WAEC Commerce 2024 Theory — Question 7

Model answer

(a) Deregulation involves allowing the market or seller of a product to determine the price with which they will sell their product while commercialization involves converting a non-profit-making corporation to a profit-making corporation. (b)(i) Privatization. (ii) Reasons for privatization: (I) Liability of government to continue to fund the corporation: when the government becomes unable to fund the corporation, the government can decide to privatize the company. (II) Inefficiency: if a corporation is inefficient under the auspice of government and such corporation needs to be efficient, the government can decide to privatize as well. (III) Source of revenue: if the government needs money to fund some critical projects, the government can privatize some of its corporations to generate revenue. (IV) Competition: if government intends to promote competition in a sector or an industry, the government can sell its shares in the industry to private owners. (V) Corruption in a corporation can also make the government to privatize a corporation.