That money can be funneled back into the development of the continent thereby reducing the need for outside funding.
Debt cancellation and a significant rise in official development aid, though helpful, cannot simply put right Africa's deep-seated problems. The commission report emphasizes that ultimate prosperity depends on robust private investment-led growth. Sir Mark Moody-Stuart, chairman of Anglo-American, said at the G8 Business Summit in London: "There will only be sustainable development in Africa if the increase in government aid flows is complemented by a resurgence of enterprise (Small, 2005)." Echoing similar views, Arun Sarin, chief executive of Vodafone Group, remarked: "The ultimate aim of policymakers must be to create the conditions for private enterprise to make poverty history in Africa," and "A thriving business sector, led by capable and highly motivated African entrepreneurs, will lie at the heart of spurring economic growth and reducing poverty (Small, 2005)."
This is another aspect of Africa that the world seems to be ignoring and part of it has to do with the fact that it will involve the voluntary efforts of private industries worldwide. This again is not going to help line the pockets of those who will put out the effort therefore there is very little incentive for making the effort to help.
Unlike other emerging-market regions, Africa is distinctly heterogeneous in terms of private sector development. SMEs remain scarce -- the 2005 African Economic Outlook report, published by the OECD Development Centre and the African Development Bank (AfDB), described them as "the missing middle." With few exceptions, the private sector in Africa is dominated by micro-scale, informal firms where millions of people earn their livelihoods as small farmers, street vendors and in a range of other occupations. Even in South Africa, the continent's most sophisticated economy, micro and very small enterprises accounted for more than one-half of total employment and one-fifth of economic output in 2003. In countries like Angola, Congo (DR) and Rwanda, the tiny private sector comprises almost entirely informal companies and formal finance is non-existent. Among oil-producing countries, such as Chad, Congo, Equatorial Guinea or Gabon, a lack of government support and the predominance of the oil industry have hindered the emergence of a private non-oil sector. Thus, enterprises tend to concentrate in the tertiary sector, eg services/commerce such as bakeries and pharmacies in Gabon.
In the Congo, around four-fifths of enterprises employ less than five people and for 2,100 enterprises registered in the formal sector, there are 10,000 informal ones, according to the AfDB/OECD report (Small, 2005). "
The problems with improving the small business industry in Africa are cost prohibitive which is another reason the world ignores the problems of the continent.
To create an environment that is conducive to small business growth in Africa the deficient public utility system will have to be improved. There is a power system there that is unpredictable at best and erratic most of the time. The continent has an unpredictable business environment because of the insecure rights to property and the contract enforcement difficulties as the laws are not yet clearly defined or enforceable. In addition there is corruption throughout the continent that prevents the ability to develop a small business sector that is professional, successful and accepted in the world.
Even if all of these things could be rectified there is a banking issue in which the financial institutions are not up to a standard...
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