Instead he discusses the effects of private security firms taking the place of police and military forces in countries or sections of countries where the government is unable or unwilling to provide protection. Sometimes the cops or soldiers are inept, sometimes they're the problem. Since the first purpose of government is to protect its people, when it consistently fails the people are entitled to do what they can to fill the gap.
An article he links to in African Business Magazine is worth reading--sometimes the firms are effective and sometimes, such as with those Shell hires in Nigeria, you wonder. The South Africans, citing national security issues, want to make all security firms at least 51% local ownership. (That won't help a bit--it will just change the potential threat from one of external intervention to one of civil war.) A number of shipping firms have given up on local navies and hired their own protection. And so on.
Fernandez didn't deal with this part, unfortunately. Even if you have one firm supplying forces to everybody, you'll get empire-building internally, and that will eventually turn external. In other words, over time, the West Nigeria unit of Blackwater will go native, and so will the Benin unit.
When you have multiple groups, sooner or later they will conflict.
The end stage would be the division of failed/incompetent states into new "nations" defined by their security team. Does that sound familiar?