The basic question relating to the benefits of privatization is the following. Advantages and problems of privatisation economics help. Water privatisation and socioeconomic rights in south africa. The painful privatisation of south africa international.
It therefore by design sets out to map a discursive field for the water. Fundanga and andrew mwaba african development bank the views and interpretations in this paper are those of the author and not necessarily those of the african development bank. The alternative to privatisation is continued poor governance, crony capitalism, neverending rising costs in both tax payers and consumers, and a continued delay in meeting the countrys need to upgrade and expand its economic infrastructure, according. Uganda water one of eight papers from a project entitled. Several economists are calling for the privatisation of stateowned enterprises soes citing governments increased debt burden over the past 10 years and questioning its longterm financial viability this comes in the wake of the reserve banks decision to hike the repo rate by 25 basis points, putting even more pressure on consumers economist, lumkile mondi. Back in 2006, at the end of what was a very lengthy privatisation procedure during which several important international companies pulled out as the goalposts were shifted, it looked as if a model for future transactions had been secured, with significant foreign companies like fraport and acsa having stayed the course until the bitter end just. With an installed generating capacity of about 7,500mw and operating capacity of. The good, the ugly, and the unfair 6 antonio estache and lourdes trujillo 6.
The resulting desk research on south africas experience of privatisation is the basis for this book. Water privatisation in south africa is a contentious issue, given the history of denial of access to water and persisting poverty. Water privatisation has taken many different forms in south africa. South africas mining industry is supported by an extensive and diversified to the governments philosophy and policy on competition and privatisation. Privatisation in nigeria has not been a popular and an accepted reform. That privatisation has led to increased industrial capacity utilisation, profitability and. Relations congressional research service summary south africa is a multiracial, majority black southern african country of nearly 52 million. International growth trends in prison privatization. African railways consist mostly of single lines penetrating inland from the coastal. The issue of privatisation has been a subject of intense global debate in recent years. A may 2001 report by kate bayliss, a research fellow at the university of greenwich, britain, titled water privatisation in africa. The majority of nigers people are poor, so the country cannot afford to privatize water because it would lead to disastrous consequences for its already impoverished population. Nov 19, 2019 privatisation is often achieved through listing the new private company on the stock market.
Mali is one of the countries that experience both land grab and privatization of their water. Nigeria power sector privatization program appraisal report. The aim of this working paper is to investigate the optimal regulatory routes from a competition and public interest point of view for the south african water industry. It held its first universal suffrage elections in 1994, after a transition from white minority rule under. Privatization has been an important issue for the republic of south africa for over two decades. Total proceeds of privatization received by subsaharan african countries. In africa, it has remained highly controversial as well as confusing. The fundamental problem of soes not just in africa, in infrastructure as well as. Privatisation occurs when the rulers of the country can fetch enough shares in the newly created firms to compensate them from the private benefits they were deriving from public firms. The casebycase approach to privatization regulation body of. Nov 23, 2018 several economists are calling for the privatisation of stateowned enterprises soes citing governments increased debt burdens over the past 10 years and questioning its longterm financial viability. The impact of privatisation on the sustainability of water. Privatisation and the broadening of ownership of stateowned. Telkom gradually privatised starting with the ipo in 2003.
The stance of the african national congress on privatisation before 1992 was negative and suggestive of an inclination to nationalisation of. The privitisation of the electricity industry in south africa. Positive theory of privatisation for subsaharan africa. Power africa power africa is a new fiveyear united states of america presidential initiative aimed at supporting economic growth and development by increasing access to reliable, affordable, and sustainable power in africa. The whole notion of having landlord port authorities and. Privatization in subsaharan africa an essential route. The privatisation discourse in south africa, as in most african countries, tends to be confined to the sale of large state undertakings and how much the government can get into its coffers. Privatisation means the transfer of assets from the public government sector to the private sector. Strategic industries tend to be regular enough targets. Yet however varied and at times unclear in its meaning, privatization has unambiguous political origins and objectives. The privatisation and globalisation of security in. Indias airport privatisation finally appears to be in the. Post privatisation challenges of public water in ghana. Privatization and restructuring of state assets in south africa.
The public authority retains responsibility for operation and maintenance of. The standard privatisation literature tends to reinforce this view. Pdf on jun 1, 2007, rita abrahamsen and others published introduction. It has received so much criticism from labour, academia and individuals. This paper examines the way a general discourse of privatisation. Spoornet is now in the midstage of restructuring in preparation for outsourcing services and concessioning various lines railroad association 2004. The lessons learned from this operation will provide useful insight into the promotion of private investment for infrastructure projects using guarantees in nigeria and other african countries going forward. Assessing the impact of privatization in africa funded by the norwegian trust fund and cofunded by publicprivate infrastructure advisory facility managed by the investment climate department and africa private sector and. Privatisation in the power sector 3 introduction nigerias power sector reform has proceeded as scheduled. Some other factors to be taken into consideration other than economic will be looked at in this chapter. Privatization programs in subsaharan africa ssa occurred in successive waves, with some countries privatizing much earlier than others bennell 1997.
The railroad association of south africa claims that. Privatization in africa is the outcome of a study undertaken during 1995 and 1996. Jul 12, 2016 the american economy is sluggish, the government is running large deficits, and the public is frustrated with the poor performance of federal bureaucracies. South africa considers privatization to counter recession. Regional agenda accelerating economic reforms in the middle. It stipulates the following key indicators for assessing the performance of divestiture programs in africa. Between the periods 19701975, 19761990 and 19911999, per capita gdp fell by 0. Mr radebe is showing some signs that he plans to jolt south africas privatisation programme out of its coma. The direct contribution of mining to the economy is low and its impact on the wider economy has not been measured. In a synthesis of theoretical literature, galal et. Although reduction of fiscal deficits is commonly cited as the main objective for the adoption of privatization in africa, the choices of enterprises for privatization suggests that the primary motivations for privatization have been the need for the. Privatisation is usually thought of myopically as the sale by the state of assets. The privatisation and globalisation of security in africa. Nigerians had thought that the privatisation of the sector would be like that of the telecommunications sector, which worked well.
Up to that time, privatization throughout the continent had been slow, with few visible results and a general feeling among observers and donors that african governments commitment to the process was generally halfhearted. Privatisation of soes can relieve the state of financial. Oecd 2018, privatisation and the broadening of ownership of stateowned enterprises this work is published on the responsibility of the secretarygeneral of the oecd. Privatization in subsaharan africa an essential route to poverty alleviation by fudzai pamacheche and baboucarr koma abstract. The figures have changed in 1997 and have changed in 1998. Ebscohost serves thousands of libraries with premium essays, articles and other content including privatisation in south africa. With the growing trend of privatization and public private partnerships in state and local governments. Privatisation programme is not a recent phenomenon. Southern africa pmaesa newsletter first quarter 2002, given by siyabonga gama, chief executive officer of the national ports authority of south africa, and chairman of pmaesa, in december 2001. The fourth section will introduce and discuss the results of my own empirical study. From stateowned enterprises to private participation in infrastructure and back. A large share of the blame for this disaster can be put at the feet of the collapse of the world price of.
Privatisation of public enterprises in developing countries. Privatisation has become a key micro reform in the. Strategic communication for privatization,publicprivate partnerships and private participation in infrastructure projects daniele calabrese. Government privatization illinois general assembly. This map shows the percentile rank of each country on the selected governance. Privatization is most of the time associated with improved efficiency due to the. Privatization issues this section addresses the issues, and the decisions which governments themselves must make prior to embarking upon a privatization process. Despite being africas leading copper producer, investment promotion agreements signed during the early 2000s means that the industry only contributes 3 percent of tax revenues versus up to 70 percent of foreign exchange income. In the 1980s and 1990s, the uk privatised many previously stateowned industries such as bp, bt, british airways, electricity companies, gas companies and rail network. Job creation or job losses the effect it would have on the skill levels any other problems that might arise. This study evaluates south africas privatization and regulatory. Download our free maps in pdf format for easy printing. Privatization in south africa under the nationalist party.
History examples, and issues page executive summary i i. It covers a great range of ideas and policies, varying from the eminently reasonable to the wildly impractical. Pdf competition policy and privatisation in the south. If privatisation is properly executed, then it can be beneficial for south africa. The privatisation secretariat further indicates that, since privatisation started in 1996, other assets sold by the government include hotels, a fruitjuice factory, a printing firm, and companies that make insecticides, tobacco products, sugar, dairy products, processed. Request pdf utility privatisation in subsaharan africa. Study on airport ownership and management and the ground handling market in selected noneu countries dg move, european commission final report.
In the case of the power sector, it is an abysmal failure. In short, cook and kirkpatrick 1988 define privatisation as the transfer of productive asset from public to private ownership and control. Africa from the privatisation of security to the privatisation of war. Developing countries like south africa have their own peculiar brand of neoliberali. A number of countries have, in the past, adopted privatization. Different countries identify different strategic industries and even different strategic minerals. Much of the initial impetus for privatisation in africa came from creditor institutions, as part of their push for structural adjustment. Africa, restructured in 1996 as water and sanitation services wssa, was the private actor that won the relevant management contracts.
Stateowned enterprises now contribute less than 2% of gdp and less than 1. Privatisation and the broadening of ownership of state. Another 33 % came from sales in a group of four actively privatizing countries ghana, nigeria, zambia and ivory. That privatisation has led to increased supply of quality goods and services on the market especially essential commodities sugar, salt, soap, e. Pdf the state, privatisation and the public sector in.
The government currently holds 39%, and is planning on selling its entire stake. This is a short history of africa excluding egypt, ethiopia and dutch and british south africa, which are the subjects of separate histories. South africa would be the nationalising of certain geological terrains or formations. These economies were characterised by high trade deficits due to a decline in prices of exports and a surge in the prices of imports, with resulting high budget deficits. Public good over private profit global campaign for education.
The comparative statics of the model suggests a relationship between the level of privatisation and the level of corruption which has an inverted ushape. African development bank economic research papers no 35 privatization of public enterprises in zambia. The program is designed as a multistakeholder partnership among the governments of the united states of. Privatisation in the context of the current document refers to a transfer of corporate assets to the private sector rather than a transfer merely of activities. Privatization is the transfer or sale of governmentowned assetsinstitutions to the private sector. Although the national party government of south africa expressed its allegiance to an economic system of markets, the government sector in south africa produced the highest proportion of gdp of any country outside of the marxist socialist bloc. Privatisation of education is the process by which a growing proportion of an education system is being owned, funded, or operated by nonstate actors, while the term private. This book examines recent progress made in the regions privatisation effort in subsaharan africa. Africa nigeria, senegal have taken many by surprise. Overall, the literature now reflects a more cautious and nuanced evaluation of privatization. In the final section of the paper i will attempt to draw useful conclusions regarding privatization as an economic growth policy. Pdf on jun 1, 2006, stephen greenberg and others published the state, privatisation and the public sector in south africa find, read and cite all the research you need on researchgate. Reports about the progress or lack of progress with the privatisation of rail services in south africa seem to be contradictory. Nationalisation in the reasons to nationalise south.
In the uk the process has led to a sizeable reduction in the size of the public sector. One reform that can tackle all of these problems is privatizing federal businesses and assets. Free maps for students, researchers, teachers, who need such useful maps frequently. The first group to start such programs in the late 1970s to early 1980s was composed of francophone west african countries e. The initial groundwork and clarification of objectives recommended herein should enable. Privatisation was intended to cut public sector inefficiency and waste, provide greater scope to the private sector, attract more investment, bring in new technology and revive economic growth.
It is the project teams hope that this study brings to the fore a political and strategic. Some of the history of these countries, however, is naturally mentioned in this history of the rest of africa but is kept to the minimum needed to make the rest comprehensible. Privatisation has become an integral part of procompetition programme and has now become a familiar feature of new consensus economic policy. By the late 1990s, nonindigenous hired military assistance had. It is a narrow gauge line with a 1,067 mm 3 ft 6 in track. Government privatization commission on government forecasting. This study spotlights the progress made in the regions privatisation effort over the last decade. Strategic communication for privatization, publicprivate. This study discusses a dozen advantages of privatization and describes government activities that should be moved to the private sector.
A more detailed report on water privatisation in africa was prepared by british academics from the public services international research unit psiru and presented at witswatersrand university. Early aviation history in south africa 19291949 in 1929 major allister miller founded the union airways in port elizabeth after being awarded a government contract to fly airmail between cape town and the major centres in south africa pirie, 1990. Privatization is a fuzzy concept that evokes sharp political reactions. The impact of privatisation on the zambian economy from 1975 zambias economy underwent a world record breaking decline. Africa faces a dire poverty situation and this is exacerbated by challenges such as low level of human development, low levels of productivity, poor investment climate and poor infrastructure. Privatisation in south africa ebsco information services. Structures, strategies and shortcomings 15 field is privatisation. The following document is divided into two main parts. Different forms of privatisation b table g service contract this is the least risky of all partnership types. With effect from 1 december 1999, the central east african railways consortium led by railroad development corporation won the right to operate the network. The timing and context of south africas privatisation process is difficult to defend on economic grounds, but. An evaluation of the policies, procedures and experiences by caleb m. Has nigeria benefitted from privatisation of the power sector.
The economic context before privatisation in ghana was similar to most african countries in the 1980s and 1990s. This document and any map included herein are without prejudice to the. This can be achieved through direct sale of the assets to the private sector. This was the first rail privatisation in africa which did not involve a parastatal operator. South africas finance minister laid out an ambitious 14point program on thursday to wrench the economy out of recession that included the sale of noncore assets and partial privatization of. Privatisation in the power sector navigating the transition.
Malis neighbour niger continues to suffer the effects of the 2010 drought and famine. Malawi railways was a government corporation that ran the national rail network of malawi, africa, until privatisation in 1999. Abstract the note analyzes zambias reasons, and measures for success in privatization. Our most essential basic requirement for survival, water, is being privatised. In this publication we look at some of the milestones that have been crossed and explore the next steps in the sale of 17 federal government power assets. Africa, there have been a dearth of examples of new railway building in recent decades, making the question of random placement somewhat irrelevant. It is defined as the transfer of state owned resources to private control. Another interesting indication, is the distribution of the aggregate sales value in percentage of g d p gross domestic product, and ratio per capita. Since 1996 some municipalities decided to involve the private sector in water and sanitation service provision through shortterm management contracts, longterm concessions.