Explanation

Reasons why government participates in business enterprises are:

(i) To provide essential services: The government prefers to handle the provision of essential services in order to reduce costs. The services are water, electric-ity, etc.

(ii)To prevent monopoly: Government participates in business to prevent the exploitation of the people.

(iii) Capital involvement: Some enterprises require huge capital which private individuals cannot provide.

(iv)To prevent foreign control of the economy: The management of some corporations must be handled by the government to avoid them falling into the hands of foreigners.

(v) Strategic reasons: Some corporations e.g. airport, seaports, etc are strategically important to the economy, hence private hands cannot be allowed

(vi) Revenue generation: Government participates in order to generate revenue from them.

(vii) Employment opportunities: Government embarks on business in order to create employment opportunities

(viii)To monitor the industry: Government may like to co-operate with private bodies in such ventures like insurance and banking to enable government monitor the activities of such business.
 

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