Privatisation in Sub-Saharan Africa: Issues in Regulation and the Macroeconomics of Transition

Abstract

More than a decade after first appearing on the agenda, privatisation in Sub-Saharan Africa remains an elusive goal. Despite compelling evidence from other developed and developing countries that privatisation is viable and capable of injecting dynamism into previously dirigiste economies, most surveys reveal African privatisation programmes to be narrow in scope, subject to reversal and delay, and extremely limited in their impact as measured by almost any criteria (for example World Bank, 1988; Adam, et al. 1992; and Kikeri, et al. 1992). Estimates of the number of successful sales vary widely by virtue of the definitions used,¹ but even the most comprehensive studies find that less than 15 per cent of African state-owned enterprises (SOEs) have been privatised in the last decade (Berg, 1996, p. 6), while the proceeds from privatisation have been negligible when measured as a proportion of national income or government revenue. Even in Guinea, which has carried out one of the most extensive programme in Sub-Saharan Africa, total proceeds from privatisation have constituted only 5 per cent of GDP (Kikeri, et al. 1992). This slow progress is all the more alarming in the light of considerable donor support for privatisation. Moreover, this lack of progress is also conspicuous relative to other developing economies in Latin America, the Caribbean, South East Asia and, in particular, China and the former communist bloc.