In this article, we discussed the meaning of government enterprise, the types, the examples, the benefits and also the features.
Definition
A government enterprise is a business that is owned by the government but operates like a private company. Government enterprises are also known as government business enterprises (GBEs) or state-owned enterprises (SOEs).
How do government enterprises operate?
Profit: GBEs try to make a profit and compete with other companies.
Government policies: GBEs carry out government policies and non-commercial services.
Public interest: GBEs are intended to be operated in the public interest.
The Types of Government Enterprise
Government corporations
Government-owned corporations: These are entities that are regulated by the government.
Government-sponsored corporations: These are corporations that are sponsored by the government.
Government-acquired corporations: These are corporations that are acquired by the government.
State-owned enterprises (SOEs)
These are businesses that are owned by a local or national government.
SOEs are designed to provide goods at lower prices, implement government policies, and prevent private sector monopolies.
Departmental undertakings
These are organizations that are managed by a department and function as one of the government departments.
Examples of departmental undertakings include broadcasting and telegraphs.
Public enterprises
These are commercial or industrial organizations that are owned and managed by the government or public authority.
Public enterprises are designed to help the inhabitants of the state in their commercial and industrial activities.
Examples of government enterprises include:
government companies
A company where the government owns at least 51% of the paid-up capital
Registered under the Companies Act
Statutory corporations
A body corporate created by a special act of parliament or the central or state legislature
Fully financed by the government
Examples include:
Indian airlines
State bank of India
Life insurance corporation of India
Food corporation of India
Oil & natural gas corporation
Public sector enterprises
Organizations owned and managed by the government
May be either partly or wholly owned by the central or state government
Examples include:
Nigerian Railway Corporation (NRC)
Central Bank of Nigeria (CBN)
Water Boards/Water corporations
Nigerian Postal Service
Nigerian Defense Industries Corporation
National Universities Commission
Government enterprises can be departmental government enterprises, public corporations, or state-owned companies.
Government Enterprises can benefit governments and citizens in many ways, including:
Benefits to governments
Revenue: Government enterprises can generate revenue for the government to fund projects.
Policy implementation: Government enterprises can help implement government policies.
Competition prevention: Government enterprises can help prevent monopolies in the private sector.
Benefits to citizens
Services: Government enterprises can provide services to citizens, such as transportation, gas pipes, and other infrastructure.
Lower prices: Government enterprises can provide goods at lower prices.
Access: Government enterprises can serve remote areas where private businesses are scarce.
Government-owned corporations (GOCs), have several key features and includes:
Purpose
The primary purpose is to operate in commercial activities
The purpose is to generate profit for the government
The purpose is to provide goods at lower prices
The purpose is to implement government policies
The purpose is to serve remote areas where private businesses are scarce
Ownership
The government typically holds full or majority ownership
The government controls the day-to-day functions and long-term objectives
Legal existence
The company has a separate legal existence from the government
The company has a distinct legal form
Oversight The government oversees operations.
Public accountability
The government is accountable to the people for errors in public administration
Public benefit
The companies help the public and help them in times of need, such as natural disasters.
Conclusion
A government enterprise is a business that is owned by the government and can be a private company or a public organization. Government enterprises can be created to perform civil services, implement government policies, or make a profit or implement government policies.