Privatisation and FDI in Nigeria and South Africa

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Privatisation and FDI in Nigeria and South Africa By Jane Obiora South Africa and Nigeria present two very good examples of countries facing developmental problems that typify the vagaries of the global political and economic environment. Since globalisation is the contending ideology and the operative environment for engaging in relations amongst groups and states, both countries have had little option but to align their domestic and foreign policies towards achieving national objectives within this environment. A very important aspect of the globalisation ideology is the privatisation of State-Owned Enterprises (SOEs). This is not only as a means of attracting Foreign Direct Investment (FDI), but also for making such enterprises more efficient and viable. However, the plot so far has not been too sanguine as those countries seeking to privatise profitably have had to face opposition from their own citizens, as well as obstacles from both financial institutions and would-be foreign investors. South Africa’s recent anti-privatisation strike is a case in point. Privatisation in economic terms is basically a tool for economic management. It became a widely acceptable policy instrument in the 1970s when Chile became the first country to turn public assets and businesses into private operators. Since then over 140 countries, both developed and developing, have embraced privatisation, although their approaches and strategies have differed significantly. The ability of countries to attract foreign investors also varied widely depending on the importance and marketability of both the enterprises to be privatised, and the countries involved. The experiences of South Africa and Nigeria thus far clearly indicate that the issue of privatisation is a very emotive, sensitive and difficult task to undertake. Despite a remarkable degree of convergence in their foreign
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