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Private Sector Development in Sub-Saharan Afrika

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Private Sector Development in Sub-Saharan Afrika

Open access

Rechten:Alle rechten voorbehouden

Samenvatting

Sub-Saharan Africa (SSA) is an underdeveloped region, but had seen significant economic growth before the global financial crisis. Due to the crisis economic growth has stopped or even decreased. In addition, several other aspects are expected to become worse, such as incomes, child mortality and access to water. To create prosperity by economic growth private sector development is needed. After the
failure of the state-owned enterprises in the former colonial states, privatization became increasingly important. Two approaches are seen as important backgrounds of the thinking around private sector development: the neoclassical and the neo-structural approach. The latter approach follows the idea, in contrast to the neoclassical approach, that governments have to interfere when they see that the situation of the market is worsening. There are various theories about how to develop the private sector. The most recent theories concerning this subject are developed by: the United Nations by the Millennium Development Goals; Dambisa Moyo who argues that aid must
be stopped, Jeffrey Sachs who wants to end poverty by 2025 due to individual treatment of states, Prahalad by investing in the bottom of the theory, and Hernando de Soto by giving the poor their property rights. Research into the situation of the private sector in developing countries and developed countries is conducted by various organisations, such as the World Bank, the International Monetary Fund and the World Economic Forum. Small and medium enterprise (SME) development in SSA arose during the 1980s due to the poor economic situation worldwide which caused an increase in the number of SMEs in Africa. There are differing opinions regarding small and medium size enterprise development. There is the so-called pro-SME view and a sceptical SME view. Clearly, the advocates of the pro-SME view believe that SME development is needed, because SSA's economy needs a developed SME sector to create, for example, employment. The sceptical SME view approaches private sector development from the side of the large enterprises, which do not understand the necessity of the use of smaller enterprises to create economic growth. Entrepreneurs of SMEs in the region have to deal with several constraints to their businesses. These are governmental and financial issues, lack of electricity and infrastructure. Both men and women face these constraints. Yet, women entrepreneurs defy even more constraints when starting a business in the SME sector: inequality
issues, lack of access to education and healthcare, lack of cultural acceptance, financial issues and constraints to expand a micro-enterprise into a SME. The problems for both men and women entrepreneurs in the SME sector are clear. However, there is not one unburdened solution to their problems. There are theories which claim they can solve all manner of problems in the private sector in SSA. Clearly, a solution must be found for the governmental, financial and infrastructural problem in SSA. Yet, nobody knows what will eventually work for SMEs in this region.

Toon meer
OrganisatieDe Haagse Hogeschool
OpleidingESC Hogere Europeses Beroepen Opleiding
AfdelingAcademie voor European Studies & Communication
Jaar2009
TypeBachelor
TaalEngels

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