NCP

Progress Report on the NCP

1.0 INTRODUCTION

In the early 1990s, about 44 public enterprises (defined as majority and minority state-owned) were engaged in virtually all sectors of the economy. The performance of most of these enterprises was characterized by low productivity, high losses, rising debts and poor management, which placed a
considerable burden on public finances and the balance of payments. The government initiated a programme of public enterprise reform and divestiture in 1993, to redefine the role of the state in the economy, reduce the financial and administrative burdens on public resources, and increase efficiency and private investment. Government enacted the Public Enterprise Reform Act in 1993 which was the first phase of the privatisation process. Achievement in
this area was unsatisfactory due to a myriad of problems, including: (i) insecurity posed by rebel activity which also caused inaccessibility to some of
the public enterprises; (ii) poor and depressed market conditions; and (iii) inadequate capacity and weaknesses in the implementation arrangements. In
1996, the mandate of the Public Enterprise Reform and Divestiture Commission (PERDIC) was terminated and its functions were transferred to
the Public Enterprises Unit at the Ministry of Finance. By the end of the first phase of the privatisation processes only 24 public enterprises were divested.
The largest enterprises remained in government hands and most of these continued to impose a burden on the budget. In 2001, Government restarted
the divestiture process by approving the Strategic Plan for the Divestiture of State Enterprises and establishing the National Commission For Privatisation
(NCP) to implement its policy. The NCP acts as the prudent shareholder of state enterprises with a mandate to privatise them. The roles and functions of the Commission are outlined in the National Commission for Privatisation Act 2002.