In the world’s poorest and least developed region, sitting on a cradle of wealth, the hope for development and transformation is ominous. Africa’s riches has been left unsubdued or misused by political leaders. Political immorality has curtailed our potential. Dreams of our forefathers are being busted every after dawn and before dusk. Nonetheless, we all agree that this needs to change!
From the onset, development and transformation needs to be adopted as a national goal, driven by every sector. My main agenda, if I was an African leader, will be to oversee a paradigm shift from our donor-driven economic policy to a more incented, reformed policy framework that supports the dynamic African economy. How then can this dynamism be extended to development and transformation? The private sector is the answer. The private sector is high-powered and is well and able to finance development and transformation. Pursuant to the findings I have made, mobilization of private capital specifically to fund our economy sectors should be a priority.
I will, head most, develop a strategic mechanism that will collaborate the private and the public sector to ensure development and transformation is achieved. Whereas the public sector plays the dominant role in setting the tone, it requires the innovativeness, resourcefulness and the influence of the private sector in ensuring effective service delivery and cutting cost. While launching the 4th edition of the Dubai Future Accelerators, Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Dubai Crown Prince and Chairman of the Board of Trustees of Dubai Future Foundation, acknowledged the fact that Dubai’s continued partnerships with leading institutions in the private sector has positively impacted their development. It’s exactly what I would embrace in my administration; harmonizing the friction between the public sector and the private sector.
A public sector dominated economy is not only inefficient but also lame. This replaced with the private sector dynamism stabilizes our underpinned economies. For instance, developing infrastructure which is a pillar for economic growth and transformation, requires the partnership of the public sector and the private sector. As far as efficient infrastructure is concerned, the private sector expertise is paramount and therefore a necessary partner in developing sustainable industrialization. The profit seeking nature of the private sector can help sustain the development and transformational demands. This helps in risk mitigation that saves the public resources a lot of waste. Given the opportunity to share on the development bread, the private sector is ready to drive along this road.
Aligning private sector development priorities to that of the public is one workable strategy I would use. This entails a shift in the role of the public sector from supplying to buying services, with private firms designing, constructing, financing, operating and maintaining infrastructure, and the public sector paying for these services. Such arrangements are meant to provide incentives for the private sector to increase production. This catalyzes development in the country, as both sectors focus in maximizing service delivery in their different setups.
I would come up with better regulatory framework that will create an enabling environment for the injection of private finance. This will support the private sector in investing in sustainable development. Provision of incentives will be necessary to ensure that the private sector efforts do not amount to losses. Resources needed to fund the sustainable development goals will come from the private sector. Some of these public finance can be generated through the Foreign Direct investment (FDI). This, however, does not come on a silver-platter. As a nation, our industrial capacity needs to strengthen. This starts with developing infrastructure and human capital, strengthening institutional capabilities and economic openness, and promoting sound macroeconomic policies. Much needs to be done to control our inflation rates in line with stabilizing our economy. Our capital flows needs to be aligned and connected to the needs of the economy.
There is plenty capital in regions that do not need much of it while scanty in countries that need it most. First, we must address the barriers which stop finance from flowing into our nations. Breaking down these barriers allows the private capital flow into the country. H.E Mr. Miroslav Lajčák, President of the 72nd Session of the UN General Assembly, would say, “Too much of our capital is staying where it has always been. It is gathering in pools, within familiar borders. We need to turn these pools into rivers. And we need to make them flow in new directions. In particular, over these borders, and into developing countries.”
Privatization of public corporation is another strategy I would use to achieve sustainable development and transformation. The efficiency in allocating resources, entrepreneurship, high productivity and innovation, makes privatization an important ingredient in financing development and transformation. Private ownership leads to higher rates of productivity growth and reduces costs in the long run. Evidence suggest that public corporations have low production efficiency compared to the privately owned companies. Forasmuch as the economy will be left in the hands of the private sector, my government will provide regulatory framework in the economic environment and also provision of public goods. In the meantime, my government will embrace privatization and enjoy the vast benefits it comes with. Privatization positively influences development and transformation by reducing the government budget deficits, strengthening the capital markets, financing and providing resources to build infrastructure and fostering a healthy competition among different sectors and in turn boosting the economy.
The private sector is a major stakeholder as far as scaling down the rate of unemployment is concerned. This is an indirect way of financing development and transformation as it prevents subversion of resources, like the unemployment benefits, to more economic development activities. There is a lot of mismatch in skills and lack of experience among the youth today. The private sector can grant us the avenue to provide training and workplace internships to young persons. Increasing the employability of the youth goes a long way in promoting development by increasing the per capita income of the nation. The private sector will in this case be encouraging the youth to engage in gainful economic activities, either as an employee or entrepreneur.
Increasing the Private sector finance and resources flow is also essential in eradicating the poverty levels in the country. The private sector in harnessing the power and dynamism of the market, scales up the resources and opportunities for people living in abject poverty. What needs to standout is the effectiveness of the private sector in providing jobs, goods and services compared to the government. The private sector provides longer term benefits to the economy if its developmental goals are substantiated.
Embroiling the private sector in our development and transformational plans is decisive and urgent, if we have any chance of achieving them. They draw a colossal pool of finance and capital and hence their necessity cannot just be ignored, underestimated or wished away!