The efficacy of privatization as an adjustment policy tool in Ghana

This study attempts to ascertain whether privatization is the best option for achieving industrial efficiency in Ghaha as
claimed by its proponents. It also examines the perceived inefficient characteri.stic of the public sector including the
identif;ication and evaluation of the factors responsible. Analysis on pre-privatization performance of five enterprises
studied, testified the general qSS~rtion that the enterprises. for privatization were inefficient prior to the implementation
of the privatization policy. This evidence was revealed by tll.e negative trends in most of the performance·- indicators
evaluated eg. Total Factor Productivity,, .Labour Productivity, Capital Productivity etc. A comparative performance study made between the Pre-and Postprivatization performance of five selected enterprises has manifested ·that the ~AL PERFORMANCE of the privatized enterprises has not significantly improved to justify their efficiency via privatization policy. The as.sertion that the privatized enterprises arE: relatively better-off. ( efficient_> tended to be misleading when inflation was accounted for.
Some improvements have actually been observed in the enterprises but it will be pre-mature to qu~lify them with efficiency,
improvement. taking into consideration the extent of The div~rsities observed in the privatized enterprises performance are attributed to the effects of - inflation, trade liberalization, extremely high exchange rate, high production costs, rehabilitation and the short period of operation. Generally, enterprises performance in the Post-Privatization period is encouraging but they could only sustain the growth rate if the basic problems (like inadequate capital, shortages of raw materials, high production costs etc.) still prevailing are solved. The 'Private style' of management has proved to be more effective than the 'public style' implying that public enterprises can as well be efficient if they could change their management style to ensure effective decision-making system. The claim that privatization leads to efficiency is therefore one possibility and not the most suitable for restoring efficiency.