Abstract

State-owned enterprises (SOEs) have long served as instruments of economic development in Nigeria, yet their effectiveness and sustainability remain uncertain. This study reassesses the performance of twenty-five (25) State government-owned enterprises established between 1962 and 2018, using secondary data drawn from official records, archival reports, and published literature. The research finds that only 5 (20%) of enterprises remain operational, and they are primarily those restructured under privatization/outright sale, or leasing arrangements. Another four that are actively supported by government subvention payments, since the government sees them as essential services, are also still active. The findings underscore the institutional and governance failures embedded in state ownership, highlighting political patronage, managerial inefficiency, and policy inconsistency as key determinants of business collapse. The study applies Agency Theory, Public Choice Theory, Institutional Capacity Theory, and Public Value Theory to explain these outcomes. Findings indicate that sustainability improves significantly where private-sector efficiency complements public oversight. The paper concludes that subnational governments should transition from direct ownership toward regulated partnership frameworks, supported by transparent legislation and institutional reforms. This principle will also apply to national enterprises such as crude oil refineries under the Nigerian National Petroleum Corporation Ltd. (NNPCL). The results offer policy insights for strengthening enterprise governance and achieving sustainable development across Nigeria's federating units.

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