These are government departments that have commercial or semi-commercial functions. They are not corporations because they were not established by any special act of parliament or state law but are part and parcel of a relevant government ministry, and report directly to a minister or commissioner.
Some of these government departments are;
1. Hospitals which are under the ministry of health.
2. The post office which is under the ministry of communications.
3. Schools, which are under the ministry of education such as unity and state schools.
Sources of Capital:
1. Grants from the Government: These are allocations made to the enterprises in the yearly budget by the government. This is made possible by taxes paid by citizens.
2. Credit Facilities/Loans: Short, medium, and long-term loans can be procured from the smooth running of the enterprises.
3. Internally Generated Revenue: This is a situation where an enterprise raises funds for itself through some services that it renders to the government.
Reasons for Government Ownership:
1. Individuals cannot provide the huge capital required to run the establishment.
2. It is an opportunity for the government to provide some essential services to the citizens.
3. It helps to develop the country through equitable distribution of the country’s wealth.
4. It prevents the exploitationTo use someone or something unfairly for your own advantage. More of the citizen by wealthy individuals.
5. It creates employment opportunities in the country.
6. It helps to prevent wasteful competition and duplication.
7. It prevents foreign dominance or control.
Responses