Breaking barriers to private sector growth and trade

Published:  28 December, 2009

No government can build a future for its people without supporting trade and investment

Sustainable development is dependent on economic growth, and without trade, economies cannot grow. Determining the right mix of policies and practices to build the foundations for growth is one of the biggest challenges developing countries and donors face.

COUNTRY OWNERSHIP and

private sector involvement

It has been recognised that recipient country ownership is essential to the effectiveness of aid and development efforts. This can be achieved when recipient governments take a proactive role in determining how aid is allocated and managed and work closely with the private sector to develop priorities for the growth through trade agenda. The process should involve active engagement of donors and governments to assess trade development needs, define priorities and design highly targeted projects with appropriate and sustained technical support.

COMBINING ACCESS, TRADE

PROMOTION AND FACILITATION

Market access alone has not guaranteed export expansion. Despite decades of virtually free access to the European Union markets, there has been little export growth and diversification in most parts of Africa. By contrast, in South East Asia, trade and development outcomes are closely correlated with improved regulatory frameworks, infrastructure and various productivity enhancing measures.

Government authorities need to strike the right balance between trade facilitation, customs control and supply chain security on one hand and the promotion of international trade on the other, whilst at the same time, increasing awareness of the wider impact their actions have on international markets.

SUSTAINED RESULTS

Programmes undertaken by the Angolan and Sierra Leonean governments demonstrate how sustained commitment to modernisation in revenue authorities can build the platform for growth and highlight the importance of outward orientated trade and investment policies as well as public-private partnerships as an integral part of national development strategies. These reform programmes are a major component in improving the economic environment for attracting investment.

ANGOLA

n Customs clearance times reduced from three weeks to 48 hours

n Government revenue increased $215m (2.36% of GDP) in 2000 to $3,729m (10.71% of GDP) in 2008

n Total additional revenue collected (above rate of economic growth) is $6.8bn

n Transparency, predictability and expansion of customs service

through:

● Introduction of risk-based controls, speeding up the flow for legitimate traders

● Automated customs entry processing, including direct trader input

● Adoption of customs code of conduct and ‘customer’ service standards

SIERRA LEONE

n Supporting the National Revenue Authority (NRA) to implement its comprehensive five year modernisation plan 2009-2013

n Capacity building across the organisation in all areas of its activity

n Tax simplification and improved taxpayer services

n Assisting NRA to increase Sierra Leone’s tax yield

n Improved appellate structures and the establishment of revenue collection procedures that are effective, efficient and fair

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