Connect with us

General News

Private sector forecast for 2019 positive



More by this Author

Agriculture, manufacturing, trade, tourism, transport, communication and financial services account for over 80 per cent of the private sector’s contribution to the gross domestic product (GDP) in Africa.

Growth in the private sector is increasingly driven by trade, transport, ICT, financial services, investor incentives and support by stable economies. Africa is showing good progress and infrastructure investment is expected to open significant trade opportunities.

Investment in technology is also giving business a leap, with growth even in areas like the use of internet of things and Artificial Intelligence which will result in greater innovation and a differentiated, new feel in customer experience.

All is set for global and regional investments to grow in Africa as we move to a stronger private-public economic development phase.

The next decade must be driven by private sector interest and innovation around product and services, especially in East Africa with Kenya leading with a focus on President Uhuru Kenyatta’s Big Four Agenda.

Africa is experiencing a period of strong economic opportunities, with many countries adopting policies to energise markets, increase openness in trade, provide critical physical and social infrastructure, lower corporate taxes, and give incentives to investors.

This will in turn accelerate development and diversification of the private sector.

But as levels of urbanisation and the working-age population increase, the healthcare sector needs to adapt to new challenges and there is need to take advantage of innovation to improve quality of life.

A focus on trade, especially increasing exports, gives a good proposition for both local and foreign investors with the advantage of a growing market. The benefits of private-public partnership beyond 2019 will progress economic growth, innovation and employment.

In Kenya, the private sector is expected to be the game-changer in achieving the development agenda.

In the next five years, the government intends to expand manufacturing and increase its contribution to GDP from 9 per cent to 15 per cent; achieve universal health coverage, facilitate the construction of half a million low-cost houses and ensure food security.

In my view, tapping into the private sector to accelerate infrastructure development through partnership with the public sector will benefit the country.

Kenya is the largest and the most advanced economy in East and Central Africa with strong growth prospects supported by a rising middle class and an increasing appetite for high-value goods and services.

Looking at an example of international support, the Japanese government has been actively working to encourage investment from the Japanese private sector.

An example of this is the Tokyo International Conference on African Development (TICAD), which the Japanese government has been hosting with the United Nations and other international partners (initially) every five years since 1993.

The role of private sector became more heavily focused after the 4th TICAD in 2008.

In 2016, the 6th TICAD was held for the first time in Africa with Nairobi hosting.

International partnerships and private/public support are critical for infrastructure development that will grow intra-Africa trade.

But African governments and regional development banks alone do not have sufficient resources. The private sector must step in.

Mr Diaz is a Director of East African Business Council and Brand Africa.