Private Sector Development
ZAPU government, through appropriate policies, will promote the development of a vibrant private sector to be the engine of economic and productive employment growth. It will institute initiatives and reforms to reduce the risk for investors and make Zimbabwe an attractive investment destination.
Some of the measures for promoting private sector development include:
a. Improving legislation for the Reserve Bank of Zimbabwe to have relative autonomy and a clear objective of attaining and maintaining price stability; b. Set in train greater accountability in the public sector and cut gravy trains, nepotism and other manifestations of economic indiscipline in state enterprises; c. Pursuing improved access to international markets starting with regional markets in SADC and COMESA, d. Improving conditions for the development and growth of small and medium scale enterprises (S.M.Es); and e. Developing production skills (entrepreneurship and technological-know-how).
Businesses in a morden world are normally grouped into private sector and public sector organisations. Private sector firms are set up by individuals, entrepreneurs who seek to make profit from their business activities. Although many private sector firms are controlled by entrepreneur(s), they may be owned by different people (or organisations), for example, companies owned by shareholders, either as private or institutional (organisation-based) investors. This may lead to a conflict between ownership and control.
As well as making profit, entrepreneurs may have other objectives, e.g.:
- job satisfaction
- power and prestige.
The public sector consists of those organisations owned and/or financed by central and local government. This sector provides goods and services to the community through public corporations, local government and other statutory agencies (e.g. the National Health Service). The profit motive is not so prominent: the emphasis in the public sector is on providing for the community by the community, using funding supplied through taxes and government borrowing.
Entrepreneurs and Profit
Why is profit important to an entrepreneur? It provides a measure of success for the business, as well as acting as an indicatorto others. Prospective lenders use the profit figure to decide whether to lend, and potential entrepreneurs look at present profit levels when deciding whether to enter the industry.
Profit, as the reward for taking risk, is not guaranteed: many firms make losses and close. Even when profit is made, it may be small and regarded by the entrepreneur as poor reward for risk-taking: the firm’s profitability is too low. This results in continual change in the structure of the private sector.
Economists view profit as the reward of one of the factors of production (enterprise). Zapu government will give anyone with a vision an opportunity to open up their own business than rely on other people to employ them.
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