The role of the private sector in Africa
Let’s be honest, Africa’s economy as a whole is seriously blossoming and there are no signs of this slowing down. However, in order to achieve maximum growth and development throughout Africa, certain challenges not only need be identified, but they also need to “fixed” through real action.
Intra-continental trade has the possibility to boost and enhance economic development in Africa. The trend at the moment in Africa does not reflect this, in fact the exact opposite is occurring; the share of African nations’ total trade accounted for by commerce with each other halved from 22.4% in 1997 to 11.3 % in 2011. Even though the value of Africa’s intra-regional trade has reached $130.1 billion, up from $60 billion in the 1990’s, it is still small on a global scale.
The solution offered by many professionals is to boost the private sector. By focusing less on the elimination-of-trade-barriers-policy many African governments have been chasing, and more on increasing the productive capacities necessary for trade. “It is the private sector that understands the limitations exposed to enterprises and is in a position to take advantage of the opportunities created by regional trade initiatives.
Infrastructure is key. Africa is not the strongest when it comes to physical and social infrastructure. African countries would do themselves good in taking some of the regional development techniques used in Asia that are based on large investment in infrastructure allied to a broad industrial policy – as many African governments are well aware. Africa’s private sector needs that in order to increase the variety and sophistication of the goods that they can produce, distribute and market. Empowering that could largely influence reducing the continent’s high production costs and, consequently, make national economies more competitive.