(a) What is the difference between Privatization and Nationalization? (b) Explain four reasons why a country may choose to privatize state-owned enterprises.
Explanation
(a) Difference between privatization and nationalization: Privatization is the transfer of ownership and control of businesses from the state to individual whereas nationalization is the acquisition by the state of privately own, businesses (b) A country may choose to privatize a state-owned enterprise for the following reasons: (i) To r the company more efficient by cutting out red-tapeism and the reduction of wastage. (ii) Conscious effort to - their profit-orientation. (iii) To prevent government from influencing the business operation. (iv) To liberate market and allow private investors to compete. (v) To ensure that business is run by businessmen ar servants/efficient management. (vi) To ensure that consumers have a choice as government ownership often result in monopoly (vii) To relieve the government of the burden of finance.