The effects of privatization on performance of the privatized enterprises in tanzania

Privatization of the former State Owned Enterprises (SOEs) has been a policy adopted by Tanzanian policy makers since early 1990s. This study is one of the many extensive academic researches that have been conducted to test whether or not privatization improves performance. The study used three case studies ALAF, KPl and TZ-CHINA. It used a longitudinal analysis taking into consideration the periods before and after privatisation. It used interviews and reading of available documents in various forms, so as to come up with genuine and rational conclusions about the efficiency of privatization as a policy. The results of the research profile from the data ranged from 1994 up to 2000 and show that there are losses throughout post privatization period in two of the three case studies. It is only in one case study, KPl where the study discovered that there was insignificant increase in financial returns earned after privatization. The enterprise has enjoyed some little profit, but on the whole, the study concluded that, the performance was not encouraging since it was not significantly different from that of the time of total government ownership. The findings from the evaluation criteria namely production, productivity and capacity utilization do not indicate the private sector efficiency. The general conclusion of the study is that the privatization policy has so far not significantly helped the privatized enterprises to reverse the poor performance experienced in the period of total government ownership.