Between Financial Support and Performance: What Are Subsidies to Public Companies in Sub-Saharan African Countries Worth?

The purpose of this study is to analyse the effects of financial subsidies on the productivity of public enterprises in Sub-Saharan Africa. Based on theories of public enterprise management and stylised facts, we formulate the hypothesis that financial subsidies improve the productivity of public enterprises in Sub-Saharan Africa. To test this hypothesis, the work uses secondary data and estimation techniques such as the generalized method of moments. It finds that financial subsidies have positive and significant effects on the productivity of public enterprises in SSA, thus confirming the initial hypothesis. In view of these results, governments must regularly monitor the outcomes, encouraging a dynamic allocation of resources to the best-performing sectors and companies. These subsidies should be strategically directed towards emerging industries and small and medium-sized enterprises, in order to boost the local economy and create sustainable jobs.