African Business Roundtable Forum: What can African governments do to elevate the continent’s private sector?
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The African Business Rountable (ABR), set up by the African Development Bank Group in 1990, is Africa’s foremost and continent-wide association of businesses and business leaders, and is the representative of the African Business Society to the United Nations. An independent, non-partisan, non-profit private sector funded organization, its membership is made up of industry leaders, CEOs and Founders spanning various industries from all over the world.
Africa Business Communities spoke to some of ABR's members on the issue of Africa's private sector.
What African leaders can do, individually and jointly, to enhance the continent's private sector and promote regional industrialization?
Goodie M. Ibru, Founder, Ikeja Hotel, Nigeria: African governments need to do more to elevate the continent’s private sector. The main challenge is to put in place a conducive environment for private enterprise to thrive.
When the rule of law is firmly in place, the interest of investors in the system will be strengthened. Nobody wants to invest in an economy where policy consistency is absent. Also African Governments must invest in infrastructure – both physical and human infrastructure. Financial inclusion is another area where African governments should intensify efforts.
Collectively, the promotion of the freedom of people, goods, services and capital among the 54 countries will overcome the challenge of smallness of size, isolated markets and artificial barriers which a lot of countries have continued to contend with. That will promote intra-African trade, unlock resources and opportunities for many countries, especially those that depend on imports and exports.
Dr. Mohamed El Sahili, CEO, Medland Hospital, Zambia: With positive developments such as the recovery of the manufacturing sector with regards to increased international demand and increase in copper pricing, the government may look into lowering the unit cost of production and transactions that can help strengthen and develop new supply and value chains. The world is more digitized than ever, thus policies that foster access to ICT products and services will promote local innovations and research for economic growth. A review and update of the laws on data localization, protection and intellectual is a current issue that may require immediate attention seeing the increase in the cases of cyber security breach in Zambia.
Dr. Thomas W. Laryea, Legal Counsel, Orrick, USA: This is a difficult economic time for many African governments. The loss of revenue experienced during the height of the Covid pandemic, high inflation, including in food prices, and rising cost of borrowing indicate a very challenging economic outlook. While many countries in Africa will need to rely on some additional financing from multilateral financing institutions, such as the IMF, Word Bank, African Development Bank, in order to overcome the medium-term financial constraints, it is important that African countries are not lulled into a dependency on such sources of financing. They need to maintain or regain access to sources of private financing as soon as possible, which in addition to supplementing the sources of financing to the governments, will provide additional sources of financing to credit worthy domestic corporations whose growth would be critical to the job creation and economic empowerment that our continent needs.
Mahad Ahmed, Founder, AME Trade, United Kingdom: I think to be fair a lot has been done at national and regional levels. Of course there is always room for improvement; perhaps one recommendation or suggestion I can make is for regional economic communities such as ECOWAS/SADC to play a more active role in integrating organizations like the African Business Roundtable into their strategic plans to facilitate and assist with various capacity building requirements.
Dr. Mima Nedelcovych, Chairman, AfricaGlobal Schaffer: Simply put, they can do what governments in developed countries do, and that is support the growth of their own private sectors by contributing parallel public investments and pro-business policies to stimulate and encourage the growth of their private sectors.
They should also revisit their policy strategy. Government policies must be geared toward supporting value addition to raw materials and not export of raw materials without value addition, and for that the key is assuring the physical infrastructure required, primarily power, roads and logistics AND policies that encourage import substitution. Developed economies' private sectors did not become what they are today without the direct support and help of their governments!
N. Justin Chinyanta, Chairman and CEO, Loita Group, South Africa: What our governments can do is to get out of the way and reduce 'crowding out' effect of borrowing from the private sector through perennial issuing of treasury bills and bonds to finance deficits.
About the African Business Roundtable
The African Development Bank Group set up the African Business Roundtable in 1990. Today the ABR is Africa’s foremost and continent-wide association of businesses and business leaders, and is the representative of the African Business Society to the United Nations. An independent, non-partisan, non-profit private sector funded organization, The African Business Roundtable is an NGO in Special Consultative Status with the Economic and Social Council of the United Nations (ECOSOC) and is the only organization representing the African Private Sector within ECOSOC.
Read interviews with members of the African Business Roundtable organization:
[Interview] Dr. Mohamed El Sahili, CEO, Medland Hospital, Zambia
[Interview] Goodie M. Ibru, Founder, Ikeja Hotel, Nigeria
[Interview] N. Justin Chinyanta, Chairman and CEO, Loita Group
[Interview] Dr. Mima Nedelcovych, Chairman, AfricaGlobal Schaffer
[Interview] Dr. Thomas W. Laryea, Legal Counsel, Orrick, USA
[Interview] Mahad Ahmed, Founder, AME Trade, United Kingdom