Home Government Public Corporations: Types, Functions, Characteristics & Structure

Public Corporations: Types, Functions, Characteristics & Structure


Public corporations are government-owned establishments and enterprises established through the acts of parliament or statutes, decrees or edicts to provide-essential social and welfare services to the people.


Examples are the Power Holding Company Nigeria (PHCN), Nigerian Ports Plc, Nigerian Railway Corporation (NRC), state water corporations, state transport corporations and state-owned banks.

Types Of Public Corporations

There are two main types of public corporations in Nigeria and they are:

1. Those providing essential services like water corporations, National Electric Power Authority, PHCN, Federal Housing Authority and Nigerian Ports Plc.

2. Those of commercial nature like state owned banks, hotels, textile mills, insurance companies and transport services.

Purposes And Functions Of Public Corporations

  1. Public corporations are established to provide essential services such as electricity, water and postal services at reduced cost. These services involve huge capital involvement and are being subsidised by the government. They could be out of the reach of most citizens if carried out by private enterprises.
  2. Public corporations provide employment opportunities for very many citizens, especially professionals whose fields relate to the specialty of each corporation, e.gi journalists with broadcasting corporations.
  3. Public corporations are established to prevent discrimination and exploitation of citizens in the provision of mostbasic needs like water and electricity-which would have happened if left to individual concerns.
  4. The intervention of the government through public corporations prevent concentration of enormous wealth in the hands of a few.
  5. Public corporations undertake strategic projects for security reasons and in the national interest. The government, for instance does not allow private citizens or foreign investors to mint currencies, control telecommunication facilities, produce arms or operate air or seaports.
  6. Public corporations generate funds for the government through the services provided for the citizens. For instance, the citizens pay for boarding Nigeria Airways planes, mass transit buses, as well as the services provided by the railway corporation.
  7. Public corporations in Nigeria are used as a machinery for providing rapid socio-economic development of the country. For instance, these corporations supply electricity, gas, petroleum, steel and telecommunication facilities to the different parts of the country, thereby opening the country up for industrial and economic development.
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Characteristics Of Public Corporations

  1. Public corporations are state owned and created through acts of parliament, decrees or edicts which state their structure, powers and functions.
  2. Public corporations are legal entities which exist on their own, can sue and be sued, hold property and enter into contracts.
  3. They are often administered by. a board of directors which is responsible for policy making and control. The board members are usually appointed by the minister whose ministry supervises the corporation.
  4. Public corporations are independently financed through the revenue generated from their services rendered to the people and loans obtained for economic ventures. They also receive subventions from the government in order to complement the efforts of the government in the provision of social amenities to the citizenry.
  5. The employees of public corporations are not civil servants but are directly employed and work according to the rules and conditions of service determined by the corporations.
  6. Public corporations in Nigeria are not always subjected to the same financial scrutiny as government departments.
  7. Even though they are not established for the purpose of profit making, public corporations are expected to generate funds for the maintenance of their services.
  8. Public corporations are not characterised by bureaucracy or red-tapism as in the Civil service. They are noted for policy flexibility, quick decision making and immediate implementation of policies to enable them attain their objectives.

Structure and Organisation of Public Corporations

  1. The government takes charge of the policy making machinery of each public corporation through the minister, whose ministry supervises the corporation. The overall broad policies of the government are handed over to the board of directors for implementation.
  2. The board of directors are appointed by the government (through the supervising minister).
  3. The administrative control of a corporation is in the hands of the directors, who are free to run the affairs of the corporation in such a manner that they would attain the objectives of the government.
  4. The supervising minister does not participate in the day-to-day administration of the corporation, but links the corporation with government. He presents issues concerning the corporation in the executive council and makes sure the broad objectives of the government are catered for in the policies and programmes of the corporation.
  5. The board of directors can recruit their own staff, determine the conditions of service and relieve unproductive employees of their jobs, subject to the approval of the government.
  6. The management of a public corporation in Nigeria is headed by a chief executive, who may be called managing director or general manager, and supported by other staff.
  7. The chief executive and the staff translate the broad policy objectives of the board of directors into quick actions to enable them to attain the goals of the government.
  8. Each corporation is further divided into several departments, with supportive managers coordinating the implementation of board policies by their subordinate staff.
  9. They generate funds which enable them to provide services and maintain their facilities. Public corporations also receive government subsidies to complement their revenue in the process of providing essential services to the people.
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