Carlos Lopes on how to unlock opportunities for private sector growth

Africa has faced various challenges in recent times, including a poly-crisis that has made the economic landscape uncertain. However, amidst these difficulties, the continent has displayed remarkable resilience, largely driven by the adaptability of its people and businesses. Carlos Lopes, Honorary Professor at Nelson Mandela School of Public Governance, emphasized the importance of unlocking economic value from abundant natural resources, accelerating industrialization and diversification, and fostering sustainable development during a recent interview with CNBC Africa. Lopes highlighted Africa's unique ability to innovate and repurpose in the face of limited resources. Despite not having the luxury of large stimulus packages like wealthier nations, African countries have shown ingenuity, particularly through small businesses. The continent's capacity for adaptation has consistently exceeded expectations, underscoring the potential for increased private sector participation in GDP. The conversation also delved into the critical role of the private sector in driving economic growth, especially in light of recent shocks experienced by governments. Lopes emphasized the need for innovative approaches to include private sector players in development plans, noting that many countries have not fully leveraged this potential. Access to capital remains a major obstacle for businesses in Africa, largely due to a lack of savings culture and incentive structures within the private sector. However, countries that have prioritized creating conducive environments for businesses have shown greater resilience and success. Furthermore, Lopes emphasized the importance of tailored fiscal policies that empower African nations to make independent decisions. Reclaiming fiscal sovereignty is crucial for adapting to a global landscape marked by nuanced protectionism. By strategically investing in ecosystem dimensions that support private sector growth, countries can enhance their competitiveness and foster opportunities for businesses to thrive. Case studies of countries like Cote d'Ivoire, Togo, and Nigeria highlight the positive impact of private sector interventions in driving economic progress. Projects such as the Dangote refinery in Nigeria showcase the scalability and potential of private sector investments in Africa. Governments play a pivotal role in creating the necessary policies and ecosystems to support such initiatives, as demonstrated by the successful examples mentioned. As attention turns to countries rich in strategic minerals, such as the Democratic Republic of the Congo (DRC) with its cobalt resources, Lopes emphasized the need for transformative economic reforms. He cautioned against falling into a rent-seeking model that perpetuates dependency on resources, drawing parallels to the challenges experienced by oil-rich nations like Nigeria. The key, according to Lopes, lies in shifting towards a reformist approach that prioritizes economic transformation and sustainability. Ultimately, the path forward for Africa's private sector growth hinges on strategic decision-making by governments, proactive policy frameworks, and a collective effort to leverage the continent's abundant resources for long-term development and prosperity.