The development of rural areas in Nigeria has been a forgotten challenge towards the betterment of rural living conditions of the grass root people and as well reducing rural – urban drift in the country.  The denial of opportunities for employment, high tendencies of poverty index and insecurity of lives and properties has silenced the unwavering impacts of public enterprises in ensuring effective rural development in Nigeria due to low attention paid at supporting rural development policies and programmes capable of giving rural dwellers a sense of belonging in the governance of the society. The study adopted social identity theory propounded by Henri Tajtel in 1978. The theory has it that the quest for development is to satisfy human needs and achieve positive self-esteem and self-worth which means that rural development in catering for social actions and changes in the life style of the rural dwellers is to ensure that life goes well with the people at the hinterland. Content analytical method was employed.  Secondary data was utilized in collecting relevant data from texts, journals, newspapers and magazines, periodicals etc in an analytical manner that is fruitful for the study. The result established that the poor performance of public enterprises in Nigeria towards effective rural development is as a result of lackadaisical approach employed by the government in the management of public enterprises in the country. The study further concludes that harnessing the development potentials of public enterprises towards rural areas is still a mirage since several policies aimed at rural development did not stand a test of time due to poor implementation, poor funding of the enterprises by government and other administrative hiccups. The study recommends that there should be adequate effort towards enhancing effective management of public enterprises so as to meet the rural development aspiration in Nigeria, there should be a stringent measure to handle the challenge of corruption among the public enterprises boards and other actors, and Government should make more effort at providing infrastructural facilities in the rural areas through public corporations etc.