Since the beginning of the process in 1990, the number of privatisations through public flotation has been only 4 per cent of total transactions. Moreover, the trend is downward, confirming the difficulty in African countries of building stock exchanges and capital markets, still often used by governments to raise loan finance rather than capital for industry.
Some countries have attempted to give priority to local investors. In Ghana, for instance, where restrictions on nonresident portfolio investors apply, and in South Africa with special offers for historically disadvantaged individuals.
However, the participation of the local private sector is also constrained by poor management and the lack of access to cheap financing. Only Mauritius has attempted to create small and medium-sized entities in the power sector. There, close to 25 per cent of annual electricity generation comes from local privately owned and operated cogeneration plants in the sugar industry.
by Lucia Wegner Privatisation: A Challenge for Sub-Saharan Africa This Policy Insights is derived from the special theme section of the 2003 African Economic Outlook and on a 2004 OECD Development Centre Study
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