Theory question 108
Business Organisations(a) What is privatization?
(b) Give four reasons for government participation in economic activities in your country.
Show the model answer
Model answer
(a) Privatization is the transfer of ownership and control of government-owned enterprises, wholly or partly, to private individuals or companies.
(b) Any four: to provide essential services that private firms cannot afford (e.g. power, railways); to control strategic industries (defence, oil); to prevent private monopoly and exploitation; to create employment; to ensure balanced development of all regions; to raise revenue; to protect national interest from foreign domination; to provide social welfare.
Explanation
Government enters areas where private investors cannot or should not operate alone.