efforts to protect the government from excessive rollover and foreign exchange risk. A good track record of implementing sound macro policies can help to alleviate this uncertainty. This should be combined with building appropriate technical infrastructure--such as a central registry and payments and settlement system--to facilitate the development of domestic financial markets. Key Challenges to Effective Public Debt Management in Zambia Fluctuations in debt dynamics, which mainly include changes in fiscal deficits, interest rates and exchange rates. Being a small open economy which is import dependent, Zambia remains vulnerable to external shocks such as high and volatile international commodity prices. 4. Differentiate between Commercialization and privatization Definition of Terms Commercialization is a policy in which government grants full commercial status to corporations which enable them to operate strictly under business principles and practices without government control or interference and exercising absolute financial autonomy. In other words, Commercialization is the process by which a new product or service is introduced into the general market. Examples of Commercialized Institutions in Zambia are: - Manzi Zambia and other water supply companies, Zambeef, Access bank, etc. Privatization: Privatization is the policy of selling off public enterprises to individuals, groups and organizations; which enable them to operate under the principle of profitability, effectiveness, efficiency and viability than in public interest. Examples of Privatized Institutions in Zambia are: - UBZ, Zambia railways, Zambia Airways, etc. (Temitayo, 2017). Distinction between Privatization and Commercialization 6 | P a g e
The term privatization, narrowly defined, means the transfer of government-owned shareholding in designated enterprises to private shareholders, comprising individuals and corporate bodies. Commercialization, on the other hand, can be defined as the re-organization of enterprises, wholly and partially owned by the Government, in which such commercialized enterprises shall operate as profit-making commercial ventures without subvention from the Government. Commercialization refers to the process of turning a free activity into a paid one or introducing a product that begins to sell whereas it was earlier free. Privatization refers to taking government control in many activities and selling them to private enterprise. 5.List the functions of the World Bank and the International monetary Fund.
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