ZIMBABWE — What should the role of the state be in the war against poverty in post colonial Africa? 

 

After 52 years of independence, the experience of state ownership of economic assets in post colonial Africa is mixed and what emerges is that there exists no empirical evidence supporting the proposition that the state can be a more reliable and efficient manager of assets.

 

 

The absence of black corporate role models in post colonial Africa is not accidental but is largely a consequence of policies that were put in place to exclude blacks from meaningfully participating in the formal economy. 

The enlightened black elites who took over the control of the state saw in the state a convenient window to redirect resources to the poor as well as a friendly investment platform to advance the cause of nation building. 

 

However, regrettably the state has not been effective as a shareholder.

In response to the ineffectiveness and inefficiency of the state as a shareholder of productive enterprises, many of the African countries now have adopted market friendly policies notwithstanding the absence of serious domestic capitalists. 

Africa’s key productive assets remain foreign controlled resulting in critical decisions on investment being made outside the continent. 

South Africa is Africa’s youngest country and the most developed but already there are calls for the nationalisation of economic assets. 

The labour movement, a key alliance partner of the ruling African National Congress (ANC), together with the South African Communist Party (SACP) has been vocal about the need to use the state as a an instrument of asset ownership transformation. 

In response to the country’s energy crisis, South Africa's largest mineworkers union, the National Union of Mineworkers (NUM), on 23 May 2008, called for the nationalisation of the country's coal mines.

The NUM president Senzeni Zokwana said:  "If the ANC is saying that the price of coal is a problem why must you buy coal that is expensive, why can't you nationalise one mine or two or three and begin to say this mine is State-owned to feed Eskom."

In February 2008, the ruling ANC's secretary-general, Gwede Matashe, also said that the country had to create more State-owned enterprises in the mining industry.  He particularly highlighted the platinum industry.

Nationalization is the act by which a nation takes possession of assets without requiring the owner's consent, with or without payment of compensation.  The link between nationalism and nationalisation is often direct and causal.

In many developing countries the call for nationalisation is mostly associated with the level of mistrust between state actors and the owners of private enterprises.  Nationalisation is not unique to developing countries but has been used by many developed countries concerned about job losses as well as in response to economic crises. 

The main wave of nationalization in Britain was under the Labour Government of 1945-51 when public utilities such as electricity, gas, and the railways, and basic industries such as coal, were brought into public ownership.

The steel industry was nationalized, and then partially denationalized by the succeeding Conservative Government, only to be renationalized by the Labour Government of 1966-70. Aerospace and shipbuilding were nationalized by the Labour Government of 1974-9.

Failing companies such as British Leyland were also coming into public ownership, but with government shareholdings placed under the supervision of the National Enterprise Board rather than as public corporations.  

The political, constitutional, and administrative problems associated with nationalization has created a lively conversation point on such questions as what form the relationship between state and the public corporations should take and how the legislature could secure the accountability of the nationalized industries.

 

The emergence of sovereign funds as players in the global marketplace has given a new impetus to the call for nationalisation. 

 

However, in the case of post colonial Africa, the political actors operating in the state are never accountable to the citizens to make nationalisation a viable policy instrument. 

There is a deeply held view in Africa that ownership change alone can be an effective instrument for promoting resource utilization and allocation efficiency. 

 

To the extent that the actors in the state in most of the African economies lack commercial and business experience, the viability of a strategy premised on the state assuming the ownership role is, therefore, questionable.

 

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