Statement Delivered

by

Albert M. Muchanga

Commissioner for Economic Development Trade Tourism Industry and Minerals

At the

Fiftneeth African Union Private Sector Forum

Held in

Lusaka Zambia

On

31^st October 2024

 

Honorable Chipoka Mulenga, MP, Minister of Commerce, Trade and Industry of the Republic of Zambia

 

President of the African Business Council

 

Commercial Counsellor, Embassy of Turkiye 

 

Members of the Private Sector and other Distinguished Delegates

 

Ladies and Gentlemen

 

I great each and every one of you.

 

We are happy to be in Lusaka.

We record our immense gratitude to the people and government of the Republic of Zambia for the warm welcome and hospitality accorded to us since our arrival.

 

We are living in the era of climate change.

 

Every country and every individual is affected by climate change.

 

Although Africa accounts for less than 4% of carbon emissions, we are among those who suffer the most from the climate change related factors of flooding, droughts, heat waves, poor water quality, low agricultural yields and among others, energy supply shortages.

 

To mitigate and adapt to climate change, all of us have to embark on the green transition.

 

The private sector has a critical role to play as a source of innovation and investments in the green transition.

 

Africa is also a young and growing continent. 

We need to generate a minimum of 14 million decent jobs annually for our young Africans.

 

Again we look to the private sector to generate the jobs, failure which the already large informal sector will keep growing.

 

Africa also has a huge burden of poverty.

 

To overcome this, we need to grow our economies at 7-10% per annum in the next thirty to fifty years. 

 

The World Bank goes further by stating that most low-income economies, and the majority of them are in Africa, must generate Growth Domestic Product per capita of 9% each and every year to end extreme poverty.

A question to be asked is how many of our Finance Ministers look at this figure of gross domestic product or gross national income per capita when they present the annual national budgets.

 

We are also currently in the era of low growth huge debts and net outflows of financial resources from developing to developed countries.

 

And for all middle-income economies, what they also face is the middle-income trap. They need growth rates of 5% per annum to break the trap and move towards upper middle or high income countries.

 

The task ahead is hence enormous.  It is made more challenging given that getting new loans will be both difficult and expensive in this era of low growth and high debts.

 

This notwithstanding, we teamed up with the African Development Bank and AUDA-NEPAD in 2021 to formulate a strategic framework on key actions to achieve inclusive growth and sustainable development. This will be presented to the Assembly of the Heads of State and Government in February 2025.

The strategic framework is anchored on achieving and sustaining growth rates of 7-10% per annum in the next thirty to fifty years and raising investments to 40% of the Gross Domestic Product of each African country.

The World Bank also advises that to address the challenges of climate change and meet the United Nations Sustainable Development Goals, US$2.4 trillion will be required as investments annually between now and 2023.

Where will the money come from? Partly from the private sector.

The Africa Wealth Report 2024 shows that 135,200 Africans hold investible wealth of US$2.5 trillion.

The publication further goes to show that Africa’s millionaires will grow by 65% in the coming decade.

But capital is a coward. It will not go where there is no growth, notwithstanding the fact that investors and entrepreneurs are risk takers.

Since we need capital to induce high levels of growth and high levels of growth are required to attract capital, the task at hand is create the right conditions for the investible wealth of Africans to be translated into investments as well as make it possible for the Africans who moved out of the continent with their capital to come back and invest it in the continent.

This will in turn attract large inflows of foreign investments.

This is where the African Business Council comes in.

We would like you to bring together, African policy makers and African investors to dialogue on how to make Africa more attractive to invest in.

In the dialogue, there is need, among others, to examine how the regulatory frameworks across the continent hinder investments in Africa.

Equally important are questions of policy consistency, energy poverty, insecurity, poor quality of education, illicit financial flows from Africa, under-valuation of our carbon sinks, limited capital market development, and, among others, corruption.

Your work has been made easy in the sense that I have talked to the President and Chairman of the Board of Directors of the African Export Import Bank over this issue and he and his team are willing to assist in organizing this dialogue on the margins of the 2025 Assembly of African Union Heads of State and Government.

So, come forward, let us work together to prepare for the side event.

Let me make six points before I end,

First, I invite all of us to imagine the possibility of transforming our informal sector into formal micro, small and medium enterprises.

If we transformed this imagination into reality, there would be critical positive spill overs like broader tax base, increased entrepreneurship, innovation and of course, growth.

I invite you to come up with suggestions on how to formalize Africa’s growing informal sector.

Second, I make a special welcome and congratulate our FinTech enterprises that are now unicorns. They are eight all together.

This is an indicator that African start-ups have potential to grow and are growing.  I challenge others to follow suit.

I am sure we will see more of the potential during the pitching session.

The task ahead is to see how we can make them grow faster.

Third, and this aimed at Micro, Small and Medium Enterprises and Start-Ups, develop programmes of making savings from your business operations.  This will enable you to buy and infuse technologies, and later, invest in research and development, both of which are critical to the growth of your businesses.

Fourth, African policy makers are creating a large market space for the private sector as evidenced by the start of trading in the African Continental Free Trade Area, operationalization of the African Credit Rating Agency, the African Trade Observatory, the African Virtual Investment Platform, Made in Africa certification scheme, African Inclusive Markets Excellence Centre, African definition of Micro Small and Medium Enterprises, African Model Start-Up Law, and among others, promotion of macroeconomic convergence.

We need increased investments to leverage this large market space and nascent consumption hub.  So, I call on the private sector to invest more in thus market.

Fifth, Since the African Union is now a permanent member of the G20, I encourage the African private sector to actively participate in Business 20 (B20).  This is the engagement platform of the private sector in the G20.

Networking at that level will give you additional insights in the development of your respective businesses.

I end by saying it is my hope that what I have said above can contribute to unlocking opportunities for business growth in Africa.

My sixth and last point is that the era of Official Development Assistance (ODA) is coming to an end.  Some partners already talk of a post ODA era.

This challenge calls for enhance partnership between the African Government and the African Private sector.  The two should develop a common perspective on creating conditions for Private Sector Investments.

In addition, Tax Administration and elimination of Illicit Financial Flow in Africa should be enhanced.  Individual and cooperate savings also needs to be enhanced.

Furthermore, we need to remove overraps in regional economic integration and trade deflection in continental economical integration by rapidly removing Africa towards a Customs Union/Common Market.

I end by saying it is my hope that what I have said above can contribute to unlocking opportunities for business growth in Africa, based on accelerating intra-African trade and investment.

I end here and wish ourselves fruitful deliberations.