South African researchers have sparked a timely debate with their new paper on SSRN, positioning reprivatization as the emerging standard across Africa. Published just yesterday, 'Reprivatization: The Emerging Standard in Africa' by Dr Joseph Mithi and co-authors Douglas John Chikhowe and Joseph Mithi (PhD) delves into the shift from struggling state-owned enterprises (SOEs) back to private hands. As African economies grapple with inefficient public monopolies, this literature review highlights how reprivatization could unlock growth, efficiency, and investment.
The paper arrives amid South Africa's own SOE crisis, where entities like Eskom and Transnet drain billions in bailouts while delivering poor service. With load shedding crippling industries and port delays hampering exports, the timing feels prescient. The authors, affiliated with Durban University of Technology (DUT), IIE ADvTECH, MANCOSA, and the University of South Africa (UNISA), bring academic rigor to a policy hot topic.
Authors Behind the Research
Lead author Dr Joseph Mithi is an accomplished academic at DUT's Faculty of Management Sciences, holding a PhD in Management Sciences. His work spans governance, economics, and African development, with publications on IMF impacts and BRICS integrity. Co-author Douglas John Chikhowe Banda collaborates on political economy themes, while Joseph Mithi (PhD) complements the team from UNISA.
This multidisciplinary trio from South African higher education institutions underscores the role of universities in shaping continental policy discourse. Their SSRN paper, already garnering views, draws on extensive literature to argue reprivatization addresses SOE failures rooted in corruption, mismanagement, and fiscal burdens.
For aspiring researchers, exploring platforms like higher ed research jobs at DUT or UNISA offers entry into such impactful work.
Defining Reprivatization in African Context
Reprivatization, as defined in the paper, is the reversal of nationalization—transferring SOEs back to private ownership after post-independence state takeovers and 1990s privatization waves. Unlike initial privatization under IMF structural adjustments, today's trend responds to re-nationalized assets' underperformance.
In Africa, SOEs consume 2-5% of GDP annually in subsidies, per World Bank estimates, with losses exceeding R1 trillion continent-wide over decades. The process involves auctions, public-private partnerships (PPPs), or listings, aiming for efficiency gains seen in past sales like Zambia's copper mines (initially privatized, then partially reversed, now reconsidered).
Historical Waves of Ownership Shifts
Africa's SOE journey began post-colonial nationalization for sovereignty, peaking in the 1970s. The 1980s debt crisis triggered privatization: over 700 SOEs sold by 2000, per OECD data, yielding $20bn but mixed results—job losses, inequality rise.
- Kenya privatized 150+ SOEs without legislation.
- Nigeria telecoms boom post-NITEL sale.
- South Africa partially privatized Telkom, Vodacom spin-off.
Recent re-nationalizations (e.g., Tanzania's mines, Angola's Sonangol) failed, prompting reprivatization push. The paper notes 40% of African SOEs still loss-making, fueling the shift.
SOE Failures Driving the Trend
Chronic issues plague African SOEs: political interference, corruption (e.g., SA's state capture scandals costing R500bn), underinvestment. Eskom's R400bn debt and 200+ days load shedding yearly exemplify this; Transnet's rail collapse cut GDP growth by 3%.
Paper cites IMF data: African SOEs average -1.5% ROI vs private 5-10%. Examples include Ethiopia eyeing telecom reprivatization post-EEPCO struggles, Nigeria's power sector reforms.
Stakeholders like business chambers applaud, but unions fear job losses (SOEs employ 2m Africans).
South Africa's SOE Crisis Spotlight
In SA, SOEs epitomize malaise: Eskom bailouts R300bn since 2018, SAA bankrupt thrice. Recent moves—unbundling Eskom transmission for private bids (R200bn needed), Transnet logistics PPPs—signal reprivatization lite.
- Eskom: Private IPPs now 40% power; full unbundling eyed.
- Transnet: Ports concession to ICTSI (DP World rival).
- SAA: Takatso deal collapsed; private equity next?
Government's Operation Vulindlela accelerates PPPs, aligning with paper's thesis. For SA academics, this ties to funding woes—university subsidies strained by SOE rescues.
Explore higher ed career advice for navigating economic shifts.
Case Studies from Across Africa
The paper reviews successes: Rwanda's telecom reprivatization boosted GDP 2%; Ghana's Volta River Authority PPPs cut losses 50%. Failures like Zimbabwe's ZESA highlight risks without governance.
2025-26 trends: Kenya stalls 11 SOE sales amid court battles; Nigeria privatizes refineries; Angola Sonangol stake sales. Continent-wide, $1tn SOE assets under management, per Reuters, ripe for private infusion.
Read the full SSRN paper hereEconomic Implications and Benefits
Proponents argue reprivatization spurs FDI ($50bn potential), efficiency (20-30% cost cuts), innovation. Paper models 1-2% GDP uplift via better SOEs. In SA, Eskom private transmission could end load shedding by 2027, boosting manufacturing 15%.
Job creation net positive long-term: past privatisations created 2x roles via growth. Fiscal relief: SA saves R100bn/year on bailouts for infrastructure.
Social Challenges and Equity Concerns
Critics highlight inequality: 1990s privatisations widened gaps, BEE mandates aim mitigation in SA. Paper stresses inclusive models—employee shares, SMME linkages. Community impacts: Zambia mine sales displaced locals without benefits.
Solutions: Regulatory oversight, competition laws. Unions push PPPs over full sales.
Policy Recommendations from the Paper
Authors advocate phased reprivatization: audit SOEs, transparent tenders, retain strategic assets (e.g., SA ports). Build capacity via SA higher ed jobs training. Regional AfCFTA integration amplifies gains.
Multi-perspective: Governments (revenue), private (profits), academics (research).
Stakeholder Perspectives and Reactions
SA business (BUSA) welcomes; COSATU resists. Experts like FMF urge full privatization. Paper's timing coincides SONA unbundling announcements.
As DUT/UNISA researchers, authors position SA unis as thought leaders.
Photo by bennett tobias on Unsplash
Future Outlook for Reprivatization
By 2030, 50% African SOEs reprivatized? SA roadmap: Eskom IPO 2028? Risks: Geopolitics, debt. Opportunities: Green energy privates.
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