Vibrant private sector crucial to economic growth in Africa
East African Community Headquarters, Arusha, 10th July, 2023: Kenya’s Cabinet Secretary for East African Community and Arid and Semi-arid Lands, Hon. Rebecca Miano, has underscored the importance of a vibrant private sector in promoting economic growth at the national, regional and continental levels in Africa.
Hon. Miano said that the Private Sector accounts for 80 per cent of Africa’s total production, two-thirds of investment and three-quarters of credit in addition to employing 90 per cent of the continent’s working-age population.
Ms. Miano said that a robust private sector was indispensable to the realisation of Africa’s sustainable and economic transformation.
“The success of Africa’s economic integration is premised on the role of the private sector in achieving growth objectives of Africa’s economies, and by extension, creating greater wealth and expanding employment opportunities,” said the CS.
Ms. Miano urged African Regional Economic Communities, the EAC included, to upscale investment in agricultural and extractive industries through value addition to expand the potential of both value chains.
“Regional value chains are essential for promoting intra-African trade, economic integration, and industrial development. They offer opportunities for countries to leverage their comparative advantages, enhance productivity, create jobs, and increase their share of value-added activities within the global economy,” said Ms. Miano.
The CS was giving the keynote address during the opening session of the 14th African Union High Level Private Sector Forum at the Kenyatta International Convention Centre in Nairobi, Kenya.
The CS said that collaboration of regional value chains in Africa will open up domestic markets, achieve economies of scale and improve competitiveness in the global market arena.
“To increase their overall output, Africa’s Regional Economic Communities need to harmonise trade policies, scale down non-tariff barriers, improve transportation infrastructure, and promote skills development and technology transfer, all of these, key drivers to Africa’s integration in trade and investment,” she said.
Speaking at the forum, the EAC Deputy Secretary General in charge of Customs, Trade and Monetary Affairs, Ms. Annette Ssemuwemba, urged the Forum to come up with practical and timely solutions to the current economic crisis facing the African continent caused in part by the Covid-19 pandemic, adding that EAC Partner States economies were on a growth trajectory, though slowly.
“The post-COVID-19 economic recovery since 2021, indicate the region’s GDP growth of approximately 4% in 2022 and is expected to increase to 4.7% by end of 2023 as countries continue reopening their economies. It suffices to note that all EAC Partner States have experienced positive growth ranging from 1.5% to 11% in the last two years,” said Ms. Ssemuwemba.
Ms. Ssemuwemba, who represented the EAC Secretary General, Hon. (Dr.) Peter Mathuki, said that the agricultural sector in the EAC had over the last three years faced challenges attributed to drought, and other economic shocks that have resulted in reduction in agricultural production ranging from 2.6% to 7% across the entire region.
“Export of agri-food declined by 13% and 25% in low- and middle-income countries. These have worsened the food security situation in most African countries and foreign earnings by African countries,” said Ms. Ssemuwemba.
The DSG said that despite the numerous opportunities that have been brought about by AfCFTA that offers the continent an opportunity to grow intra-Africa trade with a market of over 1.2 billion people, leaders and policy makers need to come up with measures to address the many challenges that impede the continent from harnessing this opportunity.
“For example, the infrastructural backlog of connectivity and energy, low industrialisation and persistent Non-tariff barriers among many other challenges. Focus on removal of non-tariff barriers (NTBs) which impede trade among African countries is of priority,” said Ms. Ssemuwemba.
“Regional Economic Communities (RECs) and governments critical in the process of eliminating NTBs should to take lead in harmonisation of policies and legal frameworks to facilitate cross border trade. This however requires strong political will for these efforts to bear fruits,” she added.
Ms. Ssemuwemba observed that limited industrialisation was one of the reasons intra-Africa trade is still very low, adding studies had established that Africa will need its own unique approach to industrialisation.
“Industrialisation policies must increasingly account for the ways that industrialisation is changing, including the rise of digitalisation, changes to organisational models of production, and the geographic distribution of production,” she said.
Ms. Sssemuwemba said that Africa’s industrialisation policies must be greener than the industrialisation that occurred before while navigating growing geopolitical divides, the re-emergence of concerns around supply chain security, and the disintegration of constraints to adventurous policymaking space, noting that all these issues require combined public-private dialogue.
In her remarks, the Chairperson of the East African Business Council, Ms. Angelina Ngalula, said that the successful implementation of the AfCFTA will lead to an increase in Africa’s income by US$450 billion by 2035, the creation of more decent jobs, improved welfare, better quality of life for all citizens, and sustainable development.
Ms. Ngalula urged State Parties to the AfCFTA in collaboration with the private to carry out a mass awareness campaign on the opportunities for trade under the AfCFTA to ensure meaningful trade integration at the continental level.
“Expedite and finalise negotiations on the AfCFTA Rule of Origin (RoO) specifically on textiles and motor vehicles as a key step for harmonising rules and determining the nationality of products traded across Africa. This should go along with formulating a common position on the status of the goods produced under the EPZ/SEZ scheme,” added Ms. Ngalula.
Ms. Ngalula further called for the operationalisation of key AfCFTA implementation instruments namely the Pan-African Payment Settlement System to enable payment transactions across Africa, and the AfCFTA Adjustment Fund aimed at supporting State Parties to adjust to the new liberalised and integrated trading environment established under the AfCFTA Agreement.
Other speakers at the opening session were the African Union Commissioner of Economic Development, Trade, Tourism, Industry and Minerals, H.E. Amb. Albert Muchanga, the Chair of the Kenya Private Sector Alliance (KEPSA) Industrialization and Trade Sector Board, Ms. Susan Maingi, for the KEPSA CEO, Ms. Carole Kariuki, Ms. Emily Mburu-Ndoria who represented Secretary General of the AfCFTA Secretariat, H.E. Wamkele Mene, and Dr. Amany Asfour, President of the Africa Business Council.
For more information, please contact:
Simon Peter Owaka
About the East African Community Secretariat:
The East African Community (EAC) is a regional intergovernmental organisation of seven Partner States, comprising the Republic of Burundi, the Democratic Republic of Congo, the Republic of Kenya, the Republic of Rwanda, the Republic of South Sudan, the Republic of Uganda and the United Republic of Tanzania, with its headquarters in Arusha, Tanzania.
The EAC Secretariat is ISO 9001: 2015 Certified