Privatization ‐ The myth of free market orthodoxy in sub‐Saharan Africa

Abstract

The phenomenal spread of privatization initiatives in sub-Saharan Africa since the 1980s created the impression that public infrastructure divestiture is a shortcut to economic growth and development. This has proven not to be the case due to the lack of enabling institutional prerequisites. It appears the case that while much faith is put in the potency of the free market, little thought is generally given to the institutions required for markets to perform their function. Accordingly, this paper discusses some of the embedded institutional failures that have made free-market development policies a mirage in many sub-Saharan African countries. Principally among these are corruption and government failures. To check these, it makes more sense to re-direct attention to the sources of failure rather than the free market ideological thrust.

Privatisation and Performance of Electricity Distribution Companies in Nigeria

“…In other words, government must put in place certain institutional framework that would allow the privatisation of these public enterprises yield the desired results. This observation by Odeh (2011) is in line with those of Nwankwo and Richards (2001), who evaluated privatisation in Sub-Saharan Africa. They argued that "the form of government determines the nature and scope of privatisation".…”

“…While this is not likely to occur, it goes to show that privatisation is not an end in itself but one of the means to an end. Similarly, the argument by Nwankwo and Richards (2001) on the forms of government and outcome of privatisation is evident in the Nigerian experience. For instance, the corruption perception index of Transparency International is measured on a scale of 0 (highly corrupt) to 100 (very clean).…”

“…Nwankwo and Richards (2001) observed that "the term privatisation is hardly amenable to categorical precise definition". This is because beyond giving it a meaning, a lot of people define it from the context of the purpose it is meant to serve.…”

Culture and leadership in Africa: a conceptual model and research agenda

“…In the same vein, Nwankwo and Richards (2001) argue that post-independence leadership styles in Africa have hitherto remained autocratic, dictatorial and incompetent in both public and private organizations. African employees tend to be inspected (i.e.…”

“…While these Asian countries now enjoy the accolade of "economic miracle" (Akyüz and Gore, 2001), the African situation is usually described by such adjectives as "disaster" and "tragedy" (UNCTAD, 2004). Explanations for this dismal performance have included institutional and structural weaknesses (Yeats et al, 1996;Killick et al, 2001), limited attention to private enterprise development (Fafchamps et al, 2001), poor governance (Nwankwo and Richards, 2001), management ineptitude (Kamoche, 1997) and limited staff motivation (Okpara, 2006;Okpara and Wynn, 2007). Other scholars have argued that leadership weaknesses constitute the most important reason for Africa's poor economic performance (Ochola, 2007).…”