Reasons for privatization   of public enterprises

1. To create more employment opportunities. Privatization leads to efficient allocation   of resources which leads to the expansion   of production   and business   activities.   This increases    employment opportunities   in the long run
2. To increase efficiency in resource allocation. Privatization promotes   competition   and efficiency in resource use. This leads to the production   of better quality goods and services at reduced prices. This improves the standards of living of the consumers.              .
3. To increase government revenue through taxation. Privatization helps to create a strong private sector  which  helps  to widen  the  tax  base  in  form  of  employment    and business   activities   set  up hence  generating  more  tax revenue  to the government.
4. To increase capital inflow in the country. Privatization helps to attract foreign direct investments in the economy. This increases the    level of investment   in the country.
5. To develop social and economic infrastructure. The  expansion   of  the  private   sector   through privatization   promotes   the  development    of  the social   and  economic   infrastructures    in  form  of roads,  schools,  hospitals,  financial  institutions   etc.
6. To promote technological development in the country. Privatization     facilitates    technological progress through innovation,   invention and technology   transfer due to foreign ownership   of some enterprises.  This leads to the production   of better quality goods and services.
7. To facilitate the exploitation and utilization of the idle local resources. The major aim of private firms under privatization is profit maximization.    Therefore,   they employ   efficient   techniques   of production which leads to the production   of more goods    and services hence economic   growth and development.
8. To reduce the balance of payment problems in the country. Through   privatization,    there is increased production   of goods and services for domestic   market.   This  helps  to save  the  scarce foreign  exchange  which  would  be used  for import  purposes.
9. To reduce bureaucracy, corruption and embezzlement of funds associated    with   the public sector.   This   promotes    accountability     and   transparency    in   management     and   allocation    of resources in the economy.
10. To promote industrial development.   The   backward    and   forward    linkages    created    in   the economy   through  privatization    promote   the  establishment    of  small  scale  industries   which  can later be developed  into large  scale  industries.
11. 11. To increase the GDP of the country. Privatization increases   the contribution    of the private sector to the GDP. This is because it increases output and resource utilization   in the economy.
12. To widen the consumer choice. This is because privatization    encourages    the    production    of a variety of consumer commodities   which leads to improved standards   of living
13. To help in creating  a  class  of  entrepreneurs  ill  the  economy.  Privatization     enables   private individuals   to acquire the necessary   practical   skills required   operate modem   business   enterprises. This promotes   managerial    capacity   building   and helps   to reduce   government     expenditure    on training costs.
14. To ensure political stability in the economy. This is because the private   entrepreneurs    who  have invested  a lot of capital  in their businesses   have  to see it that there  is security   and  stability  to in the economy  to secure  their  lives  and property.
15. To promote better industrial relations and efficiency of labour. This is because there is a direct relationship   between the entrepreneurs   and employees in the private sector.

16. To reduce inflation and create economic stability. This is as result of increased production   of goods and services by the private enterprises.                                                                        .

17. To reduce   excessive   government    expenditure.   Privatization      enables     the    government     to concentrate   its spending   on the provision   of social services to the society   like medical   services, education and security.