Short paper. Walid Saafan Follow. Private sector by yugank TIS. Drug prescription in hepatic patients. Mclaren the banking sector v2. EGP flotation impact on some banks. ABK Egypt financial statements H1 ABK Egypt financials' summary H NBK Egypt financial statement H NBK-Egypt financials summary H Related Books Free with a 30 day trial from Scribd. Related Audiobooks Free with a 30 day trial from Scribd. Egypt privatization program 1. Prepared by: Supervisor: Walid Saafan Prof. Adel M.
Zayed Jul. The process can be derived by political or economic reasons. Companies can be more economical efficient due to free competition.
Privatization is a complex and wide task that goes through three stages: The first stage involves transforming the public owned companies under privatization into a new juridical form of private law. The second stage involves transferring ownership over the companies under privatization to the interested private investors. The third stage involves is to enforce the new owners to adopt an efficient management without financial support similar to that provided to the state owned companies.
This treats the privatization process as a part from the country economic reform. The ministry of public companies in charge of the program, they inform the Egyptian government about the target companies for the privatization. The program was restricted on small part of the public companies and it was implemented through the stock market aiming for more efficiency and transparency, with priority to companies with low profitability without workforce layoff, on the other hand it was intended to leave the profitable public owned companies that were able to attract 4.
The program excluded the productive economic sectors like banking and telecommunication. The government established a Social Development Fund SDF to support the social elements of the workers especially the poor segments by assist small projects of unemployed young investors.
SDF mobilized over LE 2. The program also led to higher tax collected from the more profitable private companies. The second objective was to better utilize the government assets and resources by transferring 0. The third objective was to access the markets through direct foreign investment DFI that generated LE 4 billion from 11 anchor sales.
The final objective was to widen the ownership of companies through the successful IPOs. The privatization project had a positive impact on the financial performance of the organizations. On the other hand the privatized companies under law improved the performance of public owned enterprises in terms managing over employed staff and improve the financial results.
On analyzing the situation of the companies that went into privatization, We find that there were other strategies that can lead to a better results on the companies under study and the whole public owned assets.
It is difficult to assess all the internal and external environment at that time but the indicators show that the sold companies were affected by the same forces and delivered an improved results after the privatization, this led to conclude that the main issue with the organization performance is the management and leadership factors.
The public owned companies has a good internal resources and faces a moderate external forces that if managed properly can adopted different strategies even a growth strategies.
If We take two different strategies that were adopted by the Egyptian government in two similar state owned banks in Egypt. The government ceases to be the owner of the entity or business.
The process in which a publicly-traded company is taken over by a few people. Privatization leads to the creation of wealth. The cost of production is reduced and profits are maximized. It is certainly a good step if the government feels that a particular sector can be opened up to the competition and it will benefit the market and the consumer.
In other words, it mainly aims to enhance the conditions of the services which people get. In addition, it also lowers the burden of the government by taking over certain industries. Privatization has no doubt made quite an impact on the world. Like there are two sides to a coin, over here also comes with benefits as well as drawbacks. The main argument for privatization is that private companies have a profit incentive to cut costs and be more efficient. If you work for government-run industry managers do not usually share in any profits.
However, a private firm is interested in making a profit, and so it is more likely to cut costs and be efficient. Since privatization, companies such as BT, and British Airways have shown degrees of improved efficiency and higher profitability.
It is often seen that governments make poor economic managers. They are motivated by political pressures rather than sound economic and business sense. For example, a state enterprise may employ surplus workers which is inefficient.
The government may be reluctant to get rid of the workers because of the negative publicity involved in job losses.
Therefore, state-owned enterprises often employ too many workers increasing inefficiency. A government thinks a lot in terms of the next election. Therefore, they may be unwilling to invest in infrastructure improvements that will benefit the firm in the long term because they are more concerned about projects that give a benefit before the election which is a major concern for public welfare.
It is easier to cut public sector investment than front-line services like healthcare. One important disadvantage to recognize is the opportunities for bribery and corruption that come with privatization. Typically, private companies are less transparent than government offices, and this reduced transparency paired with a drive for profit can be a breeding ground for corruption. If we watch on the UK one can argue that the increasing inequality of the eighties was, in part, due to privatization.
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