Africa needs to strengthen intra-African cooperation and trade to move away from supplying raw materials to the rest of the world, Rwandan President has said.
However, this will require stepping up efforts to address the Continent’s current huge infrastructure gap ranging from insufficient energy, poor transport networks to inadequate internet connectivity.
It also necessitates government commitment to creating a favorable environment for businesses to grow to be able to generate jobs, economic growth and reduce poverty.
“There is no reason why we should be the world’s suppliers of cheap commodities and yet remain a vast market dependent on the outside world for most of our consumption goods,” President Paul Kagame told delegates recently attending the high level two day international conference on private sector development in Africa organized by the Parliamentary Network on the World Bank, International Monetary Fund (IMF) and African Development Bank (AfDB).
He added: “We should rapidly address our infrastructure shortcomings …as long as these challenges remain; we will not be competitive,”
According to the African Development Bank, addressing Africa’s infrastructure gap needs an annual investment of approximately $93 billion a year, with about one third required for maintenance. In addition, the existing infrastructure gap depresses private sector productivity by about 40 per cent.
Besides infrastructure, accelerating and sustaining growth requires improving Africa’s investment climate, spurring innovation, and building institutional capacity to govern well, Mr Kagame said.
He argued that for many African countries to achieve and sustain economic development aspirations, this will largely depend on their ability to mobilize both domestic and external private sector investments.
“It is through the private sector’s role in fostering increased savings and capital formation, technology transfer and better products and services for consumers that sustained economic gains are achieved,” Mr Kagame said.
The annual international is focused on taking stock of the private sector environment in Africa and examining steps Africa’s nations, parliamentarians in particular can take to promote sustainable private sector development that facilitates inclusive growth.
“Legislators have an important role to play in the economic decision process …this role extends from determining levels and composition of public spending, to the approval of laws that regulate economic activity more broadly , such as legislation on trade, taxes and regulation for the financial sector. All these have a direct impact on the business environment,” said Roger Nord, the Deputy Director, and African Department of the IMF.
He also underscored that ensuring transparency and accountability are crucial ingredient of good economic and political governance.
However, according to Obiageli Ezekwesili, the Vice President, Africa Region for World Bank, while Africa has achieved tremendous economic progress over the last decade, it is yet to translate into inclusive and broad based growth.
“Many challenges remain…more growth is needed to drive more out of poverty and there are pockets of instability….” she said, underscoring the need for sustained economic policy reform.
It is the second time the conference is taking place in Africa, after being held in Cape Town, South Africa in 2007.
The Kigali conference is expected to come up with a ‘Resolution for Action’ for participants to take back to their home countries for parliamentary discussion and implementation.