Privatization refers to the policy of transferring assets and activities of public sector to the private sectors to be owned and operated by individuals. Privatization is one of the results of Structural Adjustment Programs which has been emphasized by the International Monetary Fund (IMF), (World Bank (WB) and donors from abroad, particularly Western countries like British, France, USA, Denmark, and Germany.The ongoing economic crises of developing countries and dependency syndrome of these countries are some of the factors that contributed to the formation of privatization.
However, the policy started in 1980‟s and gained significance public notice at the global level during the same decade (1980‟s) when Britain‟s Prime Minister Margaret Thatcher took deliberate and extra efforts on economic sectors to restructure the prevailed condition in the country.
Under the provisions of the World Bank, governments of developing countries began experimenting various forms of market reforms including increased privatization out of public services. Under this situation, therefore, privatization gained wide spread interest and became an acceptable policy, to government policy makers, service providers as well as public planners.
1.Privatization has increased unemployment of the indigenous people. This has been the case because most of the personnel are from outside. When any public enterprise is privatized, it is accompanied by massive redundancy of the previously local working personnel.
2.It has led to the fall in agricultural sector due to the withdrawal of the government from providing the agricultural incentives.- It has increased temptation to reduce quality of services in order to reduce costs and maximize profit.
3.Privatization increases the rate of moral erosion due to its policy of free trade. The private companies tend to import all types of goods without considering the consumers. Such goods include phonographs and other related firms or VCD/DVD which ruin the younger generation morally.
4. Privatization policy increases the rate of poverty to the people living in rural areas due to the decline in agricultural production.Rural people depend on agriculture for the better quality of their life.