CHAPTER VI

THE PRIVATISATION PROCESS IN AFRICA:

ETHICAL IMPLICATIONS

R. MUNYONYO

INTRODUCTION

In the last 20 years, a majority of Sub-Saharan Africa (SSA) countries have implemented comprehensive economic reforms and restructuring programmes dictated by the World Bank, International Monetary Fund (IMF), and other multilateral agencies.  For countries like Uganda and Ghana, these reforms and structural adjustments programmes (SAPs) are so successful that their economies have been hailed by the World Bank, IMF, and other multilateral agencies as the most liberal economies in Sub-Sahara Africa.[i] These comprehensive economic reforms have involved the liberalization of the exchange and trade regimes, the abolition of the Industries Licensing Act, the promulgation of new Investment Codes, the liberalization of pricing and marketing agricultural products, and above all, the privatization of state-owned enterprises ranging from small-scale commercial to large—scale industrial establishments.[ii]

In all these programmes, the input of the people is conspicuously absent. Even in those governments which came to power singing the power of the people, when it came to the implementation of these economic reforms they followed Aidan Southall’s advice that Africa must pursue capitalism under duress because it is powerless to implement any other option,[iii]  even when supported by the people.  The case of Uganda clearly illustrates this argument.  Prior to 1986, before the National Resistance Movement (NRM) came to power, the Obote II government had implemented these economic reforms.  The NRM had fought the Obote II government, to a large extent for the latter’s economic policies, which the NRM had labelled “contortions of people like Obote with the advice from the top brass of the IMF.”[iv]  To most of the NRM radicals, the IMF/World Bank programmes were simply imperialistic.  Point No. 5 of  the NRM’s Ten-Point Programme was categorical in its definition of what “an independent, integrated and self-sustaining national economy” was. It involved the structural reconstruction of the asymmetrical economy, and turning it away from dependence on one or two exports (coffee or cotton) and the import largely of luxurious and expensive manufactured goods.[v] Point No. 5, then concludes:

Without an independent, integrated and self-sustaining national economy, Uganda will never stabilise.   Much of the present turmoil is as much due to political mismanagement as it is to a narrow economy that cannot accommodate the aspiration of the many groups within our society.[vi]

What obtains from the above arguments is the central argument we want to defend in this paper, that many African governments after taking leadership roles soon shade their revolutionary appearances and embrace capitalism en-masse seeing it as inevitable.  The problem is that the people of the continent or country are hardly given the right freely to choose their economic and social system without outside interference or constraint of any kind, and to determine, with equal freedom, their model of development.

This is true of the privatization process in Africa. This process which did not pose fundamental ethical questions such as: What and who is defining privatization? Who participates in the privatization process?  Who benefits from it?  What are the actual effects on the poor Africans and the environment?

The paper addresses these contradictory trends in the privatization process.  It attempts to locate the ethical implications that may have propelled the trend toward comprehensive privatization programme and a private investment strategy.  Given the emphasis of many African governments on providing conditions to facilitate a reasonable standard of living for all people as a condition for the enjoyment of the social benefits accruing from a democratic and just society, to what extent has the privatization strategy laid the foundation for such a system of production, distribution and consumption?

The purpose of this discussion is not to condemn or credit the privatization process in Africa.  Rather, it is an attempt at presenting the realities both of the few rich and of the poor majority Africans in the context of this process.  If by so doing criticism is extended to the process of privatization, this will provide a way of opening up closed composite of challenges that sometimes is felt through the weight it can impose on those who are holding it in their hands, namely, the majority of poor Africans.  It will be to their benefit and, hopefully, to the benefit of the few rich who are contracting the process.  Either they will make a U-turn and initiate programmes that are ethical, i.e, pro-people, less profit-driven and inevitably anti-imprerialist, or at least they will initiate the reforms necessary to save the poor Africans from the evil of market-driven economic programmes.

PRIVATISATION AND GLOBALISATION

The privatization process in Africa is not peculiarly African.  To a large extent, it is part of the globlisation process.  Yash Tandon defines globalisation as “The final conquest of capital over the rest of the world.”[vii] However, he credits globlisation with “the spread of cultural pluralism, the development of technology and productive forces, the global awareness of the underlying unity of humankind, and more recently the (partial) return to nature as an inherent part of life in all its many forms.”[viii]   Despite the positive impact of globalization at the economic level, Africa remains a source of raw materials for the West; hence, the privatization process in Africa remains largely exploitative.  Such a process, in our view, creates a fertile ground for foreign and capitalist alliances aimed at maximizing profits through the exploitative relationship between Third World countries and developed capitalist countries. Thus, it is undesirable.

The growing inequality in the world is linked to the effects of liberalization, deregulation and privatization, in a word, to globalisation.[ix] The United Nations Development Programme (UNDP) in its annual Human Development Reports has urged action to monitor and control the globalization process.  In 1996, UNDP’s Human Development Report showed that “the gap in per capita income between the industrial and developing worlds tripled, from US $5,700 in 1960 to $15,400 in 1993”.[x]  The report continues to say:

The world has become polarized, and the gulf between the poor and the rich of the world has widened even further.  Of the $23 trillion global GDP in 1993, $18 trillion is in the industrial countries—only $5 trillion in the developing countries, even though they have nearly 80 percent of the World’s people.  The poorest 20 percent of the world’s people saw their share of global income decline from 2.3 percent to 1.4 percent in the past 30 years.  Meanwhile, the share of the richest 20 percent rose from 70 percent to 85 percent that doubled the ratio of the shares of the richest and the poorest – from 30:1 to 61:1.[xi]

In the same report, it is indicated that Africa is the hardest hit with 20 countries having a lesser per-capita income today than 20 years ago.  The continent is the home of two-thirds of the least developed countries, and the more painful fact is that a continent that had a food-surplus 20 years ago is now in food-deficit.

What these statistics show is that capitalist globalisation, of which the privatization process in Africa is but a part, has been a disaster for Africa both in human terms and in terms of damage to Africa’s natural environment.  The multilateral agencies (IMF and World Bank) who propel the globlisation process and accuse the policies of Africa governments forget that they wrote various documents on which these policies were based—from import substitution to export promotion.  It is paradoxical that whereas capital—led globalisation has led to Africa’s poverty and development crisis as we have endeavoured to show above, it is also miraculously suggested as its solution.

Korten has argued convincingly that the globalisation process not only burdens the developing countries.  In the developed countries, he identified six myths behind globalisation, namely:

The myth that growth in Gross National Product (GNP) is a vital measure of human well-being and progress.

The myth that free unregulated markets efficiently allocate a society’s resources.

The myth that growth in trade benefits ordinary people.

The myth that economic globalisation is inevitable.

The myth that global corporations are benevolent institutions that if freed from government interference will provide a clean environment for all and good jobs for the poor.

The myth that absentee investors create local prosperity.[xii]

The six myths behind globalisation have singly or in combination led: to the declining quality of life of ordinary people; to increase human burden on the earth’s regenerative systems—air, water, fisheries and forestry systems—beyond what the planet can sustain; to transferring wealth from the many to the few; to the so-called trade-agreements guaranteeing the rights of global corporations to move both goods and investments where ever they wish; to global corporations investing millions of dollars in advancing the globalisation policy agenda; and to creating a global financial system that is less accountable to any human interest or institution.[xiii]

The annual meeting of the World Economic Forum which met in Davos, Switzerland, in 1996, agreed with Korten that the globalisation process is producing disastrous consequences that threaten the political stability of the developed countries’ democracies. They observed that:

Economic globalisation is causing several economic dislocation and social instability.

The technological changes of the past few years have eliminated more jobs than they have created.

The global competition “that is part and parcel of globalisation leads to winner—take all situations; those who come out on top win big while the losers lose even more.

Higher profits no longer mean more job security and better wages.  “Globalisation tends to de-link the fate of the corporation from the fate of its employees.”

Unless serious corrective action is taken soon, the backlash could turn into open political revolt that could destabilize Western democracies.[xiv]

The danger of the globalisation process was also echoed by the President of the Society for International Development (SID), the former UN Secretary General, Boutros Boutros-Ghali, when he said:

We find ourselves on the verge of being overwhelmed by forces that we have created and over which we are losing control. . . .  The market and science were considered during the European Enlightenment as tools of human liberation.  But they have generated new forces which now threaten the livelihoods and even existence of millions of men, women and children worldwide.  If the present trend continues, we may expect that the rich and the powerful will use ever more of their power and wealth to protect themselves against the social disruptions that are bound to occur.  The North will close itself to the South bringing about a new iron-curtain.[xv]

The dangers posed by the globalisation process entail two questions of fundamental  importance to the topic we are discussing:

Will people and communities control resources and economies and be able to set their own goals and priorities based on their own values and aspiration? Or will these decisions be left to global financial markets and corporations that are blind to all values save one—instant financial returns?

Will the life-sustaining resources produced by the regenerative capacities of our planet’s eco-systems be equitably shared to provide for the material needs of all of us who inhabit this bountiful planet as well as our children and their children unto the nth generation?  Or will we allow a global economic system that is now functioning on auto-pilot beyond conscious human control to consume and destroy the ecosystem and our social fabric in its insatiable quest for money?

These questions and the challenges they offer are to be discussed by elaborating the process of privatization in Africa.  As we have said earlier there is a myth that free unregulated markets efficiently allocate a society’s resources and that global corporations, in private hands, are benevolent institutions that provide a clean environment for all and good jobs for the poor. State intervention in Africa has been subjected to a massive assault, by companies spearheaded by Western governments, global corporations and international multilateral financial agencies.  State-owned enterprises, in particular, have been portrayed as extremely inefficient, heavy financial losers and real burdens on the budgets and the banking systems, as they absorb resources in the form of transfers and sudsidies.  Above all, they have been accused of creating conditions unfavorable to private sector growth as governments have intervened to protect them against competition for ideological, rather than economic reasons.[xvi]

The attack on state-owned enterprises initially took the form of exposing them to domestic and external competition: eliminating state subsidies, increasing the autonomy of the enterprises from government interference and noncommercial goals, and developing institutional market mechanisms to drive performance and increase profitability.  The reasoning was that, to a large extent, the more enterprises are diverted from social goals, the more they become commercially successful.[xvii] However, the forces for total privatization as a means to create a more diverse market economy, to encourage private enterprises and expand the private sector in general, to promote macro-economic or sectoral efficiency and competitiveness and to eliminate inflexibility and rigidities, have temporarily won the day. In a word, globalisation has taken the driver’s seat.

Other arguments in favour of privatization, at the global level, include:

The need to establish or develop efficient capital markets,

allowing better capturing and mobilization of domestic products,

promotion of domestic and foreign investments, thereby, promoting the integration of the domestic economy into the world economy,

creating and maintaining employment,

promoting new technologies and innovation through the employment of modern methods of production,

increasing the quality of goods and services produced, and

Allowing enterprises to enter global alliances seen as essential for survival.[xviii]

The range of benefits from privatization is always extended to the realm of budgeting and financial readjustment.  It is argued that privatization leads to maximum returns that enable the government to tax more, to fund government expenditure, trim the public sector deficit or pay off public debt,[xix] to mobilize private investments to finance investments that the government cannot afford to finance, and to reduce future risks of demands on the budget inherent in state-ownership of business which often are in financial trouble due to mismanagement and corruption.[xx]

Other defences of privatization extend to the sphere of income distribution and redistribution. Private ownership is seen as a means to foster broader capital ownership and the promotion of popular or mass capitalism, the development of the middle class, and the fostering of economic “development” of particular ethnic or racial groups long marginalized by social structures.  Privatisation is also seen as a means to encourage employee ownership, and, therefore, increasing efficiency and, in some cases, providing a fertile ground for those involved in management and implementation of the privatization process to enrich themselves.[xxi]    This, however, is rarely admitted by policy formulators, though it has been real as the examples of privatization of state-owned enterprises in Africa, have shown.

Lastly, the privatisation of state-owned enterprises carries various targets. These include:

The reduction of the size and scope of the public sector or its share in economic activity,

turning the government to the tasks of creating an environment conducive to the private economic activity,

guaranteeing that future governments will not reverse the trend towards the dominance of the private sector,

reducing the sphere through which corruption and other malpractices favour state bureaucracy at the expense of the private capitalists, and

in some cases, creating conditions favourable to a particular class or group in control of the state.[xxii]

Clearly, there are numerous social policies that can better meet these social needs than pure privatization, except that at the moment capital-led globalisation does not favour them.   The race to privatize defines the parameters of progress. The latter is itself defined in the context of globalisation, as we saw earlier in the economic myths behind globalisation it is seen as the only means of reducing African countries from misery.  Beyond the images of progress that African countries should become carbon copies of the West because capital-led globalisation is taken as the only solution to poverty.  As the editors of New People correctly point out:

Our thirst for justice is equated with a thirst for liberal democracy, our desire for human development is likened to the possession of Western products.[xxiii]

To give more meaning to what we are discussing, the privatization process in Uganda is more revealing.  A team of economic consultants attached to the International Development Research Centre (IDRC) was hired in 1986 to study the options available to address the problem of rehabilitating and reconstructing the economy, as if the NRM had not studied the same issue in the bush with the people. In its Ten Point Programme, the NRM and the people agreed on the steps to be taken to build an independent, integrated  and self-sustaining economy. They were spelled out as:

Diversification in agriculture away from the present narrow cash crop base,

an extensive process of import – substitution in order to reduce the import bill, especially of basic consumer goods,

processing of raw-materials so that more value is added, and

building of basic industries like iron, steel and chemicals.

The IDRC team argued, diverting from the wishes of the people:

Clearly, there must be an adjustment policy. Breaking the inflationary expectations psychology will be essential for general macro-economic stability. Likewise, sound domestic growth and recovery will be impeded unless external balance is achieved quickly.[xxiv]

The IDRC report rejected any alternative strategy, except capital-led globalisation. The report argued:

. . . the control model failed as a strategy for balancing either the balance of payment, or the budget—the two key problems which need to be addressed . . . the most implausible assumption was the rate of inflation fell to—25 percent  per year and stayed there for three years. . . . Even then the balance of payments remains at their current, inadequate levels.  The budget is also grossly out of balance each year. [xxv]

The economic strategy proposed by the IDRC team won the day because as early as 1986 the ideological diversity within the NRM had come to the fore.  While commander Katirima was stressing the need for socialist reconstruction and the “need to be vigilant against implerialism and capitalists,” Dr Samson Kisekka, then Prime Minister, was calling for self-reliance on the basis of  national capitalism in collaboration with foreign investors. The latter position triumphed, standing as it did for “national capitalists and all potential capitalists” being taken on board along with the poor, ignorant and diseased peasants.[xxvi]

In short, an adjustment policy, in which the so-called inefficient state-owned enterprises were to be eliminated as a force in the economy in favour of private capitalists, was to be pursued. This is contrary to Tumusiime-Mutebile and others who view SAPs, including privatization, as “exclusively a Government of  Uganda reform.” [xxvii]^.

The truth of the programme being externally driven is further reinforced by Tim Lamont, an economic planning advisor in the Ministry of Finance and Economic Planning, when he notes:

Given the shattered state of the economy in 1986, Uganda has had to rely heavily on donor support. The Economic Recovery Programme launched in 1987 was assisted by a structural Adjustment Fund (IMF) and the World Bank Economic Recovery Credits, plus assistance from other multilateral and bilateral donors. Substantial IMF and IDA support continued over the years through an Enhanced structural Adjustment Credit from the IMF and two Structural Adjustment Credits for IDA, and such funds do not come without conditions. Hence, there is no denying that donors have had a large part to play in helping to shape policy in Uganda(emphasis added).[xxviii]

Add numerous World Bank, IMF and other donor policy instruments, and Tumusiime-Mutebile’s claim that the government’s SAPs, and above all privatization are “Government of Uganda-owned” is disapproved.[xxix]

Privatisation and private investment promotion have indeed gone hand in hand and are slowly extending into the social sector, including health and education, and even administrative activities such as tax and garbage collection. It needs to be noted that the programmes are not homogenous. In Africa alone, a variety of privatization programmes are undertaken, including total transfer of state-owned enterprises, joint ventures and share ownership, capitalization  programmes, and offering financial incentives to employees and small-holders.[xxx]    In the sections that follow, we shall see whether the privatization process has facilitated the achievement of a reasonable standard of living of the people in Africa or not. Only when this evaluation is made can we do justice to the debate over the achievements and challenges of the privatization programmes in Africa, as well as their ethnical implications.

PRIVATISATION AND DEVELOPMENT

One could not appreciate the impact of the privatization process in Africa if one does not initially look at the meaning of development, because the reasonable standard of living of the people which privatization wants to achieve is a function of development. The meaning of the term “development” has been offered by E. Roy Ramirez, who claims that we need to forge a new concept of development, in order not to confuse the latter with modernization, and because it is preferable to decide things for ourselves rather than to have others decide things for us.[xxxi] Ramirez would evaluate any policy or project intended to cause development or improve the standard of living of people by an ethnical standard. This should:

. . . not let forms of oppression pass  for liberty, commercial pseudo—culture and the consumption of fantasies for superior culture, diverse manifestation of plunder for progress. Superstition should not pass for nationality, economic inequalities for justice or fear for peace. [xxxii]

This approach to development proposes a new and expanded concept of development, which  “does justice to the problem of the relations between advanced countries and other world countries, including the treatment of the problem of individual development within social-economic development.”[xxxiii]   In addition, Kanyandago proposes the principle of endogeneity, which is a constant search to develop from within by building onto what people are and have.  He agrees that the principle does not rule out borrowing from one another, but we should not suppress or underrate the values of a person in need.[xxxiv]  What these arguments boil down to is that the people, particularly the poor majority are often rich in knowledge, and this resource must be tapped to their advantage.  We have to ensure that the knowledge-rich, but economically poor people are not robbed of the only resource in which they are rich, i.e., their knowledge, by transforming our ethical and institutional norms, including those dealing with the intellectual property rights of individuals as well as communities.  As already seen, we know that capital-led globalisation denies this right to the poor. Our definition of development must recognize that the poor are obviously not so poor that they cannot think, create or transform the world around them.  The challenge is to recognize the poverty of our imagination and those conceptual tools that recognize, respect and reward grass-roots innovations. We need to encourage the revival of “traditional” knowledge systems and to strengthen local market systems that directly confront global corporations and stress direct democratic action against globalisation and its child, privatization.

Goulet and Steidlmier give criteria, which can be used to evaluate any policy that encourage development.  Goulet argues, for example, that questions for evaluation include whether a policy of privatization favours economic equity or not, whether it consolidates fragile local cultures or not. [xxxv]  Furthermore, Steidlmeir gives us other criteria, namely:

Do the societal members have the freedom and opportunity in their society’s development dialogue?

Do the societal members make proposals concerning the nature of good growth, fair distribution, citizen responsibility, and just incentives and sanctions?[xxxvi]

Given the relevance of SteidImeir’s arguments to our discussion, we quote him in detail:

When it gets down to the concrete, then I advocate a certain qualitative orientation in development policy based on the following priorities: the liberty of the oppressed over the freedom of the more powerful, the social opportunity of the marginalized over the exclusion by certain elites, the needs of the poor over the mere wants of the wealthy, the duty to contribute to the common good according to ability rather than to be apathetic or merely seek narrow interest, and the reinforcement of patterns of social justice through incentives and sanctions rather than surrendering the determination of due process to mere group egoism or vindictiveness.  Each of these goals is a value statement in the sense that it indicates priorities regarding what should happen.  I am well aware that others may disagree. Nonetheless, the positions that any society takes with respect to any of these questions will directly determine the overall orientation of development as well as the policy instruments and strategies.[xxxvii]

The privatization strategy—as indeed all economic reforms—implemented in Africa do not meet the criteria discussed above.  As the case of Uganda illustrates, the design and implementation of the policy of privatization did not involve societal members, even if the institutional political structure established by the ruling NRM government that would have allowed their participation, were in place. The present day political institutions of local councils (LCs), with their emphasis on their popular, participatory grassroots approach to public policy would have resulted in a politically rational policy. Unlike the military victories in which the poor peasants in the liberated areas played a decisive role in the political system they shaped and participated in, through the LCs, the economic sphere remains defined for them. In short, the economic measures of privatization in Africa were not just imposed from the above (that is from politicians, policy-makers down to the victims/policy consumers), they were actually imposed from abroad by the IMF and the World Bank.  The privatization policy in Africa, therefore, did not take into account people’s input and concerns.

The IMF-World Bank driven privatization programmes are mechanisms to perpetuate the rule of imperialism in Africa, and the multilateral financial institutions are helped by the “local reactionaries”— the elite.  The latter do not pose the question that Robert Chambers asked about five years ago:  “Whose reality counts? The reality of the few in centres of power, or the reality of the many poor at periphery?”[xxxviii]  Thus, “privatization” means simply the selling of state properties to private owners who are rich enough to take over the giant companies. Privatisation is also known as “divestment or divestiture,” words that connote dispossession and deprivation and, to that extent, imply loss of valuable property on the part of the state to the few rich. The economy thus created is in the hands of the few rich, which contradicts what the second Vatican Council, in its most influential pastoral constitution: “On the Church in the Modern World”, said:

The basic purpose of economic production does not consist merely in the increase of goods produced, nor profit nor prestige; it is directed to the service of man (and women), that is, in his (her) totality, taking into account his (her) material needs and the requirements of his (and her) intellectual, moral, spiritual and religious life.[xxxix]

Vatican Council II deplored a system that ignores social justice, equality and environmental production.  Such a system, characterized by Markhijani as a “war system” has merely “limitless consumption and acquisition” as the “overriding goals,” rather than human, spiritual and environmental concerns. In the words of the Vatican II Council:

In the sphere of economics and social life, too, the almighty and entire vocation of human person as well as the welfare of society as a whole have to be respected and fostered; for man (woman) is (and has to be) the source, the focus and the end of all economic and social life.[xl]

We, therefore, call for human-centred development rather massive privatization, which we have seen plundering the poor majority’s resources to enrich the few rich. What we gather from these arguments point to many important lessons. One such lesson is that economies should be local, rooting power in the people and that communities who realize well-being depend on the health and the vitality of their local ecosystem.

If it is protectionist to favour local firms and workers who pay local taxes, live by local rules, respect and nurture the local ecosystem, compete fairly in local markets, and contribute to community life then let us all proudly proclaim ourselves to be protectionist.[xli]

We need to note that these choices are not isolationist. On the contrary, they create a foundation for creative cooperation with our neighbors whether they are developed countries or other countries or not. Their goals are: to share experience, ideas and technology; to join in international solidarity in rewriting the rules of the global economy; to favour local over global businesses; and to encourage cooperative relations among people and communities. It is our consciousness—our ways of thinking and our sense of membership in a large community—not our economies that should be global.[xlii]

IMPACT OF PRIVATISATION

Our discussion so far points to the fact that we should not indulge in the debate about the merits and demerits of privatization in Africa because such a debate is misdirected.  We need to remember that the privatization process in Africa is under the management of global imperialism, the World Bank, IMF and other multilateral agencies.  Is it, therefore, wise to debate what is irrelevant to Africa’s independent, self-sustaining and continentally integrated economy?  If, however, such debate would produce a lively discussion about how the impact of the privatization process fails to penetrate the reality of the poor majority and the alienating experiences they face when confronted with the privatization programmes aimed at profit maximization, then the task would be worth undertaking.  The discussion now follows attempts to penetrate the inner operations of the privatization process as related to the majority of the people of Africa.

Many African countries that embraced the policy of privatization have had the structure of their economies changed, at least in comparison with what they were two decades ago.  In the Ugandan case, in 1996-1997, GDP growth averaged 7.5 percent compared with the average of 5.7 percent per annum in the 1989-1991 period. The balance of payments also improved putting foreign exchange reserves at US$450 million in 1994-1995 equivalent to 4 months of imports.[xliii] Overall on the African continent, Uganda’s economic performance ranked ninth in 1996-1997.

Despite the rosy growth statistics in many African countries, the debt burden remains real and continually forces upon governments more IMF-World Bank conditions. Extended debt service has continuously siphoned off the few resources that would otherwise have been used to finance human development through the provision of basic social services.

Many of the privatized enterprises have improved their levels of efficiency, achieved high productivity levels, and contributed substantially to exports and government revenue. In addition, expansion, refurbishment, installation of new machinery, increase of capacity and storage facilities have all been carried out by privatized enterprises. However, “bad” aspects of the investments need to be noted. Tororo Cement Works in Uganda, for example, is reported to have begun the production of asbestos pipes using a raw material condemned for causing asbestosis. Such investments are banned in many developed countries.  Secondly, incidences of underpayment, physical abuse, and racist treatment have been reported, while the very products produced are mostly luxury-oriented—beer, soft drinks, tobacco, perfumed soap, steel products mainly for high-rise buildings, and security fences that are geared to the middle class market rather than the necessities of the ordinary people.

In African economies where privatization has been implemented, some marked growth has been recorded in the fields of education, health and sanitation, food production, and political participation, all seen as vital for private investment. Secondly, a number of poverty eradication schemes have been launched. The sales of enterprises and taxes accruing from the private sector have played a major part in the running of projects aimed at enhancing the local people’s potential and contribution to better living conditions.[xliv] Finally, the proceeds have facilitated the establishment of the private sector.  While these achievements are applauded, the fact is feared that states have almost totally relinquished the task of mobilizing the local populations for their own development to the people and a diversity of community-based organizations (CBOs), nongovernmental organizations (NGOs) and the local councils. Substituting with foreign charities for the poses a new threat.

Privatization has facilitated a transfer of technology as well as managerial skills that have brought about value-added output, which has led to increased capacity utilization, quality output, and production diversity.[xlv] Yet there are negative consequences of the technology transferred which, in most cases, is not environment-friendly.

There is an increasing trend towards privatized social services as reflected in decreasing government expenditure on education, health, water, sanitation and nutrition. This has resulted in the reduced quality of public administration and services at a time when workers are being retrenched the military demobilized and real salaries lowered. The constant outcries over-delayed payments to the retrenched workers have been often heard, and the loss of jobs in privatized industry is now too common to be a temporary phenomenon.[xlvi]

Privatization, it is argued, has made ordinary goods and services available, but has also it made them necessarily accessible and affordable. The programme has been urban-oriented, urban based, and a middle-class phenomenon. Consequently, most of the privatized enterprises, just as most of the new private investments, crowd around Africa’s capital cities. Rural Africa remains stuck in the scarcities of the basics of life and are denied vital monetary, financial and industrial services.

CONCLUSION

It has been indicated throughout this discussion that for any development policy to be ethical, it must have the input of the people for which the policy is intended, as well as guarantee equality and the protection of local cultures.  We saw, also, that privatization policy in  Africa did not meet ethical standards, i.e., the people were never involved in its design and implementation, and resources were transferred from the people to a few rich, thereby negating examples of  local innovations and  entrepreneurial activities which make communities self-reliant. This, therefore, means we have to think seriously of alternatives of a more humane system to be born in Africa. We need to direct our thinking by not doing what imperialism demands us to do. It is time to assume responsibility for creating a new human future of just and sustainable communities freed from the myth that agreed competition, and mindless consumption, are paths to individual and collective fulfillment. It will take millions of people—linked together into a powerful political coalition aimed at political reform—to win the war that global capital is waging against us.

At the national level, we need to embark on a successful national democratic revolution (in which the majority of the workers, “peasants,” intelligentsia and the petite-bourgeoisie and “national” bourgeoisie (all of which are dominated by finance-capital are involved), to initiate a process of economic development, rather than economic growth, in which the people benefit.  Only on the basis of this type of revolution can there be achieved an actual privatization of the means of production through democratization of the production and the exchange processes and  an equitable sharing of the national resources.

At the continental level, we need to recognize Africa’s total inability and incapacity to carry out a “revolution.” We discussed Balkanization above. Our stand should be to reject the continued Balkanization of the continent, which merely turns nation-states into small unviable economic units with small markets and a narrow resource base. There is need for continental and, at the very minimum, regional unity. The need to diversify and intensify intra-African trade and cooperation as a means of overcoming the problem of small markets, inefficiency, and lack of productivity  is recognized. There is need also for the removal of trade barriers, rationalized production and specialization, to reduce competition among African countries and to avoid unnecessary duplication, especially in respect to large-scale industries and joint use of resources on research and development.[xlvii]

Finally, the role of the state in the development of its people must be clearly defined. The Asian Tigers were able to facilitate finance capital’s accumulation through the use of repressive military regimes and other undemocratic means in 1960s and 1970s. They provided extensive protection for regimes of import-substitution before achieving export-led growth. State intervention was, therefore, a major factor.[xlviii] Yet in Africa, global capitalism calls for democratization and the withdrawal of the state from active management of economic and social relations, except to guarantee that wages remain low, that the reserve army of unemployment be swelled by retrenchment, and that a market of luxury goods (beer, soft drinks, cigarettes, etc.,) be created through the culture and economics of private enterprises and NGOs.[xlix] The failure of privatization experiments on other continents, particularly in Asia and Latin America, are barely highlighted, lest people have data to compare.

NOTES