…catalyzing the imperatives for social and economic impacts.
The problem of the world are too big to be solved by governments and the philanthropy organizations alone. Ending poverty, solving climate change, reducing inequality or surmount barriers to exclusion demands collective efforts especially by the private sector collaboration. That’s not to say private sector companies and foundations should not try to make a dent in these problems by sharing wealth where needed. But if we are to make a meaningful difference to the great challenges of our times, we have to put our hearts, minds and talents where our money is. We have to commit to a strategy of doing well by doing what we do best to compliment the public sector’s efforts.
Though the challenging landscape of Africa’s development for that matter has necessitated an increasing emphasis on the role of Private sector in complimenting economic growth and development, it is obvious the Public sector has much advantage when it comes to easier access to finance and foreign exchange than the private sector which makes it capable to deal with all developmental deficits but no. The burden for inclusive governance and sustainable economic development with much gap is a cause which need private sector partnership and support to see the desired change.
The challenges however with the private sector obviously come through working with difficult environment where corruption is rampant, rule of law is not enforced and the lack of good infrastructure making it challenging to maintain the collaborative effort for economic development and prosperity. The private sector entrepreneurs who are recognized as the means to accelerate the rapid industrialization desired by countries are deemed to have inadequate capital and know how to push this agenda. The core dimensions and the need for public-private sector engagement for inclusive growth and economic development defines the new pathway.
How do economies entrench on its position for sustainable economic growth through social, political and economic policy enhancement? Creating the enabling environment in promoting sustainable economic growth and development through public-private partnerships would require the role of governments creating conditions or platform necessarily important to support the private sector growth and development in catalyzing this efforts. This all important role of the public sector in setting policy frameworks, laws, infrastructure support to improve the business environment and markets create value and opportunities for economic advancement and prosperity without which the private sector may not survive.
The role of the government sector in the interplay for sustainable development
As already intimated, governments are obliged and mandated for all developmental advancements in all economies be it political, social and economic. The burden is whether this mandate is holistically being achieved by any government as such? The quest for private sector involvement seeks to lift this burdensome task off the public sector, ease it so it could re-channel its efforts in other equally important commitments and engagements for the good of its citizens.
However, where it becomes so crucial for the public sector to provide services in transportation, communication research, peace and order to affect the level of productivity in the private sector is non-negotiable. Enabling the environment for private sector activities, building institutional capacities and structures, providing start-up financing support and other efforts by government in providing finance infrastructure and education grant the platform for human capital development for use by the private sector participation.
These actions place the public sector as an enabler for rapid economic growth as well as an effective competitor to the private sector. Meanwhile, through the establishment of laws to regulate private sector activities, the gains for economic transformation are seen in massive employment generation, a non- distortionary policy environment including macroeconomic stability, massive investments in basic social services and infrastructure, greater protection for the vulnerable and the prioritized protection of the environment.
The Private Sector Engagement
Becoming increasingly important as a significant part of economic growth and employment mechanism, the private sector provides goods and services, generate tax revenues for financing key social and economic infrastructure and develops new and innovative solutions helping solve development challenges.
Though inclusive growth and the path for development lay emphasis on deficits on efforts of government in development, the poor performance of public sector in creating jobs and causing economic growth has led to the shift in private sector participation in this developmental agenda. Therefore the role played by the private sector in development extends from the traditional approach supporting economic development to the establishment of more comprehensive and detailed public-private partnerships.
However, the private sector’s role is not limited to financing and investments. The capacity for introducing innovation, human resources, technical information and technological inputs are other potential contributions of the private sector.
Nonetheless, the private sector with all the potential to cause effective economic transformation is bedeviled with lack of credit facility for small and medium enterprises, inadequate infrastructure, low managerial skills, low technical levels, weak institutional regulatory framework and globalization issues confronting it. This is where the public sector’s inputs are needed to provide the incentives for sustenance and capacity boosting.
The Global Picture (Private Sector)
It is certain that, in western countries, private entrepreneurs have played an important role in economic development so much so that it is characterized as the initiator and moving force behind the industrialization process. Despite the rapid progress of the public sector in the period of planning, private sector is the dominant sector in every economy.
Having said that, governments all over the world which seek the good of its private sector entrenches on promoting economic development at a rapid pace by filling gaps in the industrial structure. It ensures the promotion of adequate infrastructural facilities for the growth of the economy, undertakes strategic economic activities in those strategically significant development areas, where private sector may distort the spirit of national objective.
The culture of checking monopolies and concentration of power in the hands of few become the pivot for promoting and balancing regional development and diversifying natural resources and other infrastructural facilities in those less developed areas of the country and these are fundamental imperatives for any economic prosperity and survival.
Describing the role of the Private sector as partner in development
The Private sector is broadly an embodiment of the organizing principle of economic activities where ownership is an important factor, where markets and competition drive economic production and where private actors (individuals, poor, rich) and businesses undertake risk activities to achieve profits and income through market exchange.
The Private sector organizations are characterized by core strategy and mission that drive it for profit. It serves as intermediary player organization(s), large, medium or small. They include individuals in both formal or informal sector entrepreneurs, financial institutions, farmers etc.
The private sector role in economic development spans urban governance and its influence in development of inclusivity and sustainable development. The sector’s impact affect poverty reduction and remain drivers of agility and conflict remedies in unemployment, exclusion and instability. As partners in development, the private sector functions as a deliverer of goods and services to satisfy economic growth and contributes to the tax revenue need of the economy through an efficient flow of capital.
The Private Sector’s contribution to inclusive growth in Africa by enlarging business opportunities to women and youth.
Women face greater challenge when it comes to gender equality. Gender violence, disruptions in access to sexual and reproductive health. The effects of the Covid pandemic equally has put women at predisposed positions which ought to be tackled by the private sector engagement. The question is how?
The private sector in addressing these issues of women concern must ensure:
-there’s equal pay, implement policies that resolve pay inequalities, guaranteed parental leave, childcare so to bridge the gender gap in the workplace. This in effect can lead to women economic empowerment and growth which is good for the economy.
-Preventing violence and sexual harassment in the workplace
-Ensuring girls and especially the women are equipped to meet the challenges of tomorrow through access to education, job opportunities in STEM (Science, Tech, Engineering and Maths)
-Providing affordable start-up financing support to women and the rural folks for agricultural ventures.
-Building institutional capacities and structures to promote fairness.
Promising features of private sector engagement in inclusive and sustainable growth
The private sector role in inclusive growth is without question. The express involvement by the private sector in business-led initiatives in research and development partnerships, knowledge sharing platforms, technology and skills transfer, infrastructure investment are all great contributions areas that have potential to kick start development, enable productivity gains, generate quality jobs, strengthen skills and promote technological advances.
Obviously, with the provision of great incentives put in place to stimulate investment growth, the formulation of policies for conducive working environment, the Private sector act as agent of change and potential partner for implementing SDG’s.
The role of the private sector in the coming decade to foster prosperity and sustainable growth?
If the coming decade would experience economic prosperity and growth for any economy, the private sector ought to align all its business strategies around the SDG’s and galvanize creative actions leading to the change and development it anticipates. It ought to again address humanitarian concerns of violations of job rights and freedom, ensure proper due diligence throughout its supply chains, have effective stakeholder engagement and the protection of the environment. To continue to build and expand education, enhance skills development and to ensure an increasing productivity and the attraction of investment, the creation of better jobs for all with an enhanced better working conditions and services, the private sector again expects to receive massive support and boosting from the public sector as a means for consolidating and catalyzing the public sector efforts.
Frank Anim is the CEO and Strategic Partner of AQUABEV Investment and Discovery Consulting Group.
Dr. Obuobi is the Lead Consultant on Cx. Leadership & SME, Country Chair, Ladies in Business).