POLITICAL INSTABILITY AND THE PERFORMANCE OF PUBLIC ENTERPRISES IN NIGERIA: A CASE STUDY OF NIGERIA POSTAL SERVICE (NIPOST)

Abstract

Public enterprises play a critical role in the socio-economic development of many developing countries like Sub-Saharan Africa. These organizations are often at the forefront of providing essential services and facilitating national cohesion. However, enterprises face a myriad of challenges, including economic shocks and governance problems. This paper undertakes a case study of the effect of political instability on the service efficiency, administrative capacity, and financial performance of public enterprises. The study focuses on the Nigeria postal service (NIPOST) in the period 2015-2024. The paper uses a mixed-sequential methodology to test the theoretical framework of Public Choice theory and Neopatrimonialism. The research question guides the paper: how does political instability affect the operational performance of public enterprises? A case study of NIPOST evaluates the effect of political instability on public enterprises using audit reports, budget approval data, and service performance indicators at the geopolitical zone level. The analysis reveals that political and administrative instabilities in Nigeria significantly influence the capital budget, strategic planning, and operational efficiency of NIPOST. The paper finds that frequent ministerial changes, policy inconsistency, and patronage practices undermine enterprises’ ability to deliver on time and cost-effective services to the masses. For instance, changes in Postmaster-General and Postmaster-General General positions impede the effective implementation of the digital post office plan and postal banking. Moreover, parliamentary and ministerial oversight of the enterprise’s tariffs and commercial activities reduces its competitiveness in the market. Overall, the paper recommends insulating public enterprises from political pressures and enhancing autonomy in decision-making to improve operational performance.