Problems being faced in the process of privatization
- High levels of corruption within the privatization unit. This leads to misallocation of resources realized from the privatization drive.
- Opposition from the public. This is due to discontent and the general ignorance of the public about the benefits of the privatization exercise.
- Poor valuation of parastatals. Parastatals are sold cheaply hence making losses by the government.
- Lack of transparency anti accountability in the privatization exercise. This leads to the sale of the public enterprises to incompetent private individuals which leads to mismanagement.
- Poor state of parastatals. This makes it difficult to value and market the public enterprises hence making losses.
- Presence of unscrupulous (unserious) buyers. Such buyers forged documents with the aim of manipulating the government for their own benefit.
- Presence of under developed capital markets. This makes it difficult to sell the shares to the public.
- High levels of poverty among the nationals. This forces the government to sell the parastatals to foreigners which increases economic dependence.
- High cost of the privatization exercise. This is in terms of the wages and other form of facilitation given to the people employed by the privatization unit.
- Political sabotage by politicians who oppose the government. Opposition politicians sometimes unfairly criticize and block the sale of enterprises aimed at frustrating the government and to advance their interests.
- Political instabilities in some parts of the country. Political instabilities discourage potential investors from buying the public enterprises .
- Small domestic market. This discourages potential buyers due to the limited market for the produced goods and services.
CATEGORIES Economics
TAGS Dr. Bbosa Science
