NEPAD and the Private Sector: Progress

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NEPAD and the Private Sector Progress
Challenges
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Realities of African Economies Prior to NEPAD

• Small with scattered isolated markets
• Weak capacity to fully utilize effectively
  transform natural resources
• Low adaptation of technology

• Consequently
• Weak intra-African market trade linkages

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NEPAD
The New Partnership for Africas Development
(NEPAD) was approved in July 2001 as the
Socio-Economic Development Programme of the
African Union.
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PRIMARY OBJECTIVES

• Accelerate poverty reduction.
• Promote self reliant sustainable development.
• Promote the economic empowerment of women.
• Promote sub-regional and continental economic
  integration.

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KEY PRIORITIES

• Establishing conditions for development
• Conflict Resolution
• Democracy and human rights
• Political, economic and corporate good
  governance
• Accelerating regional economic integration

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KEY PRIORITIES cont.

• Accelerating policy reforms and investments in
  high priority sectors
• Agriculture nutritional food security
• Infrastructure
• Health
• Education
• Science Technology
• Mining Tourism
• Diversification of Production Exports

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KEY PRIORITIES cont.

• Altering the relationship with developed
  countries and multilateral institutions in the
  following areas
• Market Access
• Debt
• ODA
• FDI
• Increasing internally generated savings and
  investments.

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PROGRESS TO DATE

• Strengthened political leadership in conflict
  resolution and championing of socio-economic
  transformation.
• Developed policy frameworks and detailed plans
  for the transformation of key sectors
• Political, economic and corporate governance
• Agriculture
• Health
• Infrastructure
• ICT
• Science Technology
• Capacity building in the Public Sector

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PROGRESS TO DATE cont.

• Completed the preparations for the African Peer
  Review process.
• 18 Countries signed up to the APRM
• Review starting with Ghana, Rwanda, Mauritius and
  Kenya
• Engaged RECs on the implementation of the NEPAD
  programme.
• Engaged the multilateral development finance
  institutions and development partners on the
  nature and scale of development support.

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NEPADs Private Sector Vision

• Objectives
• Conducive Environment for a thriving Private
  Sector, especially in attracting Domestic
  entrepreneurship
• Export as a focal point for attracting FDI into
  Africa
• Development of the key concept of
  micro-small-medium-scale enterprises
• Eventual formation of strong and integrated
  African Economic Community in the long term

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NEPAD P.S. OBJECTIVES

• Framework of local market engagement and
  international linkages
• Mobilization of capital
• Mobilization of technology
• Mobilization of human skills
• Through Partnership Investment
• Economic growth
• Poverty alleviation
• Intra-regional trade
• Environment protection
• Private Sector inevitable tool for this role

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Role of Private Sector in NEPAD

• PPP. Public Private Partnership Inevitable
• To nurture emerging Private Sector in fulfilling
  the Development Agenda
• To create the necessary regulatory environment
  for a thriving private sector
• To complement private sector participation in
  revamping African Infrastructure the bedrock to
  Sustainable Development
• Generation of stable political and social
  environment for good corporate governance to
  sustainably prevail.

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Role of the Private Sector in NEPAD (b)

• International Partnerships
• No more aid but partnership in trading
  investment
• Visible institutional frame works such as the APF
  for mutual deliberation on need areas.
• Therefore, ODA to be now based on informed and
  mutually agreed need
• ODA as useful development agenda utilized
  according to market and investment principles
• FDI inflow directly into identified defined
  projects on sale according to standard
  international business criteria

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Role of the Private Sector in NEPAD (c)

• The NEPAD Business Group NBG
• Structured engagement process for business
  outreach, interlink and networks
• Vision sharing, focus, inclusiveness
  integration.
• On sidelines UN Conference on Financing for
  Development, Monterrey, Mexico Sec Gen. Chaired
  meeting formalizing the NBG
• Comprised international business associations
  dedicated to the NEPAD philosophy local
  business interests organized around the nation-
  state or region

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Role of the Private Sector in NEPAD d

• NBG In Action
• Africa as unattractive investment destination
  (outside of extractive industries) and yet with
  worlds best returns on investment. Why?
• Revolutionize the way and manner of doing
  business in Africa e.g. through Private Sector
  driven Investment Climate Facility ICF

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Role of the Private Sector in NEPAD e

• Common Traps to Successful Enterprising
• Lack of business management skills.
• Lack of experience.
• Lack of financial control.
• Lack of proper capitalisation of the business.
• Lack of customer credit control.
• Over-investment of fixed assets.
• Lack of planning and decision-making skills.
• Poor business ethics.

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Role of the Private Sector in NEPAD e NBG in
action (2)

• Consensus has emerged that in Africa an
  appropriate regulatory institutional
  environment is the single most important
  component to a countrys economic growth
  strategy.
• ICF to assist countries to establish simpler,
  better and appropriate legislation and policies
  that would attract FDI, encourage trade, create
  jobs and open up economies

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Role of the Private Sector in NEPAD e NBG in
action (3)

• ICF to improve on business support infrastructure
  such as quality of information, better financial
  access and services by business, credible
  partnerships, etc.
• ICF to address key cross-cutting issues relevant
  to business such as corruption, crime, and
  corporate governance structures

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Role of the Private Sector in NEPAD (f) Corporate
Governance

• Evolving an internationally credible rating
  system for Africa
• E.g. The Seal of Good Corporate Governance began
  by the African Business Roundtable ABR
• Companies would be forced to toe the line of
  business practice transparency and to adhere to
  strict accounting principles.
• Business would be obliged to carry out good
  corporate social responsibility in usefully
  serving the communities in which they operate

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Role of the Private Sector in NEPAD (f) Corporate
Governance(continued)

• Ensuring inclusiveness and efficiency in the
  different levels of business practice
• Trans-nationals will show greater openness and
  correct information on their activities
• SMMEs will be more inclusive and relevant in
  local economies through adherence to standardized
  practices and procedures.

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NEPAD Partnership Model
African Renewal Partners (Ideological base)
Political Corporate Governance Institutions
(e.g. APRM, parliaments, auditors,
media, electoral commissions,)
Government Ministry parastatal programs
Funders DBSA, IDC Private Foundations Other
financial services
NEPAD SECRETARIAT COUNTRY PRESIDENCIES
Community Structures e.g. Youth Womens
Groups Religious groups, etc.
Entrepreneurial Partners Local Regional
investors, Producer groups service providers
Research, Academic Training Institutions
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Conceptual Realities and Challenges

• No more aid but Trade and Investment in Africa
  means African business must be institutionally
  and financially poised into competing in an
  aggressive, enlightened and fast-moving global
  economy.
• African business must truly understand their
  agenda for best survival in dealing with
  unfavourable terms of trade, international trade
  negotiations, etc.
• African business must develop strategies to
  reverse the alarming rate of domestic capital
  flight from the continent (the highest in the
  world), and rather, encourage the inflow of
  remittances by Africans in the Diaspora. Global
  remittance flows now total almost 100b annually
  bigger and growing faster than ODA.

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Conceptual Realities and Challenges (continued)

• Deepening ownership and strengthening courage of
  African Countries to speed up socio-economic
  transformation.
• Delivering on visible quick initiatives.
• Increase the tempo of peer reviews.
• Sustaining the interested commitment of
  development partners and multilateral
  institutions.
• Achieving break-throughs in WTO Trade
  negotiations, debt cancellation and increased
  capital flows.

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Thank you