The ambitious Agenda 2063, heralded as Africa’s blueprint for socio-economic transformation, set out with high hopes for a prosperous and united continent. Yet, a decade since its launch, many of its lofty goals remain distant aspirations. Africa continues to wrestle with deep-rooted issues like unemployment, economic instability, and infrastructure deficits that show little sign of abating.
Unfavourable realities are currently brooding on the African continent, threatening to plunge its nations into deeper economic woes and heighten global repercussions. Today, more than ever, Africa’s challenges are acute. Over a quarter of the world’s hungry now live in Africa, with one-fifth of the population malnourished. Chronic poverty and malnutrition stunt the physical and mental growth of 30% of African children, leaving the continent with the highest rate of undernourishment globally.
Economic growth in Africa has long lagged behind global trends. Between 1960 and 2002, the world economy grew at an average of 2% annually, but Africa stagnated. By 2021, nearly half a billion Africans lived below the poverty line, a staggering increase from the 140 million in 1975. Meanwhile, Africa’s population continues to balloon, growing from 228 million in 1950 to 1.3 billion by 2020, with expectations of reaching 2.8 billion by 2060. This population boom, coupled with shrinking resources and rampant unemployment, paints a bleak picture for the future unless drastic changes are made.
While Agenda 2063 lays out a bold vision for addressing these challenges, it is becoming increasingly clear that Africa’s future rests not in government hands alone, but in the dynamism of its private sector.
The Promise and Pitfalls of Government-Led Agenda 2063 in Africa
In 2015, Agenda 2063 was adopted with ambitious goals that promised a brighter future for Africa. It laid out a comprehensive vision for the continent’s transformation, with aspirations ranging from economic growth and infrastructure development to poverty eradication and a unified African identity. The agenda seeks to position Africa as a global powerhouse of the future. Flagship initiatives, such as the African Continental Free Trade Area (AfCFTA), the African Integrated High-Speed Railway Network, and the Pan-African Payment and Settlement System (PAPSS), are part of this vision. They aim to create seamless trade across the continent, connect African capitals with modern railways, and provide efficient payment solutions for intra-African transactions. But, as noble as this vision is, the government-led approach to realizing these goals has proven to be less than effective.
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Take the African Continental Free Trade Area (AfCFTA) as an example. Launched in 2019, it promised to be the world’s largest free trade area by both geography and participating nations, opening up markets and boosting intra-African trade. Yet, five years on, bureaucratic inefficiencies, policy misalignments, lack of innovation and lack of infrastructure have hampered its implementation. Similarly, the Pan-African Payment and Settlement System (PAPSS), aimed at facilitating cross-border payments within Africa, has struggled to achieve widespread scale due to administrative delays and poor infrastructure. The system, which should facilitate transactions for the African Continental Free Trade Area, remains underutilized. Without PAPSS, businesses continue to face cumbersome and expensive processes for cross-border trade, stifling economic growth and limiting the potential of AfCFTA. This should be private sector led.
These examples highlight a broader issue: government-led efforts are too often bogged down by red tape, corruption, and inefficiency. African governments are constrained by limited fiscal space, resulting in delayed projects and missed targets. Despite good intentions, these challenges have left many of the continent’s ambitious goals out of reach. Moreover, a lack of coordination between national governments and the African Union has often led to fragmented implementation of Agenda 2063 programs. For example, while the AfCFTA officially came into force in 2021, its rollout has been hampered by inconsistent trade policies, insufficient customs reforms, and infrastructure gaps. Border issues between countries like Nigeria and Benin have persisted, and intra-African trade remains far below its potential. Countries are still struggling to harmonize regulations, while outdated infrastructure continues to impede the efficient movement of goods.
Economic and Social Realities of Government-Led Development
Africa’s pressing economic realities underscore the need for faster, more effective solutions than government bodies alone can provide. The continent’s slow pace of industrialization, high levels of unemployment, and large infrastructure deficits demand urgent attention. For instance, Nigeria, Africa’s most populous country, grapples with over 70% unemployment rate contrary to official rates, and government-led job creation programs have consistently fallen short. Similar issues are seen in countries like South Africa, where youth unemployment exceeds 60%, reflecting a broader failure to address one of the continent’s most critical social problems.
In terms of industrialization, government-led efforts have been sluggish. Many African economies remain dependent on raw material exports, with limited progress in value addition or the development of manufacturing sectors. The result has been a vicious cycle of economic stagnation, as countries fail to diversify their economies or create sustainable, high-value jobs for their growing populations. Industrialization is a cornerstone of Agenda 2063, but without significant progress in this area, African countries continue to face high poverty levels and a reliance on imports for even basic goods.
High debt levels further constrain governments’ ability to fund long-term projects. According to the World Bank, Africa’s debt-to-GDP ratio has increased from 35% in 2010 to over 60% by 2022. Countries like Ghana and Zambia have recently experienced debt crises, forcing them to seek bailouts from international financial institutions. These financial struggles limit the capacity of governments to invest in large-scale infrastructure projects or social services, which are essential to fulfilling Agenda 2063’s vision.
Population growth compounds these challenges. According to the United Nations Population Fund, Africa’s rate of labour force supply occasioned by rapid population growth has outstripped that of job creation, implying that the rates of unemployment have been increasing rapidly in that the number of people seeking employment increases more rapidly than the number of available jobs. With Africa’s population expected to double by 2050, governments are under increasing pressure to provide adequate services, from education and healthcare to housing and transportation. However, traditional government-led models are proving inadequate to meet these rising demands. In the face of these complex challenges, it is clear that government-led efforts, while necessary, are insufficient on their own.
Why the Private Sector is Africa’s Best Bet for Delivering Agenda 2063:
The private sector, on the other hand, offers a more viable path to achieving Africa’s development or even Agenda 2063’s objectives for that matter. Here’s why:
- The Private Sector Drives Job Creation: The private sector is the largest engine of job creation globally, and Africa is no exception. According to the World Bank, approximately 90% of jobs in developing countries are created by the private sector. In Africa, this means that businesses, particularly small and medium-sized enterprises (SMEs), are pivotal in addressing the continent’s high youth unemployment rates. With Africa’s youth population expected to reach 830 million by 2050, fostering private sector growth is essential to creating the tens of millions of jobs needed annually.
Case in Point: Nigeria’s Flourishing Fintech Sector Nigeria’s fintech sector, driven entirely by private enterprises, has been a major source of job creation and financial inclusion. Companies like Flutterwave, Paystack, Capsule and Interswitch are revolutionizing payment systems, created thousands of jobs, and attracted significant foreign investment. In 2021, for instance, Flutterwave raised over $170 million in capital, demonstrating the sector’s ability to scale and contribute meaningfully to the economy.
- Catalyst for Innovation and Technological Advancement: The private sector is more agile and capable of fostering innovation compared to governments, which are often bound by bureaucratic constraints. Private companies are able to quickly adapt to changing market needs, invest in research and development (R&D), and bring cutting-edge technology to the market. This ability to innovate is critical to addressing Africa’s unique challenges—from agricultural productivity to digital infrastructure, and from energy solutions to healthcare delivery.
Example: M-Pesa’s Mobile Banking Revolution In Kenya, M-Pesa, a mobile payment platform developed by the private sector (Safaricom), has become one of the world’s leading mobile money services. It transformed the way Kenyans access financial services, particularly for unbanked populations. Launched in 2007, M-Pesa now processes over $315 billion annually, illustrating how private innovation can drive financial inclusion and economic growth.
- Attracting Investment: Investment is the lifeblood of development, and the private sector has proven far more effective than governments at attracting both local and international investors. Private enterprises, with their clear plans and focus on profitability, are better positioned to cultivate investor confidence. Private investments in infrastructure and Technology, such as Dangote’s refinery and Capsule technologies in Nigeria or the burgeoning renewable energy sector, demonstrate how private capital can accelerate development in ways that government budgets simply cannot.
- Scalability and Global Competitiveness: The private sector has a unique ability to scale solutions, both regionally and globally. Africa’s emerging businesses are increasingly making a mark on the global stage, bringing visibility to African innovation and positioning the continent as a competitive player in global markets. By scaling African products and services, the private sector can lead to greater economic diversification, reduced dependency on imports, and more resilient economies.
- Public-Private Partnerships (PPPs): PPPs offer a pragmatic solution for delivering on Africa’s infrastructure needs. From roads to power plants, successful PPPs are reshaping the continent’s landscape. In Kenya, for instance, the energy sector has seen rapid growth thanks to the collaboration between government and private investors, leading to an increase in access to electricity for millions of citizens.
Lessons from Other Regions and Global Trends:
Africa does not need to look far to see the transformative power of the private sector. The rapid industrialization of South Korea and the rise of tech hubs in Southeast Asia offer lessons for Africa’s development. South Korea’s model, driven by a partnership between government and private corporations, propelled the country from poverty to prosperity within a generation.
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Closer to home, Africa has its own private sector success stories. The telecommunications sector has grown exponentially over the last two decades, driven by private investment and innovation. Tech hubs in Lagos, Nairobi, and Johannesburg are leading the continent’s digital revolution, showing how private enterprise can drive development faster than traditional government initiatives.
The Road Ahead: How Governments Can Empower the Private Sector:
Governments have a vital role to play in Africa’s development, but this role should be that of an enabler, not a driver. By creating a conducive business environment—through policy reforms, reducing regulatory bottlenecks, and offering incentives—governments can empower the private sector to thrive.
- Repositioning Government’s Role: Governments must shift from being the primary engines of development to facilitators of private sector growth. This includes reforming tax policies, simplifying business registration processes, and reducing corruption, all of which will create a more attractive environment for investors and entrepreneurs.
- Support Entrepreneurship and SMEs: Small and Medium Enterprises (SMEs) are the backbone of the economy. Governments should work with financial institutions to improve access to affordable financing for SMEs by offering grants, subsidized loans, and venture capital. Initiatives like government-backed guarantee schemes can help reduce the perceived risk of lending to smaller businesses. Governments can also partner with private sector firms and international organizations to set up business incubators and accelerators that provide mentorship, resources, and networking opportunities for emerging entrepreneurs, especially in high-potential sectors like agriculture, technology, and manufacturing. By creating incentives for local industries, governments can encourage production within the continent, reducing dependency on imports and creating jobs. Policies that support startups focusing on local solutions can also boost innovation and create opportunities. I remember asking the CEO of Uproar Multimedia LLC why he had yet to execute the “smart” project he had promised the press, which was projected to generate over 10,000 jobs within a few months. His response was a single word: “funds.” This is a clear example of how the lack of affordable financing can stifle the growth of SMEs, even when they have the potential to create significant job opportunities.
- Creating a Collaborative Future: Ultimately, the future of Africa’s development lies in collaboration between the public and private sectors. Governments must recognize that the private sector has the capacity to deliver the solutions that will tackle Africa’s most pressing challenges. Through partnerships, both sectors can work together to address the continent’s infrastructure deficits, create jobs, and foster inclusive economic growth.
Conclusion:
Agenda 2063 provides a compelling vision of Africa’s future, but it is the private sector that will bring this vision to life. African leaders must embrace a development model that places the private sector at the forefront while governments serve as enablers. By working together, the public and private sectors can unlock Africa’s vast potential and deliver the brighter, more prosperous future that the continent so urgently needs.
The road ahead is challenging, but the opportunities are vast. Africa’s future belongs to the private sector, and with the right partnerships and policies, this future is within reach.
This article was written by Emmanuel Ezeoka, Chairman of Subway Labs Infrastructure Partners, a leading smart city development company, is an International Development Expert and the visionary creator of the Age of Abundance Economic System. With a deep commitment to global development equity, he writes from Abuja, Nigeria. Contact: [email protected]
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