ASSESMENT OF THE NON- FINANCIAL PERFORMANCE OF KALITI METAL PRODUCTS FACTORY BEFORE AND AFTER PRIVATIZATION

Abstract

Privatization has been picking up momentum in recent decades, making it a fairly new trend in the area of economic policy. The modern idea of privatization as an economic policy was pursued for the first time by the Federal Republic of Germany in 1957. when the government eventually sold majority stake of Volkswagen to private investors (Filipovic, 2005). Privatization in Ethiopia started in 1991 as an integral part of structural adjustment program. gone are the days when a new wind is blowing to boost the nation’s economy. The wind in question is that of privatization. Indulging in this exercise for the past twenty-three years it is expected that Ethiopia rips some of the benefits privatization is expected to yield. Therefore, this study was designed to assess the performance of (before-after) KALITI METAL PRODUCTS FACTORY was acquired by Tsehay Industry Share Company from privatization and Public Enterprises supervising Agency (PPESA) since July 12, 2012 with a payment of 550,550,000.27 Birr. In order to know whether the economic reasons the government expected before embarking on privatization has significantly succeeded after privatization or failed. A number of non-financial. indicators like product quality, customer satisfaction, sales growth and employee efficiency were used to measure the non-financial performance of the factory. The data was analyzed using non-parametric test, namely Wilcoxon matched-paired test to test for the significance of the difference between pre and post privatization. There is a significant difference in the non-financial Performance indicators between the pre- and post-privatization periods. The findings revealed that privatization had positive effect on the company in non-financial performance. It led to the company’s product quality improvement, increment in customer satisfaction, yearly production and sales growth, and also employee efficiency.