AFRICA UNION PARTNERSHIP
Africa is the most promising and gifted content of Africa. With a population of 1.25 billion, two-thirds of which is less than 35, Africa possesses the biggest development and growth potential in the world.
The challenges to harness the growth potential are enormous. It needs political will, structured and forward looking policies and robust work plan. The African Union and the African member states have worked deliberated and created a vision 2063 which gives the policy direction and work plan to actualize the full potential of the African continent.
The African countries need to prioritise focus on the core sectors: peace and security, Defence, Financial Strong place, Technology, Training, Skill Development, Education, Energy, Natural Resources, Good Medical and Health Facilities to boost their Economies. The focus needs investment vehicle.
It is here that African countries are in helpless situation. The only way to bring the necessary financial resources is either let the natural resources be exploited and exported or to borrow money, i.e. bring finance from international financial partners.
To develop the core sectors, African Governments have tried to get the finance raised, many a times on unfair terms, and get some middle and large scale projects set up. The African States had hoped that with borrowed money, these industrial projects will provide the technology, skill development, jobs and accrue benefits for the population.
This model though has not been successful. Many projects set up by the State have failed because the feasibility for the projects was misfounded and the Governments do not have the competence, where withal and human resources to operate these projects and generate business. So, many projects have become dysfunctional and Governments are finding themselves in lurch as while the projects have not generated any benefits for the country, the Governments have to bear the financial burden to service the loan and have unfortunately come under a debt trap.
Further and therefore, the International Monitory Fund (IMF) has issued directives to the African countries not allowing them to borrow more.
The only solution in this imbroglio is to bring private investment in the PPP (Public Private Partnership) model in Africa.
Private investment is no cost to the ex-chequer and positively effects the GDP growth of the country. A private investor, with his own money , ensures the most correct and best feasibility for the project and therefore it is an established fact that private investment businesses and projects are most successful.
The African economies still rely, over 95%, on the unorganized and informal sector and very small economic activity is attributed to the organized sector. The Governments therefore need to focus to micro, small and medium enterprises in the core sectors to give a boost to economic development. Private investment therefore has to be encouraged in the bottom –up approach while also for important industrialization projects in the core sectors.