THE AFRICAN PRIVATE SECTOR AND THE NEPAD

Since its inception in 2001, the New Partnership for Africa’s Development (NEPAD) has emphasized the key role of the private sector in contributing to Africa’s economic growth and development. Notwithstanding the paramount importance of the private sector, African private sector’s participation in NEPAD programmes has been rather limited, due to its weak development as well as limited awareness of and institutional ability to benefit from the opportunities in NEPAD programmes. In all three sub-regions (Southern Africa, Western Africa and Eastern Africa) participation of the private sector in most NEPAD projects and programmes has been limited and remains a stumbling block for NEPAD implementation.

Organized business associations such as African Business Roundtable, Nigerian Business Group (NBG) and the chambers of commerce and manufacturers’ associations can play an important role in overcoming this problem. Regional and sub-regional private sector associations are especially relevant in Africa, given the large numbers of small and medium enterprises (SMEs) and weak development of the private sector, which require effective umbrella organizations to provide support and guidance. Private sector associations can help mobilize private sector involvement in NEPAD, including particularly, involvement of numerous SMEs.

The issue of structured business representation therefore assumes a particular significance. Despite its importance as a key factor in the mobilization of the private sector for NEPAD implementation, the degree to which private sector associations are organized to take advantage of, and participate in the implementation of NEPAD is very limited.

Even in Southern Africa, organized business has not really been able to utilize the relative strengths that its sub-regional economic setting could impart for it to take optimal advantage of NEPAD for its members. The only exception is NEPAD Business Foundation (NBF) of South Africa, which promotes NEPAD projects and has relatively big capacity to encourage its members to take advantage of emerging business opportunities in NEPAD projects.

In Eastern Africa, mechanisms and structured representation geared towards the exploitation of NEPAD opportunities do not presently exist in all Eastern African private sector associations. One exception is the Contractors Association, which is critical for NEPAD implementation, as it has some administrative and technical capacity to exploit NEPAD opportunities.

In the case of Western Africa, in order to help strengthen associations’ institutional capacity, it is deemed as necessary to group several business associations into a small number of associations for institutional consolidation.

Conclusion and policy recommendations

There is insufficient preparedness and strategic readiness, which in turn include lack of ability to mobilize resources for organizing to bid for NEPAD projects. On the preparedness and readiness issue, there is a need for institutional consolidation of the private sector associations as an intricate part of the strategy to prepare them to achieve their sectoral policy goals and objectives. This entails building adequate capacity of the associations and their members.

Other problems pertain to poor awareness of organized business regarding NEPAD-related business opportunities, which has had a great detrimental effect on their ability to facilitate access by their members to such opportunities. It warrants urgent remedy on the awareness problem among private sector associations.

There are also insufficient training and advocacy activities by the private sector associations that are partly attributable to the nature of associations as essentially nonprofits, operating on a low budget. Particularly, with regards to capacity problem, it is essential to identify capacity gaps in the private sector associations. Capacity building should also aim at building skills in the associations on project preparation, packaging, marketing and financing.

The resulting policy recommendations entail clarification of respective roles of all stakeholders, including, the associations.

Several policy recommendations can be made, on the basis of role definition of all stakeholders, including particularly, those already- mentioned private sector associations: Specifically concerning the associations, there is need for institutional consolidation and strengthening of the associations’ capacity to broker strategic partnerships of all stakeholders and facilitate PPPs and to secure requisite funding, while also developing effective outreach programmes to address the lack of understanding of NEPAD-related opportunities. In particular, there is the urgent need to leverage financial resources, local private sector associations.

The primary role of business associations in promoting NEPAD is not financial or project funding, but promotional and facilitating role. In this context, brokering of strategic partnerships that allow their members’ active participation in NEPAD projects is deemed particularly useful. They also need to sponsor and participate in an interactive dialogue with all stakeholders, including their members. In particular, it is important for the private sector associations to include NEPAD opportunities for the private sector in the agenda of the associations’ regular membership meetings. They should also identify profitable areas in NEPAD for its membership participation, while also setting up a mechanism within their associations that would coordinate financing for its members to implement NEPAD projects.

In addition, the associations should sensitize their members about emerging NEPAD-related opportunities and projects that exist both locally and internationally. Furthermore, they should raise NEPAD issues in business-government consultations, while also considering the need for private sector associations’ own NEPAD focal point, to liaise in a structured manner with the government NEPAD focal point.