Role Of The Private Sector In Africa’s Economic Transformation

Kenya Private Sector Alliance (KEPSA) together with the International Finance Corporation of the World bank Group, Africa Development Bank, Japan External Trade Organisation, Government of Kenya and the Africa Union Commission will  host a high policy dialogue on the role of the private sector in Africa’s economic transformation through diversification and industrialization.

The high profile event will take place during the Sixth Tokyo International Conference on African Development (TICAD VI) on Friday 26^th August 2016 at 2:00 pm at Kenyatta International Convention Centre.

H.E. President Uhuru Kenyatta will preside over the policy dialogue that is expected to host 250 participants drawn from top private sector leadership from Japan and Africa, development finance institutions and the public sector officials.

KEPSA CEO Ms. Carole Kariuki says Kenya continues to attract international conferences exposing the country as a global business hub. Noting, that TICAD VI is a good opportunity to showcase Kenya’s potential and discuss business opportunities and gaps with the Japan government and other partners.

“KEPSA will participate actively in the negotiations as it represents the private sector which is the engine of growth of any country and a key contributor to promoting economic growth and reducing poverty” said Ms. Kariuki.

However, she noted that the sector cannot work in isolation and needs to work with strategic partners to ensure conducive business environment. “The upcoming policy dialogue is one of our most important initiatives to negotiate and exchange ideas with development partners and industry stakeholders on how we can drive economic transformation in Kenya, the East African region and Africa in general” added Ms. Kariuki.

The policy dialogue will focus on two thematic areas: Infrastructure Financing for Africa – Partnerships and Risk Mitigation to Mobilize Private Sector Investment on a New Scale and Agribusiness and Productivity and the role of Innovation and Technology.

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Kenya has made significant progress in infrastructure development in recent years which can majorly be attributed to budgetary allocation to infrastructure that has progressively increased from less than 1% of GDP a decade ago to over 7% as of 2013. This increased to 22.6% in the KES 1.779 trillion 2014/15 budget.  However, infrastructure indicators remain below the levels found in middle income economies like Egypt and Nigeria.

The policy dialogue will explore how Kenya’s infrastructure can be brought up to the level of the region’s middle-income countries to boost the country’s annual growth as well as overall infrastructure improvement in Africa.

IFC Executive Vice President and CEO Philippe Le Houérou said, “IFC is working with other World Bank Group institutions and with governments and businesses to mobilize additional financing to spur economic development in Kenya and other countries in Africa. Governments play a big role in attracting private investment to infrastructure and other sectors, and we are optimistic that the policy dialogue around the private sector will encourage a way forward that can create jobs and alleviate poverty.”

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According to World Bank, Kenya’s agriculture value-add grew 14% per year since 2010 and currently stands at 30% of GDP. The country is sub-Saharan Africa’s leading tea exporter and one of the world’s largest black tea producers. Within East Africa, Kenya is the key producer, accounting for 59.6% of total production in Africa, well above its neighbors, Uganda (8.7%), Tanzania (5.1%), Rwanda (3.6%) and Burundi (1.2%).

Mckinsey and World Bank indicate that 75% of Kenya’s labor force is employed in agriculture, 75% of agricultural production is from smallholders. Kenya lags behind competitor countries in agro-processing. Food manufacturing value addition as a percentage of agriculture GDP stands at 13% while in South Africa and Egypt stand at 120% and 19% respectively.

Leveraging the capacity of private sector to drive the economic transformation process is paramount to Africa’s industrialization agenda. Countries must create an enabling business environment for private sector to thrive, and can boost productivity through targeted policy reform and investments

The Tokyo International Conference on African Development (TICAD) is a multi-stakeholder forum which has made significant contributions in galvanizing global partnerships for African development. Since its inception, TICAD has been promoting high level policy dialogue between African leaders and development partners on issues facing the continent, including poverty reduction, governance, conflict prevention, disaster management, integration of the African economy into the global economy, enhancing the role of private sector in development, boosting growth and diversifying the economy.

The TICAD VI Summit is scheduled to take place in Nairobi on 27-28 August, 2016. The Summit will build on the achievements of previous TICAD engagements as the issues still remain pertinent to Africa and will continue to shape development focus. Issues such as accelerating infrastructure and capacity development, promoting sustainable and resilient growth, empowering farmers as mainstream economic actors and consolidating peace, stability, democracy and good governance remain central to transformation of the continent.