1. SOE RECONSTRUCTION POLICY
IMPLEMENTATION IN AFRICA
By
Otive Igbuzor, PhD
Executive Director, Centre LSD, Abuja, Nigeria.
E-mail: otiveigbuzor@yahoo.co.uk; info@centrelsd.org

2. PURPOSE OF PRESENTATION 1/2
a. To show the extensive public sector
involvement in African economy before the
rise of unbridled neo-liberalism.
b. To identify the factors responsible for the
privatisation of SOEs in Africa.
c. To show the magnitude of privatisation of
SOE in Africa.

3. Purpose of Presentation 2/2
d. To share success stories on the commitment
of government to SOE and the performance of
SOEs in Africa despite the onslaught of neo-
liberalism.
e. To propose the way forward to bring about a
resurgence of SOEs in Africa

4. OUTLINE OF PRESENTATION
1. Introduction
2. SOE in Africa
3. Emergence of Privatisation in Africa
4. Ray of Hope- Success Stories from Africa
5. The Way Forward

5. 1. INTRODUCTION 1/4
• Africa as a continent has been faced with a lot
of developmental challenges. The challenges
include poor strategy, lack of capable state,
poor priorities, poor leadership, colonial
heritage, impact of military rule, corruption,
poor regulation, etc.
• The combined effect of all of these is that
Africa is the least developed continent in the
world.

6. Introduction 2/4
• But several scholars have pointed out that what is
needed to deal with the challenges of Africa is a
developmental state that will pursue the appropriate
strategy for development. (Historical struggle between
the oppressor and the oppressed; socialism and
capitalism; state and market; Marxist and neo-liberal
scholars; IMF and non-IMF scholars)
• Africa started at independence with heavy reliance on
development planning and SOEs.
• But this changed in the 1980s and 1990s with neo-
liberal triumphalism.

7. Introduction 3/4
• However, with the global financial crisis of
2008-9, there is a resurgence of SOEs. This
resurgence is particularly high in some
countries like Venezuela, Bolivia and Ecuador.
• In addition, there are global success stories of
SOE with high level of performance such as
Indian Railways, Petrobras (Brazil) and Statoil
(Norway) (Musacchio, A and Flores-Macais, F.
(2008).

8. Introduction 4/4
• It has been documented that all the success
stories share a commitment from the state to
adopt a proper institutional framework that
allows for effective and efficient
management.
• The challenge is how to develop the political
commitment to build a resurgence of SOEs in
Africa.

9. 2. SOE IN AFRICA 1/4
• At independence, Africa recognised the
importance of strategy and development
planning.
• 1960s and 1970s: Golden Period of Planning in
the African Continent.
• 1980s and 1990s: Resurgence of neo-
liberalism in Africa- “lost development
decades” for Africa

10. SOE in Africa 2/4
• In the 1960s ad 1970s, there was a lot of SOEs
in Africa.
• In Africa, extensive public sector involvement
in the economy was reinforced by the fact
that many if not most of the first generation
of new African leaders were ideologically
predisposed to government control of the
economy’s “commanding height”

11. SOE in Africa 3/4
• By the end of the 1970s, the average African
Country’s public enterprise sector accounted
for over 17 percent of GDP compared to a
worldwide average of about 10 percent
(Nellis, 2005)

12. Table One: Share of Public Enterprises in the Development
Indicators of Selected African Countries (Mako & Zhang (2003)
Country No of PEs % GDP % of
Investment
% of
Employment
Nigeria 600 50% 57 66
Cote d’ Ivoire 150 n/a 18 n/a
Ghana 181 n/a 25 55
Kenya 175 n/a 21 9
Tanzania 420 13 26 n/a
Burkina Faso 44 5 20 n/a
Senegal 50 9 33 n/a

13. 3. EMERGENCE OF PRIVATISATION IN
AFRICA 1/4
Factors:
a. Rise of aggressive right wing governments in the
United Kingdom (Margaret Thatcher) and
United States (Ronald Reagan). (Washington
Consensus)
b. Deregulation and marketisation was seen by
many governments as a way to adjust to the
impact of the oil price hikes of 1973-74.
c. The impact of globalisation and the IT revolution
gave rise to “idle capital” that market
fundamentalists thought could be put to good
use in privatisation

14. Emergence of Privatisation…2/4
d. Many SOE in Africa were performing very
poorly and were in need of reconstruction.
Privatisation seemed to the neo-liberals to be
the only answer.

15. Privatisation in Africa 3/4
• Privatisation was implemented vigorously in
almost all African countries in the 1980s and 90s.
• Using poor performance as an excuse the IFIs
(IMF and WB) initiated SAPs in Africa.
• From 1979 to 1989, the World Bank approved
worldwide 98 SAPs with SOE-related components
. (Nellis, 2005). African cases accounted for 70
percent of the total World Bank SOE-related
adjustment in the 1980s.

16. Privatisation in Africa 4/4
• The World Bank has documented that the
total number of privatisation transaction rose
from 200 in 1990 to 3,486 in 2002 (World
Bank, 2004).
• The end result of all of these are job losses,
increase in price of services and primitive
accumulation by the ruling class of the
collective wealth of the people.

17. 4. RAY OF HOPE- SUCCESS STORIES
FROM AFRICA 1/6
Inspite of the assault of privatisation on SOE in Africa, “as
at 2005, in half of African countries, the water, fixed
line telephone, railways, airplanes and petroleum
products distribution sectors are still state owned and
operated companies.” (Nellis, 2005)
Despite the poor performance of many SOEs in Africa,
there are still many examples of African SOEs that
performed very well e.g. Ethiopian Airlines, the Kenyan
Tea Development Authority, Sierra Leone’s Guma
Valley Water Company. (Nellis, 2005)

18. The Success Story of South Africa 2/6
• South Africa has taken the position that they
require a strong democratic developmental
state. A basic requirement of the
developmental state is the strengthening of
SOEs.(Min. of Public Enterp, 2000).

19. The Success Story of SA 3/6
• The Reconstruction and Development
programme of South Africa provides that govt
decide on “the balance of evidence” whether
the public sector should be expanded in
strategic areas through “nationalisation,
purchasing a shareholding in companies,
establishing new public corporations joint
ventures with the private sector. (Min. of
Public Enterp. 2000)

20. The Success Story of SA 4/6
• South Africa started a programme of restructuring of
SOEs (including redesign of business management
principles; turnaround strategies; improving efficiency
and effectiveness; accessing globally competitive
technologies; attracting FDI and ensuring growth in
employment).
• Substantial revenue accrue to the State from SOEs.
• The restructuring and internal organisation brought
good financial result from many SOEs including
Transnet, SAA, Spoornet, Denel, Eskon and Telkon.

21. The Success Story of Botswana 5/6
• It has been documented that Botswana is well
known for its remarkable economic growth
with “the highest level of par capita growth of
any country in the last 35 years.” (Acemoglu
and Robinson, 2001).
• The success story of Botswana is attributed to
effective state management (Harvey and
Lewis, 1990)

22. The Success Story of Botswana 6/6
• The success story of Botswana which depend
on a single mineral (Gold) is markedly
different from Nigeria which also depend on a
single mineral resource (oil). The difference is
in the state capacity.
• It has been shown that the development crisis
in many African countries is compounded by
the profound weakness in the capacity of the
state (Maipose, 2003)

23. 5. THE WAY FORWARD 1/2
• Reconstruction of the African State to become
a developmental state.
• Political, ideological and economic struggle
against neo-liberalism in all its ramifications in
Africa.
• Vigorous dissemination of the success stories
of Kerala and other success stories of SOEs
across the world in Africa.

24. The Way Forward 2/2
• Linkage with other movements such as anti-
globalisation movement and the World Social
Forum processes.
• Support for the resurgence of SOE in Africa.

25. The Way Forward 2/2
• International solidarity and action against
neo-liberal scholars and politicians.
• Linkage with other movements such as the
anti-globalisation movements and the World
Social Forum processes.
• Support for a resurgence of SOE in Africa.
Na gode m’
uku
bedankt
tesekkürle
Ευχαριστώ
takk
Dziękuję
kiitos
aitäh
tack
ありがとう
Danke
Obrigada
Grazie
Muchas gracias
Dalu nnu o
mange tak
díky
tack så mycket
Thank you
köszi
hvala
Ďakujem
΍΍έηϛ
ʤʣʥʺ
Спасибо
Mulţumesc
Ese gan
salamat
faleminderit
děkuji vam
nandri
Дякую
anugurihiitosumi
dhanya-waad
dhanya-waad
go raibh maith agat
Merci
ačiû Terima Kasih
Many THANKS for Your Attention
We k’obiruo