PPPs: Africa’s reliable driving force for Industrialisation

06May 2021
The Guardian Reporter
Dar es Salaam
The Guardian
PPPs: Africa’s reliable driving force for Industrialisation

Regardless of the challenges surrounding the private sector ecosystem, its contribution as an engine to Africa’s industrialisation process and economic development at large remains relevant.

Even though, we can also not ignore the voices of those who posit that capitalist is at the core ofan unequal society driven by private sector accumulation but there is room for improvement.

Private sector active participation in key economic areas such as agriculture, industries, andservices provision contribute immensely to the total GDP growth of Africa’s economy whileaccording to AfDB provides about 90 percent of employment opportunities including formal andinformal jobs.

The substantive participation of the private sector in driving Africa’s development and wealth,calls for a stronger Public-Private Partnerships (PPPs) approach between the governments andprivate firms.

Considering the significant challenges of unemployment especially amongst theyouth, that afflicts Africa, given her young population, the private sector can be part of thesolution. 

The private sector can be a key contributor in the establishment of more industries thatcan contribute significantly to the reduction of youth unemployment.

PPPs will facilitate the inclusion of the private sector in the policy process and propel the growth of the economy of the continent that will lead to more jobs for the unemployed majority youth who, according to the United Nations account for 60 percent of Africa’s jobless.

Most importantly, PPPs will advance the industrialisation agenda which is crucial for Africa’s realisation of both Agenda 2030 and 2063 respectively.

According to the AfDB’s African Economic Outlook 2018, the annual infrastructure deficit inAfrica is currently estimated at $108 billion, a year and will increase to $170 billion a year by2025.

With committed leadership, political will, and the private sector actively involved ininfrastructure development, this gap can be closed. 

It is necessary to have the requisite infrastructure like roads, ports, and energy that are necessary for Africa’s industrialisation drive.

PPPs are seen as a key solution to address this gap by crowding in private sector investment ininfrastructure. Notably, the more well-developed infrastructures are in Africa, the moreefficiently the industries will operate across the value chain.

For Africa’s industries to reap from the operationalisation of the  African Continental Free TradeArea (AfCFTA) that has been operational from January 2021, the public and private sectors haveto work together. As noted by UNECA, AfCFTA will cover a GDP of USD 2.5 trillion of themarket.

However, if the African governments do not work hand in hand with the private sector inbuilding industries that will take advantage of intra-African trade and further encourage theproduction of more industrial products, the mega-market opportunity presented by AfCFTA willbe in vain.

Therefore, as we are keen to enjoy the fruits of AfCFTA, its role in the future of industrialisedAfrica will depend on how the public sector engages and embrace its private sector as a partnerand not a competitor in promoting development.

The involvement of governments in particular relationships must be redefined for PPPs to come full circle. The predicted evolution would prevent African governments from acting as both managers and financial sponsors, a move that should benefit the public at large.

Finally, ensuring the good functioning of Africa’s Chambers of Commerce which has the powerto establish conductive channels in which the interest of the private sector is kept and addressedwill play a vital role in accelerating PPPs.

The private sector engagement will help to expand  Africa’s service economy to meet our industrialisation agenda needs.

Source:AUDA-NEPAD

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