State-owned enterprises in Africa and the economics of public service delivery

Abstract

The African continent is a paradox. Despite its vast natural and human resources, it ranks among the poorest economies in the global system. In terms of human development, African countries are lagging. Most African citizens live in poverty, with harsh economic realities (World Poverty Clock 2020). Most African countries are struggling to fight hunger, exacerbated by the excruciating pain of poverty. Thus, with traits of state fragility, these countries are vulnerable to implosion (Fragile State Index [FSI] 2019). A considerable proportion of the countries in Africa rank among the least developed countries (Kazeem 2017). The above are the consequences of poor service delivery, occasioned by mismanagement of the public sector resources. In the annual Corruption Perception Index of Transparency International (TI), a preponderance of African countries has records of high-level corruption (Corruption Perception Index 2019). The development of the post-colonial ‘third-world’ countries – and Africa in particular – or the lack thereof has historically been premised on two praxes: 1. The underdevelopment of the colonies was a direct outcome of the colonial powers’ economic and political power dominance and influence (Rodney 1972). 2. The post-colonial governance chaos that ensued as a result of, among others, greed, coup d’état, corruption, poorly performing economies and poor or lack of credible governance institutions (Fanon 1963; O’Kane 1993). As the era of democracy comes of age in Africa and the era of coup d’état slowly fades into the background, underdevelopment and poor economic performance seem to have taken on a new form and meaning, that is, in the form of embedded corruption in the state procurement machinery. This book focuses on the performance and activities of state-owned enterprises (SOEs) in relation to their service delivery responsibility. Despite its vast natural and human resources, Africa ranks among the poorest economies in the global system, with its attendant effect on human development. The above are the consequences of poor service delivery occasioned by mismanagement of the public sector resources. The rampant cases of corruption and mismanagement of public resources are associated with warped procurement systems in state institutions, especially the SOEs. State supply chain management (SCM), also commonly referred to as procurement, is a source of devastating corruption implications on the African governments. Poorly managed and corruption-led procurement systems have a major consequence on these fledgling economies, negatively affecting employment and economic growth. Poor service delivery by these SOEs has cumulative effects on society’s growth and the citizens’ well-being. This book focuses on the SOEs’ performance and activities in relation to their service delivery responsibility. Despite its vast natural and human resources, Africa ranks among the poor economies in the global system, with its attendant effect on human development. These are the consequences of poor service delivery occasioned by mismanagement of the public sector resources. This book provides a continuous assessment of the crisis in governance in Africa. As it is, there are huge deficits in the capacity of the African state to harness the vast human and material resources to promote good governance. This manifests in pervasive corruption, collapsed service delivery, collapsed state-owned enterprises, eroded social trust, capital flight, escalating levels of poverty and wars, human insecurity and stunted growth. The public sector is the pulse of service delivery because the entire governance system revolves around sourcing materials and services, mostly from the private sector, to achieve its public policy intents. Therefore, the procurement process ordinarily ought to yield positive economic outcomes and an efficiency-driven system in favour of the government itself and its service recipients. However, this is often not the case. Despite its enormous wealth, the African continent is in an economic quagmire, a dilemma that requires multifaceted research activities. This is the motivation for this volume. The authors of the chapters address the challenges associated with the performance of the SOEs from different perspectives and contexts that indicate the various unethical practices prevailing across the respective countries. While corruption in the activities of the SOEs and other public sector institutions across the continent is a common phenomenon, the forms and intensities differ. This provides deeper insights into the factors that engender the failure of government in public service delivery. This book, therefore, seeks to present multiple viewpoints on the intensity and consequences of failed public sector institutions in African states. It lays bare the incidents of the failure of state institutions for all to see, understand, learn from and avoid the pitfalls that have incapacitated states in Africa