For several decades, many countries in sub-Saharan Africa have given in to the privatization of strategic economic sectors. These operations, often justified by an urgent need for economic recovery, have paradoxically weakened the foundations of their economies. This situation has led to a significant loss of control over key industries such as electricity, telecommunications, the chemical industry and even banks, often sold off at ridiculous prices for the benefit of foreign groups.
Problematic
How can we explain that fragile states, in search of development and sovereignty, have agreed to sell strategic companies on often disadvantageous conditions? What are the economic and social impacts of these decisions, and what solutions can be considered to protect the economic heritage of African nations?
The causes of the fire sale
Bad management of public companies:
-Ineffective governance and lack of transparency.
-Poorly managed monopolies favoring excessive debt.
-Lack of control and accountability mechanisms.
-Economic and political pressures:
-Pressure from international institutions to privatize as part of structural adjustment programs.
-Influence of internal lobbies and decision-makers with little concern for national interests.
The impact on national economies
1 Loss of economic sovereignty:
2 Control of boards of directors by foreign groups.
3 Strategic decisions taken outside of local interests.
4 Underinvestment in local economies:
5 Repatriation of profits abroad.
6 Low contribution to the development of national value chains.
7 Harmful business practices:
8. Use of shell companies located in tax havens.
9 Setting non-competitive prices, creating imbalances for national economies.
An emblematic case: Senegal in the 90s:
The sale of a telecom license for 50 million FCFA, when it could have brought in up to 200 times more, perfectly illustrates the loss of opportunities for the country.
Our proposals
1 Review past privatizations:
a Investigate the conditions of transfers.
b Renegotiate unfair or opaque contracts.
c. Strictly regulate future privatizations:
2 Prioritize balanced public-private partnerships.
3 Impose clauses guaranteeing the transfer of skills and local investments.
Fight against unfair commercial practices:
4 Eradicate shell companies by requiring full transparency of transactions.
5 Impose reference prices to avoid undervaluation of assets.
6 Strengthen regional cooperation:
7 Involve sub-regional organizations in the regulation of privatizations.
8. Pool expertise to negotiate with international investors.
9 Train national executives:
10. Invest in the training of experts capable of protecting the economic interests of States.
The sell-off of strategic assets in Africa reflects a major challenge for states seeking economic sovereignty. Governments must take immediate action to protect their key industries, ensure better governance and prevent economic decisions from benefiting only external actors.
