2013-2017_-_Private_Sector_Development_Strategy

02
The AfDB Private Sector Development Strategy
(2013-2017)
Certain conditions must be in place for the private sector
to thrive, encourage inclusive growth, and cut poverty by
creating jobs. These conditions include rule of law; good
‘hard’ and ‘soft’ infrastructure; a stable macroeconomic
environment; an educated, skilled and healthy workforce;
and access to financial services. Africa’s private sector
also needs deeper financial markets, more access to
higher education and training, and more gender equality
if it is to be globally competitive, and for this to result
in significantly more intra-African and external trade.
2.1 Vision and Objectives
The private sector now generates 70 percent of
Africa’s output, 70 percent of its investment and 90
percent of its employment. That sector, though, is
still largely composed of mostly informal micro and
small enterprises, with limited capacity to contribute to
accelerated development. 7 Large differences among
African countries persist – much of formal employment
comes from government jobs. Africa’s private sector
also has to contend with limited public sector capacity
to regulate it effectively, a generally restrictive business
environment, poor infrastructure (particularly in power
and transport), serious skills shortages and mismatches,
and difficulties in gaining access to finance. While the
extractive industries sector has been an important driver
of economic growth, such growth has not resulted in
equally impressive job creation and poverty reduction.
This highlights the urgent need for RMCs to transform
and diversify the structure of their economies in order
for such growth to be sustainable and inclusive.
This strategy envisions a competitive private sector
that will be an engine of sustainable economic growth,
generating a decent work environment that offers
productive employment in Africa in the next decade
and beyond.
Its main objective is therefore to contribute to sustainable
African development and poverty reduction by promoting
broad-based economic growth through effective private
sector development. To help meet the objectives of
7 African Development Bank. 2011. African Development Report (ADR). AfDB. Tunis.
inclusive growth and transition to green growth, AfDB will
aim to catalyze and leverage private sector resources.
This objective is consistent with:
• the Bank’s 1964 Charter, which calls for the Bank “to
promote investment in Africa of public and private
capital in projects or programs designed to contribute
to the economic development or social progress of
its regional members” 8 ; and
• theBank’s 6th General Capital Increase (GCI-6) and
the 12th replenishment of the African Development
Fund (ADF-12) strategic goal of fostering development
through the private sector.
The AfDB Group will achieve this objective by increasing
as much as possible the development impact of its
private sector activities by capitalizing on its track
record, its comparative advantages, its unique business
perspective, and lessons it has learned from previous
strategies in a way consistent with its institutional goals.
2.2 Bank Group Positioning
The Bank Group has a unique position as an African
organization serving Africans. Its main source of
comparative advantage is its African character and its
central place in the African development institutional
architecture.
Established fifty years ago by independent African states
to contribute to “the sustainable economic development
and social progress of its regional members individually
and jointly” 9 , the Bank has delivered on its mandate with
over US$100 billion in financing of projects for Africa’s
development, an increasing number of which focus on
private sector development. The Bank Group is majority
African-owned and completely focused on the continent.
Through its analytical products and the knowledge of its
staff, it has deep understanding of Africa’s institutional
history and political economy. In addition to its African
8 Article 2, “Agreement Establish-ing the African Development Bank”; signed August
4, 1963 (Khartoum, Sudan).
9 Ibid., Article 1.
6 Private Sector Development Strategy, 2013-2017