Privatisation in Africa : a case for Botswana

Mamelodi, Anastasia Nkhumo (2002-12)

Thesis (MBA)--Stellenbosch University, 2002.

Thesis

ENGLISH ABSTRACT: In many countries privatisation has been embraced as an economic policy that serves almost as a panacea for many economic problems. In general the rationale is assumed to be that of welfare improvement. It is also expected to improve governments' macroeconomic position because state enterprises are frequently loss making and hence receivers of government funds. Privatisation is also perceived to contribute to the development of weak or non-existent capital markets to enhance domestic savings mobilization. Africa's investment climate and potential for economic growth have improved remarkably and although Africa accounts for only a small fraction of worldwide privatisation activities, privatisation is on the increase as more governments realize that the old ways of state ownership have failed to deliver the goods. Hardly any African country does not have some sort of privatisation in the pipeline. Botswana, which is the main focus of this paper, launched its privatisation programme in 1998, when the Cabinet adopted the privatisation policy. Privatisation has also been triggered by the increasing globalization of the world economy. Rapid growth in international trade and investment has made competitiveness in international trade an essential factor in a nation's ability to create jobs, raise real wages and generate wealth. For many African countries, privatisation has become the only effective method of raising investment capital on favourable terms. High levels of past public sector borrowing have burdened many nations with large levels of debt. Although privatisation efforts differ substantially from country to country, there is a strong common economic rationale underlying the various decisions to privatise. African countries privatise for solutions to immediate financial, economic or political crises and due to the demands of International Donor Agencies, such as the World Bank and the International Monetary Fund. Privatisation in Botswana is different in the sense that it has come from the desire to improve efficiency in the delivery of services, promote competition and increase productivity of enterprises. Advocates of globalization promote the efficiencies of speed and technology and the benefits of privatisation as the best approach to economic development, based on an assumption that it is better for all nations to have a well-connected international network to achieve goals of economic development.

AFRIKAANSE OPSOMMING: In baie lande word privatisering as 'n ekonomiese beleid aangegryp as 'n wondermiddel vir talle ekonomiese probleme. Oor die algemeen word aangeneem dat die grondrede hiervoor die verbetering van welsyn is. Daar word ook verwag dat dit die regering se makro-ekonomiese posisie sal verbeter, aangesien staatsondernemings dikwels verliese ly en dus ontvangers van staatsfondse is. Privatisering dra klaarblyklik ook by tot die ontwikkeling van swak of nie-bestaande kapitaalmarkte ten einde plaaslike spaarpogings aan te moedig. Afrika se beleggingsklimaat en potensiaal vir ekonomiese groei het merkwaardig verbeter en alhoewel Afrika vir slegs 'n geringe gedeelte van wêreldwye privatiseringsaktiwiteite verantwoordelik is, is privatisering aan die toeneem namate regerings besef dat die ou stelsel van staatseienaarskap nie suksesvol is nie. Byna alle Afrikalande het een of ander vorm van privatisering aan die kom. Botswana, wat die hooffokus van hierdie studieprojek is, het in 1998 sy privatiseringsprogramme van stapel gestuur toe die Kabinet die privatiseringsbeleid goedgekeur het. Privatisering word ook aangehelp deur die toenemende globalisering van die wêreldekonomie. Snelle groei in internasionale handel en investering maak mededingendheid in internasionale handel 'n noodsaaklike faktor in 'n land se vermoë om werk te skep, reële lone te verhoog en welvaart te genereer. Vir baie Afrikalande het privatisering die enigste doeltreffende manier geword om beleggingkapitaal op gunstige voorwaardes te verkry. As gevolg van hoë vlakke van openbaresektorlenings in die verlede sit talle nasies opgesaal met groot skuldvlakke. Alhoewel privatiseringspogings aansienlik van land tot land verskil, is daar 'n sterk onderliggende gemeenskaplike ekonomiese grondrede vir die onderskeie besluite om te privatiseer. Afrikalande privatiseer as 'n oplossing vir onmiddellike finansiële, ekonomiese of politieke krisisse en weens die eise van internasionale skenkerorganisasies soos die Wêreldbank en die Internasionale Monetêre Fonds. Privatisering in Botswana verskil in dié opsig dat dit spruit uit die behoefte om doeltreffendheid te verbeter in die lewering van dienste, mededinging aan te moedig en die produktiwiteit van ondernemings te verhoog. Voorstanders van globalisering ondersteun die doeltreffendheid van spoed en tegnologie en die voordele van privatisering as die beste benadering vir ekonomiese ontwikkeling, gegrond op die aanname dat dit vir alle nasies beter is om 'n effektiewe internasionale netwerk te hê om doelwitte van ekonomiese ontwikkeling te bereik.

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