A Decade of NEPAD - Economic Commission for Africa - uneca

40 A Decade of NEPAD: Deepening African Private Sector and Civil Society Ownership and Partnership
ӹ Promote intra-African trade with the aim of sourcing
within Africa, imports formerly sourced from other
parts of the world;
ӹ Creating marketing mechanisms and institutions to
develop marketing strategies for African products;
ӹ Publicize African exporting and importing companies
and their products, through trade fairs . . .
Two further private sector related objectives included
increasing domestic resource mobilisation and private
capital flows.
ӹ Increasing Domestic Resource Mobilisation
To achieve higher levels of growth and more effective
poverty reduction, Africa needs to mobilise additional
resources, both domestic and foreign. Domestic resources
include national savings by firms and households, which
need to be substantially increased. In addition, more effective
tax collection is needed to increase public resources,
as well as the rationalising of government expenditures.
A significant proportion of their domestic savings is lost
to African countries as a result of capital flight. This can
only be reversed if African economies become attractive
locations for residents to hold their wealth. Therefore, there
is also an urgent need to create conditions that promote
private sector investments by both domestic and foreign
investors.
ӹ The Private Capital Flows
NEPAD seeks to increase private capital flows to Africa,
as an essential component of a sustainable long-term approach
to filing the resource gap [of roughly US$64 billion].
The first priority is to address investor’s perception
of Africa as a “high risk” continent, especially with regard
to security of property rights, regulatory framework and
markets. Several key elements of the New Partnership for
Africa’s Development will help lower these risks gradually,
and include initiatives relating to peace and security, political
and economic governance, infrastructure and poverty
reduction. Interim risk mitigation measures will be put in
place, including credit guarantee schemes and the strong
regulatory and legislative frameworks. The next priority is
the implementation of a Public-Private sector partnership
(PPP) capacity building programme through the African
Development Bank and other regional development institutions
to assist national and sub-national governments in
restructuring and regulating transactions in the provision
of infrastructural and social services. The third priority
is to promote the deepening of financial markets within
countries, as well as cross-border harmonisation and integration,
via a Financial Market Integration Task Force.
Although presented “for illustrative purposes only”, it is
relevant that of the three priority projects that were presented
to represent what was needed to strengthen “country
and regional development programmes and kick-start the
regeneration of the continent” (along with agriculture and
the promotion of infrastructure and regional integration)
the establishment of a continent wide initiative to
establish national business incubators (in support of the
African private sector) that would draw on international
experience and best practice-tailored to African needs and
conditions, was also put forth.
After ten years of implementation there has been progress
in a number of the areas put forth as objectives of the NE-
PAD mission vis-à-vis the private sector, although most
noticeably these gains have been in the area of macroeconomic
environment improvement. And while it might
be slightly disingenuous to attribute all of these gains exclusively
to NEPAD, it is irrefutable that over this period,
particularly among Africa’s traditional international donor
partners, the emergence of NEPAD as the AU programme
for economic growth and development toward the achievement
of the MDGs has helped focus their overseas donor
assistance in a more harmonised manner.
The rapid economic growth that has been present for much
of the period during which NEPAD has existed in part is
the result of a macro-economic reform trajectory begun
by African states in the 1980s.
Inflation management, improved monetary policy,
strengthened rule of law, protection of property rights,
reduction in the cost of doing business, technology adoption,
innovation and capital accumulation, democratic
elections, debt reduction and value added export promotion
are some of the initiatives that have characterised the
types of public sector reforms undertaken.
In addition to the economic reforms, other important
factors which buoyed Africa’s economies included higher
international commodity prices, political stability and a
rapid reduction in conflict, and increased government
spending. Debt relief, in particular, under the World Bank’s
Heavily Indebted Poor Countries (HIPC) programme