IIARD International Institute of Academic Research and Development

Journal of Business and African Economy (JBAE )

E-ISSN 2545-5281
P-ISSN 2695-2238
VOL. 10 NO. 1 2024

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The Privatization of Public Services: A Review of Economic Efficiency and Political Consequences in Africa

Okafor, Jude Chukwuemeka, Chibuzor Chigozie Nweke, Osita James Igweike, Eze Kenechi Kingsley

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Abstract

This study examined the impact of public service privatization in Africa. It explores the economic benefits, political influences, and consequences for access to essential services. The study was an in-depth qualitative literature review. The research found that privatization's economic impact was uncertain. While it attracted investment and improve efficiency in some sectors such as the telecom, it lead to job losses and mixed overall growth. Success hinges on strong regulatory institutions and a sector-by-sector approach. The study found that political factors like corruption and elite capture distorted the process, hindering efficiency gains. Additionally, international pressure for privatization lead to rushed initiatives with negative consequences. Privatization of essential services also lead to price hikes and neglect of low- income areas, potentially worsening social inequalities. The study concluded that a careful design and impact assessments are crucial to mitigate these risks. The study recommends building strong regulatory frameworks to ensure transparency, competition, and consumer protection

keywords:

Privatization, Africa, Economic Efficiency, Political Factors, Access to Services

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References:

Ades, A., & Gerring, J. (2005). Shaking the foundations of corrupt regimes: Economic
liberalization and democratic change. World Development, 33(8), 1281-1300.

Agbonga, A. A., Adesakin, A. A., & Kareem, B. (2017). The impact of institutional quality on the
privatization-economic growth nexus in sub-Saharan Africa. Journal of African
Development, 19(1), 101-122.

Ajayi, O. I., & Ogunrinola, O. A. (2018). The impact of privatization on the performance of the
Nigerian aviation industry. Journal of Air Transport Management, 70, 1-8

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