The impact of privatisation of state-owned enterprises on employees : a case study of Uganda Commercial Bank, now Stanbic Bank Uganda

Abstract

ABSTRACT

The world is changing from highly government planned development to supervisory and regulatory roles while the private sector is empowered as the new engine of development. Privatisation is one of the reform policies that has been undertaken to achieve this objective and it has almost moved through all economies the world over.

Under privatisation public enterprises change hands to the private sector where structures, conditions and employment levels change. Characteristic of this policy has been reduction of employees in order to maximise profits. It is the profit motive and cost –reducing strategies that have resulted in the need for the private to maintain a smaller number of workers.

Implementation of privatisation has had opposition due to the change in ownership and the related benefits.

In developing countries privatisation is linked with the indebtedness of the countries and as a result the enterprises are sold off to be able to pay the debts leaving no money to re-invest or fund social services needed for the countries. Privatisation is a policy that has profoundly affected every country the world over but unfavourably in developing countries.

In line with that background, the employees are retrenched and not adequately compensated which impacts adversely on their welfare and ability to lead a descent life.