Technical Committee on the

Restructuring of ODU’A Investment Company Limited suggested that even

the government goes into corporate entrepreneurship as they

set up companies e.g. Ondo State Investment company Ltd and

its subsidiaries like Owena Int. Hotel, and also the Odu’a

investment Company Ltd with its numerous subsidiaries whose

entrepreneurial activities cut across many sectors like

banking, insurance, property and estate, fisheries,

construction, hotels, printing and publishing.30

29 Abdullahi Mohamed Yamma, Martha Oruku, . and O. J. 2006, Onwe PublicService Provision National Open University30 Idowu N. O. Fatunla G. T. 1992 The Report of the Technical Committee on the Restructuring of ODU’A Investment Company Limited.

Ugbogu, M., in his recent research argued that the three

major public enterprises in Western Nigeria namely the Western

Region Marketing Board, the Western Region Finance Corporation

and the Western Nigerian Development Corporation were the

“media of economic development” of the Region. He reported

that the economy of the Western Region was primarily based on

direct investment by the state.31

Imhonopi D, and Ugochukwu M.U’s assessment of SOEs in

Nigeria suggests that these establishments have failed in

various degrees. The work also gave reasons for the weakness

and inefficiency of these institutions contending that this

failure has continually necessitated the deployment of

different interventionist models such as privatisation to

bring them back to life.

In the case of OICL, Mabogunje in his presentation,”What

is in a Name: Odua’s Heritage and Managerial Practice in the

1990’s” underscores the inevitable failure of OICL owing to

the neglect it had suffered from the owning states.32

31 Ugbogu. M. C., 2012 “The Management of Public Enterprises in the WesternRegion of Nigeria 1946-1966” Unpublished PhD Dissertation, History Department, University of Ibadan. p.3332 Mabogunje A.L, “What is in a Name Odua’s Heritage and Managerial Practicein the 1990’s A paper delivered at the 2nd Odu’a Distinguished Lecture heldat the Premier Hotel, Ibadan on Thursday, October 31, 1999.