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International Handbook on Privatization

International Handbook on Privatization

Elgar original reference

Edited by David Parker and David Saal

Privatization has dominated industrial restructuring programs since the 1980s and continues to do so. This authoritative and accessible Handbook considers all aspects of this key issue, including: the theory of privatization; privatization in transition, developed and developing economies; as well the economic regulation of privatized industries.

Chapter 15: Privatization in Sub-Sahara Africa

Paul Bennell

Subjects: economics and finance, industrial economics, public sector economics


15 Privatization in sub-Saharan Africa Paul Bennell Introduction Sub-Saharan Africa (SSA) is the least developed region in the world. Over 80 per cent of its 45 nations are classified as low-income developing countries with per capita incomes of less than US$400 per annum. Around twothirds of the total population of 650 million in the region earn their livelihoods from smallholder agriculture. For the large majority of SSA countries, economic growth and development has been poor since the 1970s. Post-independence, governments adopted statist development strategies and many nationalized the ‘commanding heights’ of their economies. A combination of serious economic mismanagement, poor governance with high levels of corruption and other rent-seeking activity, and limited economic diversification resulted in deep economic and increasingly political crises throughout the region. Beginning in the early to mid-1980s, governments embarked on national economic reform programmes in order to rectify these policy shortcomings (Bennell, 1997). As elsewhere, privatization of both ownership and control of state-owned enterprises (SOEs) has become a central feature of these programmes. Privatization should be seen as part of a wider process of private sector development, which entails the nurturing of an indigenous capitalist class and attracting significant inflows of foreign direct investment. Reducing the fiscal burden of the public sector and improving economic efficiency are the other key related objectives. The following discussion reviews the overall form of the privatization process in SSA from the mid-1980s to the late 1990s.1 It then focuses on a number of key...

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