Reasons why Parastatals are turned into Public Limited companies (privatised)

////Reasons why Parastatals are turned into Public Limited companies (privatised)

Reasons why Parastatals are turned into Public Limited companies (privatised)

Dairibord Milk. Image credit herald.co.zw

Dairibord Milk. Image credit herald.co.zw

ZIMSEC O Level Commerce Notes: Reasons why Parastatals are turned into Public Limited companies (privatised)

Reasons why parastatals are converted into public limited companies.

  • To reduce the burden on the taxpayer for example parastatals are often subsidised using tax-payer’s money.
  • To improve efficiency of the company through competition.
  • To reduce state monopoly by competing in the supply of goods and services with companies already in the private sector.
  • To improve the quality of products.
  • To free the firms from political interference and thus allow the new company to:
  • pursue profit pricing.
  • So they can reap the rewards of success.
  • Shoulder results of failure.
  • To raise revenue for the government through the sell of the government’s stake in the parastatal.
  • An example of a parastatal that was privatised is Dairibord Zimbabwe.

To access more topics go to the Commerce Notes page.

By |2017-01-17T11:18:43+00:00August 4th, 2015|Notes, O Level Commerce Notes, Ordinary Level Notes|Comments Off on Reasons why Parastatals are turned into Public Limited companies (privatised)

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He holds an Honours in Accountancy degree from the University of Zimbabwe. He is passionate about technology and its practical application in today's world.
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