RATIONALE FOR FORMATION OF PUBLIC ENTERPRISE.

By: Khalif Barkhadle
Digital Journalist.
Published On: 25th July 2023.

According to Gant (1979), the government's choice to interfere directly and actively in the economy to achieve the goals of its development plan is the primary reason for the establishment of the public enterprise sector in a country.

Most decisions to create public companies are based on analyses and findings that demonstrate institutional development needs that the government believes the private sector will not be able to meet, at least not alone. In other words, the argument for establishing public businesses is that they are more effective tools for achieving developmental objectives.

The following are some of the reasons for the establishment of public enterprises.

1. Employment Creation: One of the reasons for the formation of a public corporation is to employ people who would otherwise be unemployed. To function, a public corporation requires human resources.

These individuals must be recruited and appointed. The act of hiring people to work for the government creates jobs for the citizens of a country.

2. Creating an Essential Industry:
The purpose of forming a Public Corporation is to develop industries in areas of the economy that the…