ABSTRACT The purpose and objectives of this research project was to understand and assess the progress or failure of privatisation in the South African context and to critically investigate the effects and factors, which influence privatisation. Chapter one dealt with background information to the research. Chapter two dealt with privatisation as a worldwide trend in many countries. It analysed privatisation since its inception in Africa, and South Africa in particular. Furthermore it assesses the impact of privatisation socially and economically. Chapter three dealt with the research methodologies used, while chapter four presents the data chapter five concludes the study and make recommendations. An in-depth literature review was conducted to investigate the macro-economic policy of GEAR and the socio-economic impacts of privatisation on the Khayelitsha communities were investigated to attain this aim the research utilised four questions. The researcher employed, qualitative and quantitative research methodology. Two types of data analysis were used namely structural and interpretational. These techniques were advantageous for the study because they explored the feelings of those who are at the receiving end of government policies and business. It also explored how different people react to unemployment and privatisation by getting responses from the respondents in their own words. The result of the data analysis revealed that privatisation is not creating jobs as expected. The research revealed the financial inability of people to afford basic services. The Khayelitsha community prefer services rendered by government instead of private sector. The findings of the statistical analysis were supporting and responding to research questions; it furthermore, indicated the respondent dissatisfaction with government’s privatisation objectives. The researcher concludes that it is necessary to take into account that government in principle has the interests of the citizens at heart. However its macro-economic policy is not having the desired results. Therefore, the researcher recommends that government policies be revised. In turn, efficient, effective and affordable services will be ensured.