Posted by Chester Morton / Monday, 28 November 2016 / No comments
The functions of Public Corporations
Definition of Public corporation
A Public Corporation is an entity that has been established
by an Act of Parliament with the sole aim of providing services to the public
at a reasonably priced rate. Some of these services include, but is not limited
to, water, electricity, postal and telecommunication, public broadcast.
FUNCTIONS
Creation of employment
One of the functions of a Public corporation is to create
employment to the people. A Public Corporation necessary needs human resource
in order to function. These human resources have to be recruited and appointed.
This activity of populating the corporation generates employment to the people.
Allows for the creation of important industry
Certain areas of a country’s economy are very important to the
existence of the people but to invest in such areas requires enormous amounts
of capital outlay. Coupled with this is the fact that the profit from the
venture may take a while to start coming in. Investors may not have the capital
or the time to wait for the gestation period so they would not invest. This is
where the government comes in with the necessary capital.
Ensures that prices are controlled
Another function of Public Corporation is that it ensures
that the prices of the goods and services they provide are reasonable. Water
and electricity, for example, are very crucial to the survival of the populace,
but when it is left in the hands of private people, they may price it beyond
the reach of the people.
Political considerations
The setting up of some Public Corporations is to score
political points. They are sited to reward the people for voting for the ruling
party, or to convince them to vote for them in an upcoming general election.
Provision of Capital
Other Public Corporations are established to provide capital
to certain areas that are of importance to the country. The establishment of
the Agriculture Development Bank, for example, was to ensure that capital is provided
for investors in the agricultural sector.
Take control of an industry
Public Corporations are established to take control of a
particular industry. In many countries, governments intend that their citizens
control the retail industry. Sometimes, this is not the case so the government
may establish a corporation to squeeze the players out. The establishment of
the former Ghana National Trading Corporation was for Ghana to take control of
the retail trade.
SAMPLE QUESTIONS
1. a. What is a Public Corporation? [3 marks]
b. Advance five
reasons for the establishment of Public Corporation. [12 marks]
