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May 23, 2016

Public-private sector mistrust undermining Africa’s progress

   MISTRUST between the private sector and governments in Africa is one of the biggest impediments to the delivery of infrastructure, the CEO of a South African multinational company says, WRITES DIANNA GAMES.

This issue has dogged African development for many years — suspicion and even animosity between the two "sides", whose strategic collaboration is critical to delivering better lives for Africans.

At various pan-African events I have attended in the past few weeks, the private sector, when mentioned at all, has been characterised largely as "the enemy".

Talk about development in organisations such as the African Union and UN Economic Commission for Africa (UNECA) tend to place the state at the centre of everything. The private sector is viewed as an unreliable adjunct, focused on exploiting Africans rather than providing any benefits to people or the state.

Although the mistrust issue has been around for a long time, it has been given new impetus in the corridors of continental power by the findings of the AU’s high-level panel on illicit financial flows, which estimates that $60bn a year is leaving the continent illicitly, a figure later revised upwards to $80bn.

Of this, the panel’s report says, 60% derives from the activities of large commercial companies in the form of transfer pricing, tax dodges, trade misinvoicing and corruption. Also mentioned are tax incentives, which are not about outflows, nor are they illicit. Read more ... 

- Published in Business Day SA, 23 May 2016.