WAEC Government 2010 Theory — Question 9

Model answer

Reasons for setting up public corporations in Nigeria: (i) Provision of essential services: public corporations are established to provide essential services to the people at lower cost. Such services, if left to private corporations, will be beyond the reach of the common man. (ii) Employment: the setting up of public corporations provides the citizens of a country with employment opportunities, as many people will find employment in the public corporation established. (iii) Financial cost: public corporations are set up to provide services that require heavy financial cost, which may be too costly for other private companies. Such services as railways are provided for the government because it is too costly for private investors. (iv) To prevent exploitation of the citizens: the services provided by public corporations, if provided by private investors, would be too expensive. In order to prevent the exploitation of members of the public by private firms, public corporations are set up to provide services at lower cost. (v) Revenue generation: public corporations are also established by the government as a means of generating revenue for the government. Money paid by the people for services rendered by public corporations goes into the purse of the government in the form of revenue.