Advantages and disadvantages of Public corporations/ Parastatals

Advantages

• The government controls the provision of strategic products.
• Provides products at cheap prices.
• Provides employment to people.
• Reduces duplication of resources .
• Enjoy limited liability.
• Implement government policies i.e. in terms of setting the prices of products.
• Provide a source of income for the government thus reducing the tax burden.
• Enjoy economies of large scale operation.

Disadvantages

• Operate at below full capacity , oftentimes at a loss.
• They are oftentimes inefficient and waste resources.
• Tend to provide poor quality products since they are monopolies e.g. ZESA and its frequent power cuts.
• There is political interference in their operation.
• They are expensive to maintain and run.
• There is a lot of bureaucracy which lead to further inefficiency.

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