‘Government must get out of the way’ – Standard Bank chair says African govts fail on basics

[Nat Quinn]

Standard Bank’s chairperson says African governments should get out of the way and allow the private sector to “lead” in their economies.

Nonkululeko Nyembezi, a former chairperson of the JSE board, told the World Economic Forum (WEF) in Davos, Switzerland, that many of these governments have reached the “absolute limit” of their capacity to be able to fix their countries and grow their economies.

She said it was time for a private sector-led economic growth path.

“I honestly cannot see how we can accelerate African growth without that. It’s one thing to think about crowding in the private sector, but that’s not actually what I am talking about. I am talking about the private sector that leads this time around,” she said.

Nyembezi said the time for unhelpful ideologies and the “20th-century concept” that government cannot trust the private sector has long passed. She said that government and corporate executives meet yearly at conferences like the WEF, talk about reigniting African economies, and then go back home and do nothing about it.

Even when it comes to leading and funding development projects, where many believed that only government could drive it, that “experiment has not yielded any hope or benefit”.

“Perhaps what I’m saying is, government get out of the way,” she added.

African Continental Free Trade Area is a case in point

Nyembezi made an example with the African Continental Free Trade Area (AfCFTA) agreement. She said she greatly supported it, and many businesses felt the same. She conceded that it was difficult in real life to bring these trade agreements to life, but it could have been better if there had been more private sector involvement.

“We are not making a huge amount of progress. And it is in my mind because there was this divergence between the public sector that went into the room to negotiate things and then said, here it is, off you go, folks. Now there’s a scramble to try to see how we make this thing work,” said Nyembezi.

She said that had the African governments gone into it together with the private sector from the start, it might have been a different story,” she said.

Responding to Nyembezi, the Governor of the Central Bank of Kenya, Patrick Njoroge, said if the public sector set the rules and stuck to them, it would make a difference. But he has a problem with the concept of governments negotiating with the private sector on how to move forward.

“There’s a private sector – a portion [of it] – that loves getting concessions, etc. They all come [with promises of] more employment, etc. I think we all have many cautionary tales like that,” he said.

The governor said his assessment of the AfCFTA was less dire than Nyembezi’s, or those of some other private sector players.

“It is true that on the surface, we haven’t seen that much trade. But there has been a lot of work that has been done, in a sense preparing the ground,” he added.

But Nyembezi said there’s still a need to rethink how governments work with the private sector. Furthermore, African governments need to start doing the basics.

“We need a better quality of governance across the continent. If governments just did one thing – governed better – we would probably take two steps, three steps forward,” she said.

Her other wish, she added, is for less talk about corruption and more action against it.

 

• Standard Bank chairperson Nonkululeko Nyembezi slammed African governments for not doing the basics at this year’s World Economic Forum.
• She says if they’d just done their job of governing better, Africa would be much further ahead than it is.
• Nyembezi believes it’s now time for the private sector to lead growth in the continent.

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