African Capitalist States

P. Kalonga Stambuli wrote in 1997 about challenges that still ring true today:

“African Capitalist States” are facing large difficulties associated with downsizing of government. The end of subsidization of enterprises means that disguised unemployment is manifesting itself into widespread joblessness. The government is continually challenged as political activists and interest groups fiercely oppose many of these measures. The alternative of reversing these measures means that budget deficits re-emerge and government remains in the vicious circle of stabilizing the economy in the face of declining foreign aid resources...
The conditions observed in Africa's past are consistent with “state hegemony” a subtle form of economic tyranny that enables the state to present its own interests as universal while marginalizing those sectors of society that offer competition. Africa's state hegemony was legitimized by subsidies, artificially low product prices, low interest rates, and over-valued exchange rates, but at the cost of large budget deficits, high level of seignorage, high inflation, rapid accumulation of domestic and external debt, weak factor markets, crowding out of credit and macro instabilities that undermine private enterprise.