Perceived post-privatization performance of state owned enterprises: Evidence from Tanzania

Abstract

This paper examines perceived changes in the performance of State-Owned Enterprises (SOEs) after  privatization in Tanzania. The data used were obtained from personal interviews with managers of a  convenience sample of thirteen firms from Dar-Es-Salaam, the capital of Tanzania. The findings showed that,  looking at the 21 business performance indicators used in the study, there was a definite improvement or trend for improvement in performance; the only exception was employment, as expected. These findings suggest  that, compared with state owned enterprises, privatised firms seem to perform relatively better on virtually all aspects of marketing, finance and operations. It appears that privatisation brings with it new owners who place greater emphasis on the profit goal, make changes in strategy and create structures that result in  greater profitability. The data collected, however, did not permit clear-cut assignment of the causes of these  performance improvements after divestiture.

Keywords: Privatization, sate owned enterprises, performance, Tanzania.