It has been noticed that, the private sector plays an important role in the growth of economies in the developed countries.It has been taken as the engine of the economy and welfare of the population in the developed countries. The situation is different in the developing countries of which the sectors play a minor role in developing countries` economies. This paper has attempted to examine the performances of the sector in developing countries, setback, challenges and the way forwards. The results show that, the performances of the private sectors more advantageous than public sectors, but in developing countries actually has been performing poorly over overtime. Several factors have been identified as hindrance towards playing the theorized role. The factors are; Lack of market, Lack of skilled labor and sectoral experts,poor Infrastructure,Low capital and poor government support to the sector.

Keywords : Private Sector, Developing Countries, Performances and Welfare.