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 Form 2 Business Studies online lessons on government and business

Reasons for Government involvement in business

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Answer Text:
Government and Business
Reasons for Government involvement in business
1) To prevent exploitation of the public by private business persons especially in the provision of essential goods and services such as sugar, transport, communication etc. the Kenya Bureau of standards (KEBS) regulates the quality of goods consumed in Kenya.
2) To provide essential goods and services in areas where private individuals and organizations are unwilling to venture because of low profits/ high risks involved.
3) To provide essential goods and services which private organizations and individuals are unable to provide due to the large amount of initial capital required
4) To attract foreign investment by initiating major business projects
5) To provide goods and services which are too sensitive to be left in the hands of the private sector e.g. provision of firearms.
6) To create employment opportunities by initiating projects such as generation of electricity.
7) To prevent foreign dominance of the economy by investing in areas where the locals are not able to
8) To prevent establishment of monopolies


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