ABSTRACT
Ideas to help promote economic development in Africa tend to burst onto the continent with great brilliance and then quickly fade as the initial enthusiasm for the panacea is replaced by disillusionment in the harsh light of reality. The idea to engender great enthusiasm in Africa is privatization: there is an emerging consensus that African state-owned enterprises are extremely inefficient and tend to drain even more resources from the state than parastatals in other parts of the world. The performance of state-owned enterprises in Africa suffers because the political considerations of leaders often prevent public companies from raising prices. For example, the desire of government leaders in Zimbabwe to hold inflation to a minimum has kept many state enterprises from raising prices. Implicit assumptions about the goals of the state in Africa affect any analysis concerning the public enterprise sector and the prospects for divestiture of state-owned enterprises.
