UNCTAD urges FG to support private sector

on   /   in Business 12:30 am   /   Comments

By BARTHOLOMEW MADUKWE

The United Nations Conference on Trade and Development, UNCTAD, has urged the Federal Government to increase support to the private sector while trying to reduce trade barriers between other African countries.

Launching its 2013 report on Economic Development in Africa subtitled “Intra-African Trade: Unleashing Private Sector Dynamism” UNCTAD warned that failure to increase support to private sector would make foreign firms benefit more from the streamlined trading system than indigenous firms.

UNCTAD added: “The report argues that although the elimination of trade barriers is important, it will not have the desired impact if it is not complimented by efforts by governments to increase the variety and sophistication of the goods that their economies produce, the process that economists call expanding productive capacity.”

According to the report, it is important that Federal Government upgrades infrastructure, improve the skills of domestic workforce, encourage and enable entrepreneurship, and increase the size of existing manufacturing firms so that they can satisfy larger markets and produce their goods with greater economies of scale.

“Having cleared the field for increased regional trade, African nations need to provide the goods to sell to each other. African countries produce and export a narrow range of goods, most of which are primary commodities such as oil, natural gas and metals.

“Over the period from 2007 to 2011, two products accounted for over 80 percent of exports to other African countries from Nigeria, Angola, Mali, Algeria, Niger and Mauritania” it stated.

The report further recommended that Federal Government should strengthen private sector by making finance more accessible and less costly, and advised that mechanisms for government consultation with the private sector should be enhanced.

Stressing that the nature of goods produced and exported by African enterprises matters for the growth and expansion of intra-African, the report noted that the country’s lack of economic diversification and weak manufacturing base inhibit intra-regional trade.

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