Privatisation in Sub-Saharan Africa: Progress and Prospects During the 1990s

Abstract

Privatisation of both the ownership and control o f state-owned enterprises (SOEs) is an increasingly central feature o f all national economic reform programmes in sub-Saharan Africa (SSA). In those countries where SOEs have dominated all or most sectors o f the formal economy, comprehensive privatisation programmes are regarded (particularly by the World Bank and the IMF) as being o f crucial importance for the future development o f a strong private sector which, in many respects, has become the superordinate medium-long term objective o f adjustment programmes everywhere in Africa. Privatisation is also justified on the grounds that SOEs are invariably inefficient and, without decisive interventions, will continue to be a massive drain on extremely limited public resources (see World Bank, 1995). The article is structured as follows. Section 2 briefly describes the sources and types o f data that were included in the survey. Section 3 presents an overview o f the number, value, type, and ownership characteristics o f privatisations between 1980 and 1995 disaggregated by country and main economic sector. Sections 4 and 5 then discusses how the design and implementation o f privatisation programmes in SSA have been affected by a number o f key political and economic factors. Section 6 reviews the limited evidence that is available on the performance of privatised SOEs. Finally, section 7 considers the prospects for privatisation in SSA during the next five years. Data from five main sources were utilised for the survey, (i) The Candoy-Sekse and Sader data bases for the periods 1980-1987 and 1988-1992 respectively, (ii) Unpublished data from the World Bank that partially updates the Sader data base up to and including 1995. (iii) Reports and other documentation produced by government commissions, committees and units that have been specially established, often with technical assistance from the World Bank and other donors, to design and implement privatisation programmes in SSA. Basic information on all transactions was obtained from almost all countries that have had active privatisation programmes during the 1990s, including Burkina Faso, Cote d'Ivoire, Ghana, Kenya, Mozambique, Nigeria, Tanzania, Uganda, and Zambia.4 (iv) Information provided by country desk officers for SSA, and staff o f the Private Sector Department at the World Bank; and (v) A variety o f other publications including the local and international business media. Grey cover World Bank reports on private sector development were particularly useful for a number of countries.