Private sector looks beyond elections to growth of the economy

In Kenya, the private sector drives the economic sector by over 70 per cent. [File, Standard]

The growth in the private sector has also continued to be vital in financing the future of development in Africa.

When the private sector is dynamic, it allows domestic revenues to achieve considerable growth, ultimately minimizing dependence on foreign aid. The combined domestic revenues in the African continent are currently over ten times the aid flow value in Africa.

Africa has attained huge progress in enhancing the business regulatory environment together with increasing competition, and trade investment in the last decades.

Some of the major strong performers are countries such as Algeria, Morocco, Ghana, Mali, and Burkina Faso. Moreover, the competitiveness of African countries has also improved even though it commenced from a low base.

Only three African countries have featured in the top half of the global rankings with regard to competitiveness. They are Mauritius, Tunisia, and South Africa. Numerous countries in Africa have started to improve their overall positions in the last decades.

The major constraint to private sector development in Africa is the ease of access to finance for development. Most companies and small-scale enterprises struggle to get finance on suitable terms. Nonetheless, there have been encouraging signs.

Over the years, there have been crucial access to financial services providers, together with micro-finance institutions. Traditionally, the private sector in Africa has been drawn back by several factors such as education systems that do not offer essential needs of the labour market and insufficient infrastructure.

However, with the increased penetration of the private sectors in African countries, it is time to attain maximum economic growth in different sectors.

The role of the private sector in East Africa

The private sector has an important role to play in enhancing regional integration in East Africa. It enhances trade among the East African countries because private sectors understand the constraints that enterprises face, and have the capacity to utilize the advantages of the opportunities created by such regional trade initiatives.

The private sector is important in enabling access to increased economies of scale, raw materials and technology in both global and regional value chains.

Therefore, the private sector plays a vital role in boosting Eastern Africa's manufactured exports, mainly textile and clothing exports, heavy manufacturing, processed food and livestock, and meat products. It is also important in increasing trade among the East African economies and thus improving the overall GDP and exports.

The private sector is thus the key driver of the East African economy because it accounts for 80 percent of the overall production, 60 percent of the investments, and 75 percent of the lending within the East African economy. The private sector is also important in job creation, offering about 90 percent of the job opportunities for the working-age population.

The role of the private sector in Kenya

The Kenya private sector has substantially contributed to the process of economic development over the years. The sector contributes to 80 percent of the overall GDP, a significant percentage of the total export earnings and employment.

The primary growth sectors are restaurants and hotels, trade, real estate, insurance, finance, manufacturing, Agriculture, transport, storage, and communications.

Even though the sector has experienced a lot of internal and external shocks, it has remained resilient and has contributed to export market diversification and many export products. The role of the private sector is not only restricted to investment and financing. Human resources, innovative capacities, and technological inputs are other potential contributions.

The private sector drives the economic sector by over 70 percent in development, driving sustainability, employment, and economic growth by bringing numerous opportunities for value creation.

Moreover, attaining sustainable development will enhance the building of markets and the business environment. Billions of dollars in both private and public funds are to be channeled towards the SDGs, thus creating huge opportunities for companies to offer solutions.

Kenya, is thus, by far poised to benefit from private sector investments and partnerships.

-The Writer is a Business Leader and Brand Africa Trustee