African governments have been urged to give all the necessary support to the private sector in exploring the vast opportunities that abound on the continent.
This will help tackle unemployment and poverty and create wealth, the Director of Regional Integration and Trade Division of the United Nations Economic Commission for Africa (UNECA), Stephen Karingi, said in a paper on Thursday at the ongoing Third Economic Community of West African States (ECOWAS) Investment Forum in Lagos.
The UNECA official who spoke on “Africa as a haven for investments: Opportunities and challenges,” said that the private sector as an engine room of growth must be provided with the enabling environment to operate.
Karingi said sustaining Africa’s growth trajectory and creating millions of jobs, which were badly need in view of growing youth unemployment, would require massive investments in which the domestic private sector must be a critical driver.
“To this end, getting the environment right for domestic private investment is pivotal for ushering a meaningful role for the various types of private sector operators in the continent’s development: firms engaged in the micro and informal sector, small and medium scale enterprises (SMEs), larger SMEs and export oriented industries,” he said.
Karingi noted that the responsibility for establishing business-friendly policy and regulatory environment rested with African governments, with sustained political commitments at the highest level.
He identified such roles to include ensuring the requirements for macroeconomic stability, law and order; property rights; and providing support for building strong institutional and entrepreneurial capacity.
Others are identifying market niches; promoting market development in the agriculture and rural sectors; providing targeted support to micro/small and medium scale enterprises; removing legal and administrative constraints to help transform the vibrant informal sector to the formal sector; bridging the credit gap through programmes to encourage greater flow of credit to the small and medium enterprises sector.
He also stressed the imperative for opening up regional markets for the private sector to flourish in Africa.
”That requires promoting regional inter-linkages across Africa’s regional economic communities by investing in the ultimate creation of the African Common Market of over one billion people. Imagine the opportunities that such a single common market with free movement of goods, people, services, investments and capital will create for investors like those present in this Forum and indeed for the average African citizens,” he said.
In another presentation on “ECOWAS Common Investment Market (ECIM) – Emerging regional opportunities for investors,” Dr. Jonathan Aremu of the ECOWAS Commission said the ECIM was established to enable the region to attract greater and sustainable levels of investment through creating an international competitive investment area.
He said this would allow for free movement of capital, labour, goods and services across borders of the 15 member states.
“It will expand economic space for regional actors for investments since national markets of most ECOWAS countries are too small to attract sizeable investment on their own. It will also satisfy the desires of multinational fund managers and other investors all over the world who now give preference to regional, rather than national markets in making decisions on where to invest,” he added.