A private enterprise is a business undertaken owned by private persons. It is owned by the ordinary citizens of the country. It is different from a public enterprise which is a business concern owned by the government.
Many of the joint stock companies like UAC, Leventis, Lever brothers and The Union Bank are private enterprises because they are not owned by the government. On the other hand, The Nigeria Port Authority, Nigeria Airways Corporation, the Water Board, etc are public enterprises because they are owned by the government.
Free Enterprise Economy: A country is said to have a “free enterprise economy” if almost all the businesses belong to private persons. In the free enterprise economy, the government does not own many business enterprises. It restricts itself in the provision of defence, administration and few utilities such as roads, railway, water supply and market places. The best example of a “Free Enterprise Economy” is the United States of America.
Planned Economy: In this type of economy, nearly all business enterprises are owned by the government. The government has a Central Planning Committee which decides how much of each commodity should be produced. This is the kind of economy that now exist in the Soviet Union.
Mixed Economy: In many countries some of the business concerns belong to private persons while others are owned by the government. In other words private enterprises and public enterprises exist side by side in the country. When this happens, the country is said to have a “Mixed Economy”. This is the type of economy that is being practiced in Nigeria and all the other countries of Africa. It is also practiced in Britain and many other countries of the world.