"To reach the MDGs, the primary responsibility for most African businesses must be commercial success" by William Kalema
Over recent years, I have witnessed first hand the profound shift in the relationship between government and business. This is to be welcomed, because for Africa’s current economic growth to be sustained, it is increasingly clear that business needs to be more involved in economic planning and development. For example, the recent power shortages in South Africa and in Nigeria, a country abundant in oil, underline the economic consequences of an inadequately planned and managed infrastructure. Business simply cannot wait for governments to figure out how to fix the region’s infrastructure deficiencies – it has to be part of the solution.
In a more pluralistic environment, Governments are also recognising the growing political importance of nurturing strong private sector-led growth, which creates jobs, enables wealth creation and provides revenues that can be reinvested in public goods, like health and education. But for this to be sustained, a greater emphasis needs to be placed on creating a more business friendly environment, supported by an effectively regulated institutional framework and reinforced by properly functioning government institutions.
A great deal of progress has been made in Africa, but this is also the case in many other parts of the world. Many other developing regions are becoming increasingly economically competitive and business friendly. We therefore need to accelerate progress, not only to close the global competitiveness gap, but also to enable business to play a broader role in driving growth and, in the process, tackle the MDGs.
How can business best contribute to development and poverty alleviation? As this report shows, multinational companies have a crucial role to play in creating supply chain linkages, by creating jobs through their core businesses, providing training and building business capacity. Also, although not replacing the need for government action, social investment and philanthropic approaches, built around public-private partnerships, are playing an increasingly important role.
But the truth is, for the 95 per cent of African businesses which are small and medium sized, this type of approach is simply not an option. The reality is that most African businesses are not organised and resourced to contribute to poverty alleviation in direct ways. Rather, in a constrained and challenging business environment, their priority must be to grow, to create jobs, and become more competitive through greater efficiency and innovation. By strengthening their vertical and horizontal linkages with other firms, they will be able to serve domestic, regional, and even global markets.
So as we look at the challenge of reaching the MDGs, the primary responsibility for the majority of African businesses must be to become more successful businesses and Governments need to create the right conditions to enable this to happen.
William Kalema is a Uganda-based entrepreneur, corporate leader, and consultant. He was a member of the Commission for Africa
In a more pluralistic environment, Governments are also recognising the growing political importance of nurturing strong private sector-led growth, which creates jobs, enables wealth creation and provides revenues that can be reinvested in public goods, like health and education. But for this to be sustained, a greater emphasis needs to be placed on creating a more business friendly environment, supported by an effectively regulated institutional framework and reinforced by properly functioning government institutions.
A great deal of progress has been made in Africa, but this is also the case in many other parts of the world. Many other developing regions are becoming increasingly economically competitive and business friendly. We therefore need to accelerate progress, not only to close the global competitiveness gap, but also to enable business to play a broader role in driving growth and, in the process, tackle the MDGs.
How can business best contribute to development and poverty alleviation? As this report shows, multinational companies have a crucial role to play in creating supply chain linkages, by creating jobs through their core businesses, providing training and building business capacity. Also, although not replacing the need for government action, social investment and philanthropic approaches, built around public-private partnerships, are playing an increasingly important role.
But the truth is, for the 95 per cent of African businesses which are small and medium sized, this type of approach is simply not an option. The reality is that most African businesses are not organised and resourced to contribute to poverty alleviation in direct ways. Rather, in a constrained and challenging business environment, their priority must be to grow, to create jobs, and become more competitive through greater efficiency and innovation. By strengthening their vertical and horizontal linkages with other firms, they will be able to serve domestic, regional, and even global markets.
So as we look at the challenge of reaching the MDGs, the primary responsibility for the majority of African businesses must be to become more successful businesses and Governments need to create the right conditions to enable this to happen.
William Kalema is a Uganda-based entrepreneur, corporate leader, and consultant. He was a member of the Commission for Africa
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BAA MDGs report WEB.pdf, 1.3 MB
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