The sell-off of Government-owned companies – disinvestment or privatisation – has generated enough heat the world over.

India has had its fair share of controversies ever since it adopted this policy in the early 1990s. In fact, some argue that the defeat of the NDA Government in the 2004 elections was largely due to its aggressive pursuit of disinvestment. Though this may seem a rather simplistic reading of the election result, the UPA Government took this charge seriously enough to dismantle the Disinvestment Ministry as soon as it came to power and slowed down the process, at least in its first term.

But it soon got embroiled in the 2G scam and the coalgate issues which showed the dangers of Government resources being sold or leased out to private entities at prices far below the market rates -- hitting Government of much needed revenues and hugely favouring private companies.

The sell-off of state-owned assets, especially in the oil and gas sector, at rock- bottom prices in Russia in the 1990s during the Yeltsin era is well documented. The Russian experience in privatisation created that curious class of Oligarchs -- the Berezovskys, the Abramoviches and the Khodorkovskys -- who became billionaires overnight at the expense of the common Russian citizen.

Now it seems to be the turn of Africa. Kofi Annan, former UN Secretary General, has come down hard on African Governments for undervaluing State assets in the recent Africa Progress Report.

Africa is often seen as the next growth area and a lot of optimism has been generated in the recent past over its growth potential. Some Sub-Saharan African countries have posted impressive growth rates -- Angola and Equitorial Guinea (both resource-rich nations) are among the prominent performers. But the benefits of this growth are highly uneven often leaving out the common man as is evident by the poor human development indices.

Annan, Chair of the Africa Progress Panel, states in the report that, “Disparities in basic life-chances – for health, education and participation in society – are preventing millions of Africans from realising their potential, holding back social and economic progress in the process.”

Annan's panel report is highly critical of the lack of transparency in mining deals that African nations enter into with western companies. The report states that international tax avoidance and evasion, corruption, and weak governance represent major challenges.

The report is highly critical of certain western companies which use unethical tax avoidance, transfer pricing and opaque ownership patterns to siphon off billions, depriving the Africans of the benefits of their resources.

The report gives the interesting example of the Democratic Republic of Congo. Between 2010 and 2012 it lost $1.3 billion in revenues due to undervaluation of resources and State assets. And this is in country which has one of the worst child mortality rates in the world and has seven million pupils out of school.

Annan makes an earnest plea to the African Governments to improve governance and increase transparency in their natural resources policies. To make the natural extractive industries a part of the broader development agenda is also one of the important suggestions of the report. This will ensure the people getting a fair share of the revenues generated from natural resource extraction.

It’s easy to criticise African Governments of corruption but there was at least one analyst, who appeared on BBC recently, who was willing to put the blame largely on western companies for this sorry situation.

The call for inclusive growth is being made in another part of the world, but are the African Governments listening?

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