Despite no effort to address systemic governance flaws, many Cabinet members and President Cyril Ramaphosa have cited private-sector assistance as the primary, ostensibly innovative driver of rescuing South Africa's economy through infrastructure as a catalyst. The "P" word for privatisation has gained illuminating popularity in Cape Town in recent weeks.

To make a case for "Privatisation Solution is the Problem," the few countries from Western Europe, Asia, and Latin America that zealously pursued privatisation were evaluated.

Exaggerated claims were made that privatisation would reduce government fiscal problems while encouraging private entrepreneurship, innovation, and investment, resulting in more efficient, productive, and competitive economies.

Privatisation advocates, led by Margaret Thatcher and Washington-based international financial institutions in the 1980s, pushed for more private property. This occurred during an economic crisis that affected African countries in the 1970s and 1980s. Allow me to digress to the Structural Adjustment Program (SAP)...

In response to this crisis, African countries implemented SAPs. These neoliberal-inspired programs, launched by the World Bank and the International Monetary Fund (IMF), involved massive reductions in the state's role, with a corresponding emphasis on private sector actors in development. The GNU of South Africa appears to follow this blueprint in all its attributes and dispositions.

In its prototype, the SAPs urged African governments to pursue liberal economic policies such as foreign trade liberalization, currency depreciation, social spending cuts, elimination of food and agricultural subsidies, tight monetary controls, public employment reductions, and the privatisation of State-owned enterprises.

Disillusionment with the efficiency of government institutions was thus at the heart of structural adjustment. The implementation of SAPs emphasised the size and inefficiency of the public sector as the primary cause of Africa's lack of economic growth. SAPs provided "conditional lending" to help African development, in which governments receiving debt relief were required to adjust their monetary policies. In general, 'adjustment' denotes liberalisation and privatisation. However, the literature generally agrees that SAPs were ineffective: Africa remains "relatively poor"; its economic crisis is "acute, all-encompassing, and worsening". SAP critics claim insufficient attention was paid to the social dimension of development, and the institutional weaknesses of developing countries. This situation is likely to be attributed to SA's GNU approach to privatisation, which is marketed as reform.

In addition, the real problems of State-owned enterprises were frequently exaggerated and misrepresented in the few countries studied. Many people benefited from the early stages of privatisation to reduce public opposition and ensure public acceptance.

Many people believed privatisation would increase competition and eliminate corruption. In practice, the opposite was achieved, with beneficiaries engaging in novel forms of embezzlement to maximise their profits. As the failures and abuses of privatisation became clear, public-private partnerships were promoted, ostensibly to mobilise private funds for public use. Far too often, these collaborations socialised costs and losses while increasing private financial gains.

The GNU, through its phony reform process, will privatize the economy's key instruments: logistics and energy. Indeed, these monopolies contributed significantly to outrageous melancholic debt. However, should the debt incurred by these assets be managed through good governance, the nascent entrepreneurial firms from various industrial specialties - steel, cable manufacturing, electrical motors, and other components - may already be part of global value chains, contributing significantly to job creation.

The REFORM process omits or does not discern several crucial questions, which include: What role does privatisation play in financing public debts and deficits? What are the political and distributional implications of privatisation? Clearly, such questions cannot be answered in a general sense: what works for a developed, market-based economy in Western Europe may not work for a developing country with an underdeveloped domestic capital market or severe debt problems, let alone an economy emerging from decades of corrupt government.

The criticism that privatisation policies in some countries contribute to regressive redistribution effects holds water, and the situation can get more complex in an unequal country like South Africa. In a country with a commercialised democracy, privatisation is a recipe for regulatory capture, which generates large rents for new private owners while causing welfare losses for consumers.

Consequently, it would be disproportionately harmful to the poorest segments of the population, already heavily impacted by neoliberal macroeconomic policies that generate regressive redistributive effects.

In the larger context of development, as in South Africa, focusing on restructuring large State-owned enterprises intended to be instruments of economic growth and social welfare through privatisation and complementary policies may prove misguided.

Statist development policies have focused on the establishment of large State-owned enterprises in the hope that this will help developing economies close the gap with developed economies. Liberalisation policies based on the Washington Consensus have also targeted these large SOEs, hoping that transferring ownership to the private sector will spur accelerated economic growth. However, specific countries' privatisation policies may have had only a secondary impact on growth.

Countries that have experienced impressive growth in recent years, such as China, India, and Vietnam, have not implemented an impressive privatisation policy. They unleashed the productive energies of millions of emerging entrepreneurs and industrialists, resulting in a thriving market for small and medium-sized businesses. One would hope that South Africa’s banking and development finance institutions will pay as much attention to the development of emerging industrialists through public procurement of state-owned enterprises (SOEs) as drivers of economic growth and social welfare.

Private sector participation is encouraged when the governance of both the public and private sectors is emphasised through comprehensive monitoring and judicious regulation.

In a country devoid of nationhood and marked by unacceptable levels of inequality, entrusting assets intended for the common good to private sectional interest groups is absurd.

The privatisation praises can be attenuated to an old Shakespearean cliché... "the devil can cite Scripture."

With privatised SOEs local content is a pipe dream and genuine industrialisation is fanatically crackpot thinking in South Africa.

Written by Bongani Mankewu, Director of the Infrastructure Finance Advisory Institute