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AEC2018: Africa’s private sector can be major driver for regional integration

AEC2018: Africa’s private sector can be major driver for regional integration
Photo credit: UNECA | AfDB

06 Dec 2018

Africa’s growing and vibrant private sector can be a major driver of the regional integration across the continent, according to leading experts at the ongoing 2018 African Economic Conference (AEC) in Kigali, Rwanda.

However, this will require more efforts by the public sector to improve the environment for doing business in Africa, including making additional investments in both soft and hard infrastructure to reduce the cost of doing business, Non-Tariff Barriers (NTBs) as well as harmonising policies and standards.

In addition, governments have to do more to facilitate building viable value chains for agriculture, commodities and services.

“Governments have to play a catalytic role to attract private investment,” said Ms. Claire Akamanzi, the Chief Executive Officer of Rwanda Development Board during a high level panel under the theme, Leverage private sector for Africa’s integration.

Ms. Akamanzi pointed out that the government of Rwanda has made deliberate efforts to support the private sector by implementing several reforms aimed at not only to easing doing business in the country but also to making its economy competitive.

Rwanda is ranked the 2nd easiest place to do business in sub- Saharan Africa after Mauritius, the 1st in the East African region and the 41st globally out of the 190 economies assessed in this year’s World Bank Doing Business report.

Public private partnerships, Ms. Akamanzi argued, remain a priority in promoting a private sector led economy in order to achieve all the set targets that will maintain Rwanda’s competitive position globally.

Professor John Struthers, Director, Centre for African Research on Enterprise and Economic Development, School of Business and Enterprise, University of West of Scotland, underscored the need to develop regional value chains to facilitate greater integration into global value chains.

This is because most African countries are highly under-represented in global value chains (GVCs) although their participation has significantly increased over the course of the last decade.

“I see the glass half-full,” Prof Struthers said, pointing out that Africa despite the existing challenges, progress is being made, citing the ongoing construction of 6,000km Trans-African highway project linking Kenya (Mombasa) and Nigeria (Lagos) by road and the recently launched Djibouti Highway to Ethiopia.

For his part, Mr. Stephen Karingi, Director Regional Integration and Trade Division at the Economic Commission for Africa (ECA), emphasised the need to invest in information and technology to drive regional and continental integration.

While Africa is already tapping into the possibilities created by digitalization and the mobile revolution. At the same time, it is also the region that lags most behind in terms of the ability to engage in and benefit from e-commerce and the digital economy.

“Half of Africa's population won't enjoy benefits of the AfCFTA because they have no IDs. We can harness the power of the private sector in the AfCFTA through digital identification,” Mr. Karingi said.

For instance, three quarters of the African population are yet to start using the Internet. And in the UNCTAD B2C E-commerce Index 2017, the regional average index value for Africa was 28 compared with the world average of 54.

In his remarks, Ambassador Nkopane Monyane, Principal Secretary of the Ministry of Police and Public Safety of Lesotho and former Ambassador of Lesotho to the WTO, emphasised the need to invest and improve the quality of products produced on the African continent.

“Excellence should be the basis of everything that we do,” he said, pointing out that Africa was a resource rich continent.

Mr. Papa Secka, Director General, The Gambia Standards Bureau, underscored the need to step up investments infrastructure to enhance the quality of products produced on the continent as well as harmonising standards to reduce non-tariff barriers to facilitate the private sector.

“There is a need to address non-tariff barriers to the extent that companies can be efficient and competitive. Countries have to build regulations based on standards,” he said, emphasising that harmonisation of standards at continental level was crucial to facilitate regional trade.

The annual African Economic Conference is the continent’s leading forum fostering dialogue and knowledge exchange in the search for solutions to the development challenges of Africa. It brings together leading academics, high ranking government representatives and development practitioners from across the globe.

Sessions over the three-day meeting are examining the social, cultural and political frameworks for successful integration, building on the landmark signing this year of the Africa Free Trade Agreement, the world’s potentially biggest free trade agreement, which aims to create a single continental market for goods and services, with free movement of business persons and investments across Africa.

Participants are also looking at the role of the private sector and civil society institutions.

The 2018 African Economic Conference is being held under the theme, Regional and continental integration for Africa’s development.