African countries urged to support private sector to thrive

Vice President Dr Bawumia

Vice President Dr Bawumia

The Vice President, Dr Mahamudu Bawumia has reiterated the need for African countries to create a congenial environment for the private sector to thrive and provide the needed finance to grow their economies.

Opening the maiden G-20 Compact with Africa (CWA) meeting in Accra yesterday, Dr Bawumia said that with the dwindling aid to Africa, the private sector would remain key partner for African governments to raise the necessary financial resources to finance developmental projects.

He also noted that the private sector would remain a key sector in creating employment to absorb the growing unemployed youth.

The programme  was  attended by Finance Ministers from seven African countries – Ghana, Cote d’ Ivoire, Ethiopia, Morocco, Rwanda, Senegal and Tunisia and observer countries –  Burkina Faso, Benin, Gambia, Guinea, Liberia and Togo –  which form the CWA compact  to discuss roles the CWA could  play in the economic transformation of their countries.

 

The CWA, an initiative of Germany, is a G-20 partnership programme to support the African Union Agenda 2063 and is meant to engage African countries in building a reliable financial and macroeconomic framework to expand investment opportunities create employment and push for more sustainable infrastructure on the continent.

The Vice President, urged African governments to develop their economies beyond aid and mobilise internal resources to facilitate national development.

“We should remember that the aid landscape is shifting and that aid inflows from traditional donors are dwindling across Africa.  This surely means that we must begin to contemplate a future beyond aid, and also a future with enhanced productive capacity, with a robust private sector, and where our infrastructure gaps are met,” he said.

He said the pillars of the CWA were in line with the governments goal of building a business friendly environment unparallel in Africa that would create jobs and stimulate growth and wealth creation.

“Under the macroeconomic framework pillar of CWA, we are focused on prudent expenditure management to reduce expenditure, broadening the tax base, enhancing tax compliance to reverse the unfavourable debt dynamics,” he said, adding that “we are also pursuing domestic debt re-profiling to lengthen maturities and reduce the cost of credit.”

Dr Bawumia said under the business framework, the government was creating a Ghana Business e-Registry and developing model contracts in line with international standards and was also reducing dominance in the domestic debt market and promoting corporate issuance under the financial pillar.

The Vice President further said the CWA offered opportunity for Ghana to re-focus her attention on areas where investment was badly needed, namely agro processing, renewable energy, financial sector, infrastructure, transport and aluminum, petrochemical and tourism sectors.

Dr Bawumia urged the member countries to “own and drive the implementation of the CWA,” and stressed “we need to be ambitious and bold.”

The Minister of Finance, Ken Ofori-Atta in his address said private sector investment would be critically needed as part of efforts of African governments to develop infrastructure and create jobs for the youth.

He also said given that Africa’s share of global aid was only four per cent and share of global manufacturing was only two per cent, there was the need to support the private sector to grow to accelerate the development of the continent.

Mr Ofori-Atta said the CWA meeting, among others, would discuss and share experiences on domestic revenue mobilisation and leveraging on the continent’s natural resources to raise finance to reduce Africa’s debt burden.

By Kingsley Asare

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