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Objectives of Privatisation

The emphasis is on improving the efficiency of all Parastatal enterprises, whether retained or divested. The Government has decided to distance itself from direct involvement in business, and thus to divest most of its interests whether in loss making or in profit making Parastatal enterprises. All commercial Parastatal enterprises will become available for both foreign and local participation using suitable methods of divestiture including liquidation where necessary.

Primary Objectives:

The following are the primary objectives which have been defined in the Government’s policy statement on Parastatal Sector Reform:

  • Improve the operational efficiency of enterprises that are currently in the Parastatal sector, and their contribution to the national economy;

  • Reduce the burden of Parastatal enterprises on the Government budget;

  • Expand the role of the private sector in the economy, permitting the Government to concentrate public resources on its role as provider of basic public services, including health, education and social infrastructure; and

  • Encourage wider participation by the people in the ownership and management of business.

In pursuing these primary objectives the CHC aims to:

  • Transform, through comercialisation, restructuring and divestiture, the performance of most significant enterprises in the Parastatal Sector; and

  • Ensure liquidation of all non-viable Parastatal enterprises as soon as possible.

Secondary Objectives:

In so far as their pursuit is consistent with the primary objectives, the CHC intends to ensure that divestiture meets the following secondary objectives:

  • to create a more market-oriented economy;

  • to secure enhanced assess to foreign markets, to capital and to technology;

  • to promote the development of the capital market; and

  • to preserve the goal of self-reliance.

Likewise the process of comercialisation and restructuring will be designed so as to ensure that those Parastatals that remain for the time being in the public sector:

  •  are responsive to markets, cost-conscious and profit oriented;

  •  act as business entities without being required to carry out non commercial;

  •  activities except when explicitly compensated by Government;

  •  do not encounter political interference in their operations including the banks;

  •  are guided by supervisory agencies to the minimum consistent with pursuit of consumers’ interests;

  •  have boards and managements that are autonomous and accountable; and

  •  have effective performance monitoring systems.

Given these objectives the Parastatal sector reform programme is expected to:

  • increase private sector savings and investment (both local and foreign) in all sectors of the economy which, in turn, will stimulate sustainable employment opportunities;

  • increase tax collection from businesses that become more profitable after privatisation;

  • create an environment that will encourage private investment and the emergence of indigenous entrepreneurs; and

  • improve the quality of delivery of utility and other public services.