Give five reasons why Government participates in business enterprise.

Explanation

Reasons why government participates in business enterprises are:

(i) To provide essential services: The government prefers to handle the provision of essential services in order to reduce costs. The services are water, electric-ity, etc.

(ii)To prevent monopoly:Government participates in business to prevent the exploitation of the people.

(iii) Capital involvement:Some enterprises require huge capital which private individuals cannot provide.

(iv)To prevent foreign control of the economy:The management of some corporations must be handled by the government to avoid them falling into the hands of foreigners.

(v) Strategic reasons: Some corporations e.g. airport, seaports, etc are strategically important to the economy, hence private hands cannot be allowed

(vi) Revenue generation:Government participates in order to generate revenue from them.

(vii) Employment opportunities:Government embarks on business in order to create employment opportunities

(viii)To monitor the industry:Government may like to co-operate with private bodies in such ventures like insurance and banking to enable government monitor the activities of such business.