Privatisation can work for African countries
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RE: “Privatisation strategy: Did it enhance Africa’s economic competitiveness?” (The New Times, November 28).
Successful privatisation programmes depend on several conditions, such as a credible mechanism for transferring state owned enterprises to local (or at least regional private hands). This could happen via capital markets, or sales institutions such as trade unions, business associations or pension and insurance companies.
Such a strategy proved successful in various privatisation deals I worked on in Ghana, where we were advisers on several privatisations that maintained Ghanaian ownership, and more importantly, changed the incentives under which those companies operated.
Instead of a government board susceptible to inefficient decisions management had to run the companies based on sound business practices. The solution is not the same for all SOEs, but there are ways to improve the chances for a successful privatisation.