Privatization and Restructuring

Privatization Work Stream

Privatization involves the disposal of parastatals or their assets, or transfer of control of public enterprises to the private sector. Privatization does not involve the Government discarding any of its core responsibilities such as safety and welfare of its citizens.

Benefits of Privatization

• Strengthen the role of the private sector in the economy so that Government can focus on its core business  – policy formulation
• Privatization removes state owned monopolies.
• Once government relinquishes space for the private sector – citizen entrepreneurship grows e.g. in out-sourced activities;cleaning services, gardening and security for government offices.

The Responsibilities of the Privatization & Restructuring Department include:

• Identify privatization candidates and conducts feasibility studies;
• Identifying the sectoral policy framework in which public entities operate
• Identifying any policy, legal and regulatory reforms required to facilitate privatization.
• Developing privatization strategies and plans in consultation with line Ministries and candidates for privatization.
• Contributing to parastatals’ restructuring initiatives.

Methods of Privatization

The method of privatization adopted for a given public entity or service will depend on the objectives of the Government and may include:-

• Commercialization, and corporatist
• Contracting out, or outsourcing
• Sale of assets
• Sale of shares through the stock exchange
• Sale of shares to strategic equity investors
• Employee Share Ownership Plans and Management and Employee Buy Outs
• Concessions
• Joint ventures, management or leasing contracts
• Receivership and liquidation