Forms of Privatization
- Divestiture. This refers to the total (outright/complete) sell of all government shares in public enterprises to private individuals. This enables private individuals and companies to have decision making power in these enterprises.
- Demonopolization (Deregulation/Liberalization). This involves removing unnecessary restrictions from the entry of the private individuals to certain investment activities. The aim is to increase competitiveness in the economy. For example the Ugandan government liberalized the telecommunication sector, broadcasting sector, foreign exchange markets etc.
- Contracting. This is where the provision of goods and services is transferred from the public to the private sector but the government has the sole right over the ownership of the enterprise. For example a contractor can tender construction or maintenance of the road while ownership remains to the government. Therefore the state still owns the enterprise but the management is privatized.
- Joint ownership (Partial privatization). This is where the government and the private sector co-own shares in an enterprise. For example power generation and distribution in Uganda.
- Repossession. This involves the government returning certain enterprises to their rightful owners. For example in Uganda, due to the privatization exercise, all properties under the Departed Asians Custodian Board (DACE) were returned to their rightful owners.
- Leasing. This is where the government rents public enterprises to private individuals for a given period of time. For example renting out public markets, hotels etc.
CATEGORIES Economics
TAGS Dr. Bbosa Science
