The Public Sector, Privatization, and Development in Sub-Saharan Africa

by James S. Guseh

Abstract

At the time of independence, nearly all African countries identified capitalism with neocolonialism and therefore adopted a statist approach to economic development, with government being the major instrument of development. As a result, the size of the public sector grew through the creation of public sector enterprises. On the other hand, over the years there has been a slowdown in economic growth, especially in agricultural output. With deep internal economic crisis, shortage of foreign capital and debt obligations, many African countries adopted in the 1980s certain structural adjustment measures required by international donor organizations and creditors as a condition for economic assistance, with privatization usually being a component of the structural adjustment programs. Thus, many African countries have embarked on the policy of privatization and other market-oriented reforms. Empirical investigations as to whether or not privatization promotes development of the issue have produced mixed results.

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