State enterprise is a business entity established and owned by the government or state to provide vital and essential services to the public at a lower cost.
The most common way of bringing a resource into public possession is called nationalization.
In essentially market-based economies, government-claimed resources are frequently overseen and run like joint-stock partnerships with the public authority possessing a controlling stake of the offers this model is regularly alluded to as a state-owned enterprises.
An administration claimed partnership (now and again state-owned enterprise, SOE) may look like a not-revenue driven organization as it may not be expected to produce a benefit.
Reasons why the state owns some businesses* Strategic services: The state owns some l just to able to provide vital or strategic services like water, power etc. Which are very important to the lives of the people.
* National interest: Some state owned enterprises are set up to protect national interest. For example, Tema Oil Refinery, Team Steel Corporation, VALCO.
Importance of state owned enterprises
1 They safeguard the country against unfamiliar mastery.
2 They assist the public authority with controlling every one of the essential areas of the economy.
3 They give work to individuals in the country.
4 They give fundamental labor and products to customers at less expensive rate.