What are the most important challenges facing private sector development in Africa?
Youth unemployment really makes me worried. When we grow as countries, we do not create as many jobs as we would like. All around the world, not only in Africa but even in the U.S., there is a lot of jobless growth. So one of the greatest challenges is how to build more jobs for young people: quality jobs. there in the pension funds, in the private sector, in equity funds. Currently, many private actors do not want to invest, especially in Africa. They are afraid it is too risky. We need the mechanisms that help with this. The 10 billion is great, but it is not doing the trick alone.
Whenever I meet young people I get excited. I feel they have got the energy, and I see their interest. Many people think that young people are disaffected, that they are all about making money, that they do not care anymore. But that is not what I am seeing. Everywhere I go around the world I see young people, men and women, thinking about finding solutions to problems. So many young people are doing exciting things that give me hope; they give me hope.
How can the DFIs help create jobs?
We need to create more quality jobs. We especially need to support young people in starting their own businesses to create jobs for themselves and others. So the DFIs need to figure out the ways and means to support entrepreneurs. We also need to figure out how to support value chain development so we can transform our goods and manufacturing. That will create more jobs as well.
The DFIs are investing more than US$10 billion a year in Sub-Saharan Africa. What steps can they take to address these challenges?
The DFIs need to play a vital role. We need to understand how that 10 billion can leverage 50 billion or 100 billion. So what we need to think about is how we use the 10 billion to de-risk investments, so we can join all that liquidity that is out
“Everywhere I go around the world I see young people, men and women, thinking about finding solutions to problems.”
DFIs should also really think about what the critical bottle necks are that need to be removed so private enterprises can thrive and be effective. For example, Africa needs massive investment in power. Maybe the DFIs need to pick infrastructure and say that we are just going to get it right. Maybe they should say that we are going to do everything possible to get electricity to work. Removing critical bottle necks with that kind of determination is essential to be effective.
The interview was conducted by on behalf of EDFI by Eivind Fjeldstad, the managing director at the Norwegian-African Business Association.