3.1 Reasons Behind State Intervention in Africa
Even though the terms “state” and the “public sector” have been used synonymously because there can be no strong state without an efficient public sector (African Development Bank, 2005), for purposes of analysis and to contextualize reform of the African public sector and understand its pro-cesses, dynamics and intricacies, it is pertinent for us to examine the state and state capacity building in Africa. This section is therefore devoted to the post-colonial state in Africa and efforts made to build its capacity.
Several studies have identified three main reasons for state intervention in the economy in Africa.
They are as follows: (i) statist conceptions of development; (ii) economic nationalism; (iii) political patronage (Tangri, 1999).
3.1.1 Statist Conceptions of Development
The post-independence period in the 1960s in Africa witnessed an enormous expansion of govern-ment intervention in national economies when the public sector was seen as a major contributor to economic growth and socio-political stability. This statism or state capitalism, that is, ownership and intervention by the state was accepted as the dominant development strategy and paradigm. That the state had a central role to play in directing the development process was especially acknowledged in the African context in the midst of a weakly developed indigenous private sector as well as sub-stantial foreign economic presence. Thus justifying state intervention in the economy was not only an ideological necessity but also a historical one. Consequently, a variety of forms of state economic intervention inherited from the colonial period were expanded and generalized in the years after in-dependence, leading, in particular, to the marked expansion of SOEs undertaking important shares of production and investment in African countries (Tangri, 1999; Young, 1991; Bennell, 1997).
3.1.2 Economic Nationalism/Africanization of the Economy
After independence there were strong feelings in African countries of “economic nationalism”, which stemmed from the weakness and subordinate status of African private enterprise as well as from the fact that African economies were largely in the hands of foreigners. Public sector enterprise was seen as enabling the state to carry out activities that African private entrepreneurs could not perform and also to reduce the dominance of foreign enterprise. Throughout the continent, political leaders sought
to secure greater indigenous ownership of the economy, especially of the activities a country de-pended on for its foreign exchange earnings. Greater ownership and control of the economy through what was called “capturing the commanding heights of the economy” to influence the broad direc-tion of nadirec-tional development through nadirec-tionalizadirec-tion of foreign economic concerns were carried out in Zambia, Tanzania, Nigeria, Ghana, Zimbabwe. In addition, new SOEs were created in Swaziland and Kenya to accelerate the policy of Africanization of the economy. In some socialist countries like Tanzania, Ethiopia and Mozambique, the policy of extensive proliferation of SOEs was pursued as way of fulfilling the ideological ambitions of the governments (Adamolekun, 1999).
3.1.3 Political Patronage
State intervention was seen as maintaining the leaders in power. Because of the intense pressures exerted on African leaders for providing employment and the redistribution of public resources, the public enterprise sector offered the leaders the resources and opportunities to meet some of the de-mands. As a result, state owned enterprises (SOEs) were to be physically impressive, spread all over the country, should create new jobs, and should benefit the consumer via lower prices. And just as it was necessary to impress the electorate, it was also necessary to reward party activists; hence the en-terprises were used as sources of political patronage. This point has been reinforced by Van de Walle (1994: 155-156) who argued that in Cameroon, SOEs “proved to be an ideal instrument to distribute state resources in the form of jobs, rents, power and prestige which enabled President Ahmadou Ahidjo to reward allies and co-opt opponents and thus secure his power base”. In short, SOEs were beneficial to state office holders in terms of consolidating their power and maintaining their political incumbency (Tangri, 1999).
Furthermore, the creation of SOEs stemmed from the fact that they (SOEs) were visible and highly os-tentatious evidence of the governments’ efforts to develop the economy of the country. SOEs erected impressive facades, and though there was not much behind the façade in real terms, the political impact was considerable (Adamolekun 1999).
3.2 Three Thematic Areas of the Post-Colonial State
It is instructive to note that the post-colonial state in Africa has attracted interest in three thematic ar-eas, namely, (i) state consolidation; (ii) state decline; and (iii) state capacity building. State consolida-tion, which came into vogue in the immediate post-independence era, emanated from the underlying assumption that the state was a major means to bring about societal change and fulfilling economic and social aspirations with strong integrative and development objectives (Herbst, 2000). The shift to
was seen to be erected on rather doubtful foundations of legitimacy. The state was variously charac-terized as “prismatic” (Riggs 1964), “soft” (Myrdal 1968), “weak” (Jackson and Rosberg, 1982), “over-developed” (Leys 1975), “precapitalist affectation” (Hyden 1983) and “anti-development” (Dwivedi and Nef 1982) because of its inability to meet the aspirations not only of civil society but also those who occupied central political institutions (Azarya, 1988). This characterization was not only a major cause of economic decline experienced by most African countries during the 1970s and 1980s but a weakening of governmental capacity and effectiveness, which in turn hindered efforts at economic revival via structural adjustment (Jeffries, 1993).
3.3 Building State Capacity
State intervention in the economy African countries has largely been seen as counterproductive and detrimental to economic growth and progress. Patronage, neopatrimonialism, corruption, nepotism, inappropriate policy design, poor policy implementation and transactional rather than transforma-tional leadership, all not in the interest of pursuing the public interest but rather sectransforma-tional and partisan interests, poor service provision and delivery, characterized the period of state intervention. With the economic crises which faced most African states in the 1970s and 1980s coupled with the lessons of market forces in developed countries, there was the need to redefine the role of the state through the building of its capacity.
Four features underpinned state capacity building. They are: (a) a reduction of the role of the state in national economic management; (b) an enhanced role for sub-national governments; (c) public-private partnership in respect to the production and provision of goods and services; and (d) efforts such as designing corporate plans and signing of performance contracts aimed at achieving improved performance in public management (Adamolekun, 1999).
Given the incapacity of the state to implement structural adjustment programmes (SAPs), the World Bank and other donors in the 1980s moved towards a concern with improving state capacity through
“rolling back the state”, that is, the restriction of the role of the state while providing greater opportu-nity for market forces to assert themselves on the development process and liberalizing the economy which it is hoped will induce economic development. The concern also involves building adminis-trative capacity as an instrumentality of the development process rather than of a spoils system and the development of more efficient and, in sense, more autonomous state machines. Various panaceas were suggested, including administrative reform covering areas such as organizational development, manpower development, training, and the introduction of management techniques along the lines of the New Public Management School (Schaffer, 1969; Levy, 2004; Haque, 2001).