Assessing the Effects of Privatization on State Enterprises in Ghana

Isaac Akomea-Frimpong, Modjinou Yaovi Sebia, Temitayo. O. Olaniyan


This paper examines the effects of privatization on state enterprises in Ghana. Vodafone Ghana and Universal Merchant Bank were selected for this study. Primary data was obtained from 287 respondents through survey questionnaires together with secondary data from the published annual financial reports of the two companies. The results of the study showed that factors such as weak internal controls, bribery and corruption, mismanagement of resources, political interference for self-reasons, and increased debts influence the privatization of state enterprises. The results also showed that non-financial effects of privatization include the improved efficiency in delivering services to consumers. Financially, privatization leads to significant improvement in profits, liquidity, solvency and investments stance of state enterprises. It is recommended that there must be a well-drafted strategic policy to manage the privatization of state enterprises in respective of the government in power. Capacity building through training must be offered to employees of state enterprises to revolutionise the innovative abilities and outputs. Effective internal controls must be institutionalize to bolster the operational efficiency of state enterprises.

Keywords: Factors, Financial Ratio, Performance, Privatization, State Enterprise

DOI: 10.7176/RJFA/10-8-14

Publication date: April 30th 2019

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ISSN (Paper)2222-1697 ISSN (Online)2222-2847

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