Why is private sector development such a low priority in Sub-Saharan Africa?


I will start my post by linking to another blog from Kenya. The blogger makes reference to a report by Robert Wade, professor of political economy and development at the London School of Economics, which discusses the role of industrial policy in Asia and how donors completely neglected it in Africa. In essence, Prof Wade compared the economic development activities of donors in Asia with development efforts in Africa.

I can’t help but wonder why industrial development is such a low priority for Africa.

Although donors generally respond to the demands from their developing country counterparts, I know from experience that donors also have preferential aid packages. But why is private sector development such a low priority? Why are we not seeing the same kind of productive infrastructure and technology transfer into Africa that we saw go into Asia? Even donors with “Sustainable Economic Development” Programmes are more concerned with rural development, gender and limited agri-processing support. What about building new industries, new processing facilities, new productive capacity in Africa? Instead the focus as at a micro level, and perhaps at some regional level.

Please don’t tell me it is because the enabling environment is not right. When it suited Western countries they invested in autocratic countries with very poor human rights track records.  Billions of dollars went (and still go) into countries without an enabling business environment. Most countries in Africa today are at a better governance standing than their Asian counterparts were in the 1980s-1990s.

Just thinking out loud. What can we do to make industrial development more important in Sub-Saharan Africa?

3 Responses to “Why is private sector development such a low priority in Sub-Saharan Africa?”

  1. valerie Says:

    I don’t know the answer but very interesting point.

    Like

  2. Evelyn Masotja Says:

    My take is, African countries are not homogenous. Yes, many African countries lag significantly in this regard, but are there no pockets of attempts if not excellence? South Africa is doing something about industrialisation through its policies, financial support and other programmes. Manufacturing is receiving more and more attention in crucial growth sectors. African countries have multiple competing challenges. In the midst of those, industrialisation may be a sophisticated concept and practice far from their radar. Private sector development is crucial to economic development in Africa. I agree, and it needs better attention and prioritisation!

    Like

  3. Jozef Says:

    My take is that most sub-saharan governments don’t prioritise and support industrial development like the East Asian governements did. Indeed enabling envt, but then the one of infrastructure, power, investment support, export promotion….
    I think you vest too much power in donors and international campaigns about human rights. If only.

    Like


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