Most African countries are under increasing pressure from Western governments and international financial institutions led by the World Bank and the International Monetary Fund to liberalize their economies and privatize public sector enterprises. But despite such external pressure to privatize public sector enterprises, most African countries face enormous economic and political constraints that would either slow down the pace of privatization or make it difficult to implement. It is primarily because of Africa’s intractable economic and political problems that I suggest in this paper alternative approaches to full privatization. Alternative strategies discussed include: contracting out public sector activities; use of contract management; Introduction of cost-sharing programs; and, putting emphasis on competition at the enterprise level. Though intended to reduce the economic and political consequences of privatization, the alternative approaches would also improve the overall performance of public enterprises in Africa.
