Privitization in Kenya
IMPACT OF PRIVATIZATION ON THE FINANCIAL PERFORMANCE OF ORGANIZATIONS IN KENYA
By Benson Murigi, Ken Mwaforo, Paul Mugi
Table of Contents
CHAPTER ONE
1. INTRODUCTION
1.1 Background information
Organizations are the backbone of any country’s economy. A leadership dialogue that took place in the year 2007 explained that business activities could create jobs and entrepreneurial opportunities, cultivate inter-firm linkages, enable technology transfer, build human capital and physical infrastructure, and generate public revenue for government and organizations as well as offering a variety of products and services to consumer and other businesses. This will have a multiplier effect on social and economic development in the country. It clearly showed that private companies could boost the overall development of a country when implemented.
Any given economy needs to have public enterprises as well, state owned enterprises remain important in emerging and transition markets despite an upsurge in privatizations. Traditionally these organizations mainly dealt with transport, communication, national security among other critical areas in the economy. These organizations however need to be transparent, accountable, and equitable and have sustainable management in order to play their role in economic development effectively. There have been recent programs to reform this sector. One of these reforms is privatization of the organizations.
1.1.1 Privatization
Privatization entails shifting of production and provision of goods and services from the government to the private sector.Through privatization, public enterprises may be transformed to private firms. Oxford Dictionary defines it as “the process of changing a business, industry or service from public to private control or ownership”. Therefore it involves selling the government stake in government organizations to private investors whether individual or companies. This way the involved institution is
By Benson Murigi, Ken Mwaforo, Paul Mugi
Table of Contents
CHAPTER ONE
1. INTRODUCTION
1.1 Background information
Organizations are the backbone of any country’s economy. A leadership dialogue that took place in the year 2007 explained that business activities could create jobs and entrepreneurial opportunities, cultivate inter-firm linkages, enable technology transfer, build human capital and physical infrastructure, and generate public revenue for government and organizations as well as offering a variety of products and services to consumer and other businesses. This will have a multiplier effect on social and economic development in the country. It clearly showed that private companies could boost the overall development of a country when implemented.
Any given economy needs to have public enterprises as well, state owned enterprises remain important in emerging and transition markets despite an upsurge in privatizations. Traditionally these organizations mainly dealt with transport, communication, national security among other critical areas in the economy. These organizations however need to be transparent, accountable, and equitable and have sustainable management in order to play their role in economic development effectively. There have been recent programs to reform this sector. One of these reforms is privatization of the organizations.
1.1.1 Privatization
Privatization entails shifting of production and provision of goods and services from the government to the private sector.Through privatization, public enterprises may be transformed to private firms. Oxford Dictionary defines it as “the process of changing a business, industry or service from public to private control or ownership”. Therefore it involves selling the government stake in government organizations to private investors whether individual or companies. This way the involved institution is
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