AfDB calls for economic diversification

There is need to diversity African economies in order to cushion the continent from external shocks, a top AfDB official said. “Opportunities for technology acquisition and new markets presented by enhanced south-south cooperation should thus be explored,” said Dr Kamal Elkheshen, Sector Operations Vice president of the African Development Bank. He made the remarks, Thursday, during a three-day meeting in Kigali on private sector development in Africa. Elkheshen, who spoke on behalf of the AfDB President, Dr. Donald Kaberuka, said Africa’s private sector should become a cornerstone for sustainable growth.“The private sector will be critical in making the requisite investments in new areas,” he said.Elkheshen argued a case for regional integration, saying it should be given renewed momentum to eliminate tariff and non tariff barriers to trade. “In so doing, opportunities for trade and investments will no longer be constrained by size or artificial borders,” he stated.Elkheshen pointed out that today nine out of ten workers on the continent are employed by the private sector.The private sector employs 60 per cent of the working population in Africa but it contributes only 20 per cent of the GDP.Consolata Ndayishimiye, Chairperson of the East African business Council, called for facilitation of Small and Medium Enterprises (SMEs) through establishment of business incubators and infrastructure development.“We have to take advantage of SMEs potential to develop our economies, and increase revenue for our governments,” she said. Ebenezer Essoka, Chief Executive Officer of Standard, challenged SMEs to always present bankable projects. “A bank is not a charity organisation, they want profits and these SMEs should be able to present competitive projects.” Rwanda has 1,230 SMEs, majority of them with limited access to finance due to lack of collateral and capacity to prepare bankable projects, which is responsible for the high rate of business failure in the country.About 82 per cent of SME start-ups in Rwanda die in their first year of operations, according to the Ministry of Trade and Industry.

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AfDB calls for economic diversification