Standard Bank chairperson urges African governments to work with the private sector

South African banking giant Standard Bank has called on many African governments to take a step back and allow the private sector to lead the economy.

This sentiment was made by Standard Bank chairperson Nonkululeko Nyembezi as she recently spoke at the World Economic Forum in Switzerland.

Nyembezi argued that African governments should get out of the way and allow the private sector to “lead” in their economies.

The former chairperson of the JSE board, said many of these governments have reached the “absolute limit” of their capacity to be able to fix their countries and grow their economies.

Nyembezi believes those challenges are an opportunity for a private sector-led economic growth path.

“I honestly cannot see how we can accelerate African growth without that. It’s one thing to think about crowding in the private sector, but that’s not actually what I am talking about. I am talking about the private sector that leads this time around,” she said.

Nyembezi made an example with the African Continental Free Trade Area agreement, saying she supported it, and many businesses felt the same but admitted that it was difficult in real life to bring these trade agreements to life.

“We are not making a huge amount of progress. And it is in my mind because there was this divergence between the public sector that went into the room to negotiate things and then said, here it is, off you go, folks. Now there’s a scramble to try to see how we make this thing work,” she added.

“Had the African governments gone into it together with the private sector from the start, it might have been a different story. Perhaps what I’m saying is, government get out of the way.”

Representing the Central Bank of Kenya is Patrick Njoroge who said if the public sector set the rules and stuck to them, it would make a difference.

“There’s a private sector – a portion [of it] – that loves getting concessions, etc. They all come [with promises of] more employment, etc. I think we all have many cautionary tales like that,” he said.

“It is true that on the surface, we haven’t seen that much trade. But there has been a lot of work that has been done, in a sense preparing the ground.”

However, the Standard Bank boss said there’s still a need to revisit strategies on how governments work with the private sector.

“We need a better quality of governance across the continent. If governments just did one thing – governed better – we would probably take two steps, three steps forward,” she said.