Private Sector Development, Privatization, and Industrial Policy
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Publication
Creating Markets in Kenya: Unleashing Private Sector Dynamism to Achieve Full Potential
(International Finance Corporation, Washington, DC, 2019-07-31)Kenya has the opportunities and resources to stimulate sustainable economic growth and development, but its potential has been constrained by under-investment and low firm-level productivity. Altogether, its development has not been sufficiently sustainable or equitable to transform the lives of ordinary citizens. Poverty remains high, with thirty-six percent of Kenyans living under the national poverty line, whereas the richest ten percent of the population receive forty percent of the nation’s income. This country private sector diagnostic (CPSD) sheds light on how the private sector can more effectively contribute to advancing the country’s developmental goals. Applying a sectoral lens, it puts forward operational recommendations highlighting strategic entry points for diversification and growth and addresses key constraints to private sector engagement. It also seeks to inform World Bank and IFC strategies, paving the way for joint programming to create markets and unlock private sector potential. -
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Creating Markets in Burkina Faso: Growing Burkina Faso’s Private Sector and Harnessing it to Bolster Economic Resilience
(International Finance Corporation, Washington, DC, 2019-07-01)A small landlocked economy in the heart of West Africa’s French-speaking Sahel, Burkina Faso is characterized by its modest economic size, with a rapid population growth, with one of the highest per capita birth rates in the world. Burkina Faso needs to create 300,000 jobs annually to match its demographic growth, while about ninety percent of its workers are in the informal sector. Despite sustained robust economic growth over the past two decades driven by cotton and gold exports, private investment is low. Compounding the considerable development challenges that it faces, Burkina Faso is currently confronted by acute security and climatic threats, together with emerging fiscal risks. This country private sector diagnostic (CPSD) therefore investigates whether opportunities exist for the private sector to contribute more substantially to Burkina Faso’s development. The CPSD proposes a platform for action aimed at boosting Burkina Faso’s development through greater private sector investment. The remainder of the report provides an overview of: (i) the private sector environment; (ii) the cross-cutting constraints to the private sector; (iii) the critical enabling sector bottlenecks to the private sector; (iv) the opportunities for the private sector; and (v) a series of priority private sector focused recommendations. -
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Creating Markets in Angola: Opportunities for Development Through the Private Sector
(International Finance Corporation, Washington, DC, 2019-04-01)This Country Private Sector Diagnostic (CPSD) identifies opportunities to stimulate sustainable economic growth and development by harnessing the power of the private sector in Angola. Applying a sectoral lens, it leverages the private sector’s knowledge and experience to accelerate transformational investment. It also puts forward operational recommendations highlighting strategic entry points for diversification and growth, while addressing key constraints to private sector engagement. The CPSD discusses implementation principles inspired by international good practices. It informs World Bank and IFC strategies, paving the way for joint programming to create markets and unlock private sector potential. -
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Creating Markets in Ethiopia: Sustaining Progress Towards Industrialization
(International Finance Corporation, Washington, DC, 2019-03-20)Ethiopia has made impressive strides along its developmental path. Job creation is now the critical development challenge, raising the importance of the private sector agenda. After more than a decade of sustained public sector-led growth, the government is revising its growth strategy to allow for a much greater role for the private sector in driving growth and job creation. Broadening the base for job creation beyond light manufacturing toward a wider range of high productivity agricultural and services activities will help to overcome the uneven spatial distribution of manufacturing jobs across the country. Ethiopia has a number of advantages that it can leverage to attract the investment needed for job creation. These include rapidly improving transport and energy infrastructure, low labor costs, a large and growing domestic market, cheap power, an ideal climate, and preferential market access to the European Union, the United States, and other major markets. The purpose of the Ethiopia country private sector diagnostic (CPSD) is to support the transition to a private sector- driven growth model that advances the country’s development objectives and, in particular, delivers the necessary jobs. It identifies investment opportunities that can materialize in the short term, and the reforms that are needed to enable these opportunities to emerge. It also discusses how specific actions by the public sector, in collaboration with the private sector, in filling gaps in public investment, reforming business regulations and trade policy, addressing market failures, and enhancing the efficiency of key backbone services and sectors, while tackling gender inequalities, can fully unleash the potential of private sector investment. -
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Creating Markets in Rwanda: Transforming for the Jobs of Tomorrow
(International Finance Corporation, Washington, DC, 2019-03)Rwanda has made unsurmountable strides along its development path. Rwanda has placed among the world’s fastest-growing economies, climbing the development ladder from second-poorest in the world in 1994 to sit ahead of nineteen other countries. Today, job creation lies at the heart of Rwanda’s development challenge. The government of Rwanda (GoR) recognizes the urgency of creating new jobs. The new thirty-year Vision for the period up to 2050, which is currently being finalized, elaborates the country’s long-term development goals. The core of transformation for prosperity is developing high-value and competitive sectors, to transition the population and economy from subsistence agriculture toward industry and high-skilled services. The purpose of the Rwanda country privates sector diagnostic (CPSD) is to identify market opportunities and constraints in sectors that advance the country’s development objectives. By assessing the landscape of private sector investment in the country, the CPSD identifies specific constraints to private sector investment and productivity growth, concrete opportunities that could materialize in the short term, and the reforms that will enable this materialization. It then discusses how specific actions by the public sector in collaboration with the private sector by filling gaps in public investment, reforming regulations, and addressing market failures could unleash sectors’ private investment potential. -
Publication
Creating Markets in Ghana: Country Private Sector Diagnostic
(World Bank, Washington, DC, 2017-11)The objective of the Ghana Country Private Sector Diagnostic (CPSD) is to identify the main opportunities for the private sector that will have a strong development impact in Ghana and to highlight the key constraints (both cross-cutting and sector-specific) hampering private sector growth. The CPSD consists of a systematic assessment of all of Ghana’s economic sectors along two dimensions: (a) desirability: how private investments in these sectors could help Ghana to address its development challenges; and (b) expected feasibility: how the constraints standing in the way could be removed. This sector scan led to identification seven priority sectors, of which, three were selected to conduct deep dive studies: namely agribusiness, ICT and education.Four main opportunities exist for the private sector to make a major contribution by creating markets in Ghana. First, the private sector can help to develop new high-value export markets, such as horticulture and ICT-enabled services, in which Ghana is already well positioned. Second, the private sector can leverage ICT to improve the performance of Ghana’s most important sectors, including for improving government activities and services. Third, the private sector can help to promote efficiency and innovation in the key social sectors of education and health. Fourth, the private sector can play an important role in helping to address the main cross-cutting constraints, such as facilitating trade, providing competitive green energy, opening rural land markets, developing technical skills, and financing promising small and medium enterprises (SMEs).There are fewer opportunities for transformative private sector investments in the other sectors (mining, tourism, retail, construction, water and sanitation, and manufacturing).Ghana can seize these opportunities through a mix of public and private interventions:The government should pursue essential economic reforms to resolve the energy crisis by reforming the regulatory framework for electricity tariffs; facilitating trade, through customs reforms and the Ghana Community Network Systems;These reforms would pave the way for the private sector to invest in projects with a high development impact, including through large firms. Such opportunities already exist in Ghana in the three priority sectors of ICT, agribusiness and education that are reviewed in this report.The government should also consider supporting the entry of ‘pioneer’ investors, which are often in the form of foreign direct investment (FDI).Supporting promising SMEs will also be critical, especially during their acceleration phase.This could be achieved through a combination of public financing and capacity building, technical support adapted to the sector in which they operate, and risk-sharing and mezzanine finance facilities. Similar to the pioneer investors, such support should be provided in an inclusive, transparent and competitive manner. Examples of promising SMEs were found in all three deep-dive sectors. -
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Shifting Kenya's Private Sector into Higher Gear: A Trade and Competitiveness Agenda
(World Bank, Washington, DC, 2016-04-01)Shifting Kenya’s private sector into higher gear: a trade and competitiveness agenda’ was born out of the World Bank’s Trade and Competitiveness (T&C) Global Practice recent stock taking of its work in Kenya. This was part of a Programmatic Approach that aimed to organize T&C’s knowledge, advisory, and convening services to address Kenya’s development challenges in the private sector space. By Sub-Saharan African standards, Kenya has a large private sector, which accounts for around 70 percent of total formal employment. As a result, the dynamics of the private sector are a key determinant of the trajectory of the Kenyan economy. The country’s product market regulations a restrictive for domestic competitors and foreign entrants, and the actions of cartels and behavior of dominant firms across sectors undermines competition and hurts consumers. The Kenyan Government recognizes these challenges and has invested significantly in unlocking these bottlenecks with impressive results so far and several important laws passed. Additional efforts to ease regulatory constraints and expedite important legislative changes could improve the investment climate at national and county levels. -
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Sierra Leone Growth Pole Diagnostic : The Growth Poles Program
(Washington, DC, 2013-08)This First Phase Report on Sierra Leone growth poles is the result of a 9 months consultative process led by the Office of the President which specifically requested that the output of this diagnostic be in an engaging format. The fundamental concept of growth poles is that they exploit agglomeration economies and spillover effects to spread resulting prosperity from the core of the pole to the periphery. At the basis of this theory is the assumption that economic development is not uniform over a region. Rather, it concentrates around a geographic feature or economic hub. In particular, it frequently concentrates around a key industry, around which linked industries develop. A growth pole can be used to nurture direct and indirect linkages from the flagship industry to supporting sectors, which vastly expands the employment generation potential of new investments in said flagship industry. The expansion of this key industry implies the expansion of output, employment, related investments, as well as new technologies and new industrial sectors. -
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Zambia - More Jobs and Prosperity in Zambia : What Would it Take? Based on the Jobs and Prosperity : Building Zambia’s Competitiveness Program
(World Bank, 2011-06-01)While Zambia's economy performs well, in macroeconomic terms, low levels of productivity plague industry, and this constrains growth, diversification and prosperity. In recent years, economic growth has averaged 5-6 percent a year, business reforms are being implemented, and investment levels are at an all time high. However, according to the World Economic Forum's global competitiveness index 2010-2011, Zambia is not a competitive place in which to do business (ranking 115th out of 139 countries). Not surprisingly, business productivity tends to be low, and few Zambian industries are internationally competitive. Formal employment is shrinking and rural poverty is increasing. In summary, there is an urgent need to increase productivity, growth and employment. These questions continue to preoccupy policy makers, businesses and civil society especially in light of government's strategy to embrace private sector-led growth and facilitate competitiveness and diversification. The Jobs and Prosperity: Building Zambia's Competitiveness (JPC) Program is an effort to answer these questions and, at the same time, to achieve some concrete results that improve industry productivity and competitiveness. The Zambian government, with support from donors, has, for a long time, been trying to raise prosperity by encouraging more productive businesses, more competitive and diverse industries, and greater employment. Yet these efforts have not generated the results sought. The goal of the JPC Program is to achieve some meaningful progress towards improving industry productivity and competitiveness. The Program focuses on four industries so as to build traction and keep the scope of work manageable. The industries were selected by a group of Zambian stakeholders. The Program facilitated a process through which Zambian stakeholders identified some narrowly defined target results that, if achieved, could help these industries become more productive and then supports initiatives to achieve these results. -
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Zambia - What Would it Take for Zambia’s Copper Mining Industry to Achieve Its Potential?
(World Bank, 2011-06-01)This report is part of a series produced by the World Bank's Africa Finance and Private Sector Development Unit (AFTFP). This report explores the potential contribution that the copper mining industry could make to jobs and prosperity in Zambia, and what it will take to achieve this potential. Copper has for many years played an important role in Zambia's economy, and the performance of the economy has followed the fortunes of copper mining closely. This report investigates the role copper mining could play in achieving the government's objectives of increasing economic growth and jobs in the future. Although 40 percent of the country has not been geologically surveyed, Zambia is recognized by the international mining industry as having good mineral potential. Zambia possesses 6 percent of known world copper reserves. According to the highly-respected Fraser Institute survey of mining and exploration companies, Zambia ranks 26th out of 79 jurisdictions worldwide for mineral potential. In Africa, only the Democratic Republic of Congo (DRC) and Burkina Faso have appreciably higher mineral potential scores.