The success of newly privatized companies: New evidence from Tanzania

Much has been written about the benefits of privatization; however, in coun tries with low per capita incomes and with slow or no growth recently, most local residents do not have the capital or expertise needed to acquire par astatals. Who then is buying enterprises formerly owned by government? This pilot study of a sample of agro-industrial enterprises in Tanzania gives s ome insight into the purchasers and managers of newly privatized firms the estimated economic viability of these firms and the problems and level of i nvestment associated with the privatization process. The firms which had be en privatized for at least three years, were located in the Dar es Salaam-M orogoro region of the country The study also reveals information on the gov ernment's progress in privatization, a government that had a strong carry-o ver of socialist indoctrination and that is struggling with changes in comm ercial laws to allow competition to flourish at the same time it is encoura ging privatization. Tanzania's experience is compared with that of other su b-Saharan African countries. Conclusions appear to apply more widely than t he pilot sample chosen.