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Private Sector Development

Strategy and instruments for the development of the private sector in ACP countries

The contribution of the business to development and to poverty reduction in ACP countries is now widely understood and appreciated. Private sector companies contribute to economic growth by creating new jobs and providing income for employees and their families, and help the empowerment of the poor people by providing them with services and consumer products, improving consumer choice, and reducing the prices of products offered. The private sector in developing countries is characterized by an increasingly greater dynamism in a continuously changing political and economic environment.

The Cotonou Agreement , signed in 2000 and revised in 2005, underlined the importance of the support to the private sector development in the ACP countries, recognizing the key role of enterprises in accelerating economic growth and reducing poverty.

The strategy for private sector development in the ACP recommends the use of horizontal instruments (applicable to all ACP countries) in five priority areas where the Commission has a good experience and comparative advantages:

(1) Improvement of the macroeconomic framework and regulatory environment for enterprise development (Private Sector Enabling Environment Facility of the Business Environment (PSEEF) or BizClim with €20 million for 5 years);

(2) Investment and inter-enterprise co-operation promotion activities (PROINVEST - €110 million for 7 years);

(3) Facilitation of investment financing and development of financial markets (Investment Facility managed by the European Investment Bank (EIB) as revolving fund with €3,137 billion, completed by the EIB own resources with €2 billion for 2008-2013 and financial envelope of €400 million for the interest subsidies and technical assistance);

(4) Support for Small and Medium- sized Enterprises in the form of non-financial services (Centre for the Development of Enterprise (CDE) with €18 million per year, PROINVEST);

(5) Support for micro-enterprises and micro-finance (ACP-EU Microfinance Framework Programme with €15 million for 6 years, in collaboration with Consultative Group to Assist the Poor program (CGAP) and investment in debt and equity for banks and microfinance institutions provided by the EIB Investment Facility).

It follows from this approach the establishment of a flexible framework of support that facilitates synergy, collaboration and coherence.

In addition, support in favour of the private sector in ACP countries is provided through Country Strategy Papers (and National Indicative Programs) and Regional Strategy Papers (and Regional Indicative Programs).

In order to accompany the contribution of European companies to business development in African countries and to ensure cooperation between the various stake holders (European Union, African Union, European and African business), the idea of a common platform for discussion was launched. In November 2006, the European Commission organised the first EU-Africa Business Forum in Brussels. The second EU-Africa Business Forum was held in Accra, 21-22 June 2007 and at its end, participants came up with a private sector declaration as well as a set of recommendations on ways of improving Africa ?s business climate.

Regional Business Forums are being contemplated in various regions of Africa. This is the case in the Southern African Development Community (SADC), in the Economic Community of West Africa States (ECOWAS) and in the Central Africa.

The Lisbon EU-Africa Business Summit was one of the four side events that accompanied the EU-Africa Summit held in Lisbon on the 7-8 December 2007. The Business Summit repeated and amplified the recommendations of the EU-Africa Business Forum held in Accra and forwarded them officially to the Summit of Heads of States and Governments.


Last update: 17/02/2012 | Top