| dc.description.abstract | After independence, especially in Africa, Public enterprises were considered as one of the surest
ways the Government could use to ensure fair and equitable distribution of National resources.
However in the past twenty years, the World experienced a major shift in thinking about the
appropriate role of the Government in the economy. It emerged that most of Public enterprises were inefficient, and caused a locative inefficiency.
Thus economists started advocating for privatization as a necessary policy, capable of raising living standards by introducing competition, which will bring about efficiency, lower cost and lead to
better levels of service. The UK set the tone and many countries followed in privatizing the SOES.
Rwanda joined the club in 1997, and so far 23 companies have been privatized, out of 75 that are
concerned so far, only public services have made an evaluation of the Rwandan privatization
program and they all claim that it is leading to the ultimate aim of raising living standards.
The main objective of this study was to make a private. non-biased evaluation, and initiate a debate on the topic, because so far no private evaluation was done.
The researcher used a case study methodology where by the SOPYRWA; a company dealing in
pyrethrum was evaluated. It was chosen because it is one of the companies that were privatized at the beginning of the program and especially because of the immediate link between its operations and the welfare of the populations living in the areas where it operates. Thus performances in terms of profitability and outputs leading to improved living standards or the pre - and the post- privatization periods were compared. Graphs and percentage tables were used to depict that comparison.
The pre - privatization period data are from 1986 to 1990, a period that is thought to be the most
prosperous for OPYRWA (former SOPYRWA), while the post- privatization period data are from
2001 to 2003. The period in between was not considered due to the insignificant performance of the Rwanda economy during that period largely marked by civil war that culminated in genocide.
The main conclusion of this case study was that so far, the privatization of OPYR W A has not yet
triggered any significant better performance in terms of profitability and outputs that could lead to
better living standards of both the workers, the pyrethrum growers as well as the owners. Some of
the reasons have been found to be: the non regulated monopolistic position of SOPYRWA, the
uncertainty in the domestic labour market. the lack of consultation of all the stakeholders before the privatization of OPYR W A among others.
The study recommends that for a privatization program to be successful, especially in the third world where markets are imperfect, some measures must accompany it. These include the establishment of an effective and reliable regulatory institution to ensure that the interests of both the consumers and producers are achieved in a win-win situation, the establishment of a competition policy, the rational choice of an effective method of divestiture as well as accountability in using the proceeds realized from selling the SOEs.
The researcher calls upon other researchers to undertake more comprehensive studies on the
privatization program in Rwanda and in other developing countries and to avail their conclusions to decision makers who are urged to positively take these conclusions into account and make necessary corrections before it is too late, for this policy to truly lead to a fair, equitable and (ill inclusive economic development or our countries . | en |
