THE IMPACT OF POOR REVENUE GENERATION ON THE PRODUCTION OF GOVERNMENT OWNED COMPANIES. CASE OF CDC TIKO

ABSTRACT

This work was aimed at investigated the impact of revenue generation on the production of government owned companies, the case of CDC. In an attempt to meet up with the broad coverage of the work, the study was thus broken down into three main objective which were; firstly, to study the different sources of revenue generation in government owned companies, secondly, to examine the problems faced by government owned companies in generating their revenue and the lastly to propose solutions used to solve problems of revenue generation in government owned companies. Purposive sampling was used as the sampling technique for the study. The data were analyzed using descriptive statistics and chi-square and the result interpreted therein.

It was discovered and concluded that there are no different sources of revenue generation by owned companies. Secondly, the study found out that there are problems faced by government owned companies in generating their revenue and lastly the study revealed that there are solutions used to solve problems of revenue generation in government owned companies.

The study recommended that the government should create an avenue where these state own companies can generate revenue from different sources and that the management of these state owned companies shouldn’t be left just in the hands of the management. The study also recommended that the government should give these companies  access to favorable policies such as: Tax breaks on certain products. Lower interest rates on loans from state-owned banks and etc. this would improve the their effectiveness and efficiency.

CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND TO THE STUDY

       This tells us about how government owned Companies raise their revenue. Also how government owned Companies use these revenues to carryout activities as well as the problems they encountered when generating their revenues.

      Furthermore, government owned Companies have different sources of revenue generation which varies from one company to another. For example Cameroon Development Corporation (CDC) Tiko.

     In the former West Cameroon, the first banana plantation was created in 1907 by Afrikanische Fraught A.G of Hamburg. It was 5000 hectares large and located around the Tiko plain. After World War II the German plantation was again donated to the CDC. Under the French mandate the former East Cameroon began banana production in 1931 at Penja.

    In 1987, the Del Monte Tropical Fresh Fruit Co ( DMC) contracted with CDC to open a new banana plantation in Tiko, even though CDC already had one in Ekona. The contract enquired CDC to provide land and labour, while DMC that is Del Monte provided capital, production, inputs, transferred technology, technical assistance and assured quality products.

    The fruits produced would be bought from CDC by DMC at free-on-board (FOB) price, if the quality specifications were met.

    CDC is an Agro-industrial complex that grows, processes and markets tropical export crops. On March 31st 2014, the CDC launched a new banana brand name known as “Tiko”. According to the General Manager of the CDC, Mr Franklin Ngoni Njie, “the Tiko brand is destined for the African Sub Region market for a start”. Cameroon Development Corporation (CDC) is an Agro Industrial Company created in 1947 as a public establishment to acquire, develop and operate extensive plantations of tropical crops.

It is a parasternal company owned by the state of Cameroon. Currently, its plantations over a total of approximately 41,000 hectares of land, 38,000 hectares of which is mature and of production stage.

  The corporation constitutes a workforce of close to 16,000 employees including temporal workers, making it the second highest employer after the state of Cameroon.

      Its major products include banana, semi-finished rubber, palm oil and palm kernel. Currently, it grows mainly rubber, oil palm and banana. It operates 9 rubber estates, 6 oil palm estates, 5 rubber factories, and 2 palm oil mills. Two banana projects are run in partnership with Demonte Cameroon. The corporation recently engaged in a number of extension projects to enhance its operations and productivity in the near future. These include 6,000 hectares of oil palm, 6,000 hectares of rubber plantations envisaged to be developed within the next 5 years and 1,750 hectares of solely CDC produced banana to be developed by the end of 2011. A 15 tons per hour modern oil mill project started in 2008 is also scheduled to be completed by end of 2009 and put into full operation.

       CDC is practically semi-independent in its operations. All the crop producing sectors are ably supported by several auxiliary services of the CDC. The administrative and financial affairs are coordinated by services at head office.

         The technical service departments offers civil, water, mechanical, electrical, and electronics engineering services.

          The medical and health services department provides medical and health services to workers and their dependents through 2 hospitals, 17 clinics, and 88 health posts. It also provides counseling and treatment of HIV/AIDS.

          The supply department manages all purchases, while the market and sales department carries out the commercial aspects.  There is also a logistic department that manages the transport fleet.

           The head office services include the General Manager’s office, Human resource, Finance, Management control, plan and development, communications, information systems, audit, industrial safety and security departments. The company’s operations management is directed by a General Manager and governed by a Board of directors headed by a chairman.

         From its plantation production, CDC processes and markets banana, palm oil and semi-finished rubber. The rubber and banana are mainly exported while the palm oil is mostly consumed locally.

         Since its inception, the company has gone through many challenges in ensuring its sustenance and as such adopted several development and management strategies to uphold its ideals.

The privatization of the corporation announced at the end of 1993/94 financial year effectively started with the taking over of the Tea department in 2002 by Cameroon Tea Estates. While waiting for a follow up on the rest, the present management of the corporation is sparing no efforts to manage the remaining crop groups and service departments as profitably as possible.

        As part of its initial objectives, CDC provides a lot of social and economic amenities to its workers and the public in general such as medical care, housing, road infrastructure, sports, and other adhoc support to community development.

      The overview of the Cameroon Development Corporation since its inception has been one of responding to socio- economic changes, recognizing, rewarding and promoting the Cameroonian worker. The management and workers of this corporation are today more determined to preserve this legacy.

       Cameroon Development Corporation motto is: ” Quality, Progress,Vitality”.

    CDC Tiko produces palm oil, rubber and banana, palm kernel.

     The researcher’s reasons for this project is to know the issues that causes the problems of revenue generation in government owned Companies.

1.2 STATEMENT OF THE PROBLEM

       Over the years the problem of revenue generation in government owned Companies has been a major hindrance in development in government companies.

     There can’t be a smooth running in the government owned Companies when the revenue are having problems.

    As there are many sources of revenue generation in government owned Companies from different organizations such as the researcher’s case study, there are also management problems hindering effective collection of resources. They are as follows;

   They can encounter insufficient working  materials eg workers dealing with dangerous chemicals like Canta  suffer from this because they aren’t given protective equipments to use when handling chemicals that is the PPE which means ” Private Protective Equipments”. By so doing if they aren’t given those equipments they will fall sick if those chemicals gets directly to their bodies. So the company should ensure their safety by providing them which those materials.

Also, workers walking inside of grasses eg those clearing and planting they should be given rain boots to avoid snake bites and any other dangerous animals and insects, if they dont do such , it will slow down productivity.

Also, there is a problem of  Insufficient personnel trucks to carry personnels to work from bus stations to their various working sites. This causes most workers to come to work and start their work late since they arrived late due to lack of trucks. So the company should ensure that there are sufficient trucks available to pick  up workers from the bus station as well as takes them back when its closing time.

  Furthermore, they should ensure that when the trucks gets bad, others trucks should be available to come carry the workers to work by so doing it will ease stress and avoid late comings which will enable them to come early and yield more productivity.

   In addition to that, there Companies suffer from insufficient labour force that is, there are times that there is no labour so the management of the company tries to use less labour to produce more thus, causing workers to be so fatigue others getting sick since they have over worked themselves more than their capacity. So the company should ensure to avoid this to ensure a smooth running of the company.

1.3 RESEARCH QUESTIONS OF THE STUDY

     The research questions that will guide this study are;

1) What are the causes of revenue generation in government owned Companies?

2) To what extent will it be possible to solve problems of revenue generation to government owned Companies?

3) What effect does problems of revenue generation of government owned Companies have on the company?