QUE:WHAT IS THE ROLE OF PRIVATISATION IN TODAYS

GHANAIAN ECONOMY..

.INTRODUCTION

.DEFINITION OF PRIVATISATION

FORMS OF PRIVATISATION

ROOLE OF PRIVATISATION IN GHANAIAN ECONOMY.

INTRODUCTION.

Emerging democracies are adopting privatisation in order to establish capitalism.

In view of serious numerous weaknesses of state owned enterprises, there has been the necessity of privatisation.

In Ghana, as part of the World Bank Supported Recovery Programme, privatisation was seen by the PNDC government as the only way to relieve it of some huge financial burden from their high running cost and subventions.

By September 1993,public sector has been reduced to a third of its size in 1988. By 2000, 304 state owned enterprises had been privatised.

DEFINITION.

In the narrow sense, privatisation is seen as sale of government owned assets in various state owned enterprises to private investors with or without the loss of governmental control.

It could also be referred to as the policy of converting public ownership of an asset to private ownership.

It could be the performance of activities by private sector previously undertaken by public organisation.

In a broad sense, privatisation is increasing the role and size of the private sector thereby reducing the role and size of public sector.

FORMS OF PRIVATISATION.

Denationalization..eg. privatisation of Tema Food Complex Corporation to

Ghana Agro Food Company.eg. Intercontinental Hotel to Golden Tulip Hotel.

Deregulation.eg. postal sector and broadcasting sector.

Management contract.eg. In 2006,private management firm Aqua Vittens Rand

Limited was appointed to manage Ghana Water Company.

Other forms are franchising, leasing, joint state-private sector ventures, commercialization.

ROLE OF PRIVATISATION IN THE GHANAIAN ECONOMY.

Increased competition, economic efficiency and profitability.

eg. postal services-DHL, MHL, American Express along

side Ghana Postal Co. Ltd

Economic growth and development.

eg .in 2008,some workers were laid off when Ghana Telecom was privatised to Vodafone.

Improvement in government budget position.

Foreign exchange generation.

Control of industrial unrest.