The key to boosting growth in Africa is more private investment and responsible policymaking, a CNBC Africa panel at the World Economic Forum heard on Wednesday.
African politicians and business leaders want to see a stronger relationship between the public and private sector to ensure better regulation and clearer policy certainty to ultimately attract infrastructure spending.
“The most fundamental issue is, will there be consistency between the public and private sector,” Phuthuma Nhleko executive chairman of the multinational telecom company MTN said, asking for stronger policy certainty and regulatory environment.
“Then there’s no shortage of funds,” he said. “It all comes back to certainty.”
The President of Rwanda, Paul Kagame, acknowledged that if indeed governments put in place policies that are investment-friendly, there will be economic development.
“We have to accept the fact that the private sector holds huge resources that could be deployed together with the government for the benefit of infrastructure whether it is energy, transport, IT, telecoms and so forth. But then government has to make sure we put in place policies …that work to encourage this kind of investments and partnerships to happen,” Kagame told an audience in Davos.
According to the International Monetary Fund, Rwanda has been successful in implementing some growth-friendly policies.
“Early evidence suggests that the short term adjustment policies have been effective in addressing external imbalances,” the IMF said in a report last week.
“The government’s home-grown “Made in Rwanda” initiative, which seeks to substitute domestic production for some key imported goods, and export promotion efforts. Performance under the program has been strong, with almost all program targets set through end-June 2016 and structural reforms through end-September 2016 being achieved,” the IMF added.
Trade is exactly one of the areas that African countries need to work on. According to the IMF, “Substantial opportunities for further regional and global trade integration still lie ahead” for the entire sub-Saharan region.
“Intra-African trade is still at a dismally low percentage,” Nhleko of MTN said in Davos. “And for that to increase, I’m afraid there’s going to be a choice on how much sovereignty a certain state wants to retain ad to what extent they have a vision of making things, more, more and more boardless.”