Abstract:
State Owned Enterprises (SOEs) have for many decades delivered essential goods and
services in both developed and developing economies. However, in recent times, a majority of
SOEs have become a drain on national budgets in many developing countries, partly as a result
of poor investments and various structural problems. While the Washington Consensus thought
that privatization was going to provide the needed solution through fiscal benefits, the results
have largely proved elusive in developing countries. This paper assesses the extent to which
fiscal benefits could determine the survival or privatization of SOEs in sub-Saharan Africa. It
also examines the nonconventional factors that mitigate against privatization of failing SOEs in
these countries. The World Bank’s World Development Indicators for 2018 were the main
source of data for the study. A Binary Logistic Regression Model was estimated for the survival
of SOEs in a representative sub-Saharan Africa country with substantial experience in
development partner induced privatization. The results show that fiscal benefits do not
significantly influence SOEs surviving privatization efforts. Real lending rate, inflation rate, and a
combined effect of mismanagement, corruption, political and external influence significantly
influence SOE survival. Economies of sub-Saharan Africa will have to refrain from privatizing
SOEs for short term fiscal benefits and rather concentrate on significantly reducing
