Adapalm Nigeria Limited was founded in 1975 by the old East Central State. It was transferred to the Imo State government after the splitting of the East Central State in 1976.
It sits on 4,300 hectares of land in Ohaji/Egbema Local Government Area and once employed nearly 1,000 workers.
However, the company began to struggle when the Imo State government indigenised it in 1987. Tribalism crept in and palm oil production fell.
It lay in ruins for years until 2011 when former Governor Rochas Okorocha decided to revive it. It handed it over to a firm named Roche Group, but the deal fell through.
Roche Group met a lot of debts. Workers had been owed for several years without pay. Small-scale millers who paid for fresh bunches from Adapalm did not get them.
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The company was later handed over to Imo-VTU, which could not clear the financial obligations. Roche Group eventually went to court to seek redress after the handover of the palm oil firm to Imo-VTU.
“This has become a big challenge to communities in Ohaji/Egbema. In Umuagwo, a lot of youths and millers whose money are stuck in Adapalm are no longer in business,” a small-scale miller, Lazarus Ifeanyi, told BusinessDay reporter when he visited Adapalm in 2018.
In 2022, the Imo State government said it was seeking an out-of-court settlement and was partnering with investors to inject N350 billion into Adapalm.
So, in 2025 when Indonesia-based Musim Mas Group is producing up to $10 billion worth of palm oil, Ada Palm is still struggling to find its feet.
Apart from Adapalm, Ajaokuta Steel is another important textbook example of how government-run businesses fail. Even when it does not produce, the federal government sets aside an annual budget for it. In 2025, it will get N2.6 billion allocation. It got N4.296 billion for personnel cost in the 2024 appropriation bill.
Charles Sanni, chief executive officer of Cowry Treasurers Limited, emphasised the inefficiencies inherent in government involvement.
“Government intervention weakens competitiveness and the private sector’s ability to thrive,” Sanni said.
He highlighted that the private sector, unencumbered by bureaucratic constraints, is better suited to handle financial crises and recover distressed assets efficiently.
The Asset Management Corporation of Nigeria (AMCON), known as a bad bank, has played a crucial role in salvaging businesses from collapse. However, some analysts say it is also another form of government interference in business, which is not sustainable.
“The government’s role should be to create a conducive environment for private sector growth, not to take over business operations,” Samuel Nzekwe, a financial analyst and former president of the Association of National Accountants of Nigeria (ANAN).
However, Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise, said it is important to realise AMCON’s critical role.
“We cannot overlook the role that AMCON has played in salvaging those banks and in preventing those banks from collapsing. And the impact that has had on the stability of the financial system, and depositors’ funds, which are very important.”
Yusuf however said AMCON does not have the capacity to directly manage those assets absorbed. “I know that they have also set a management structure to manage those assets,” he said.
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“But I think it would have been better to sell off those assets to companies that have the capacity to manage them, not to cannibalise them, to manage them and add some value to the economy by way of creating jobs and also boosting revenue through taxation,” he said.
According to Samson Simon, chief economist at ARKK Economics and Data Limited, the government – anywhere in the world and from time immemorial – has proven itself completely inefficient and incompetent relative to the individual or the business sector.
“Bringing government into economic activities is second best – in the event that the first best is not available,” the economic analyst said, explaining that government should only come in as arbiter, regulator, law enforcer and enabler of business.
“History has shown that markets are better off delivering results than what the government will ever do. Consequently, demand and supply should allocate resources and ensure productive as well as allocative efficiencies,” the university lecturer added.
Countries around the world have witnessed unprecedented development through the private sector-led economy by creating a level playing field for businesses to flourish.
While the Chinese government still controls critical industries, the private sector accounts for 60 percent of GDP and 80 percent of urban employment, according to China’s National Bureau of Statistics.
In the United States where free-market capitalism is overtly emphasised, government interference is limited. Regulatory frameworks are designed to promote competition and innovation while maintaining oversight.
This effort has seen the private sector contribute over 80 percent to GDP, and the U.S. consistently ranks high in the global competitiveness index, highlighting the rate at which businesses thrive.
Ibrahim Ayuba, a finance expert and associate professor at Abuja-based Mewar University, said the Nigerian government “seems to be extremely notorious” in running and managing business, emphasising the need for a legislation that prevents the private sector from being crowded out.
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“Despite vocalising the private sector as leading agents for driving growth, it hardly ever happens. More often, the private sector only second-guess government moves,” Ayuba said. “These kinds of actions deflate confidence in the economy.”
According to the World Bank, the private sector generates about 90 percent of jobs, 75 percent of investment, more than 70 percent of output, and more than 80 percent of government revenues in developing economies.
