Small businesses important for Africa's growth

UNITED NATIONS - Africa's small businesses are key to economic growth, and joint ventures with Chinese companies can help, Ibrahim Mayaki, CEO of the African Union's New Partnership for Africa Development, has said.

Mayaki, who was prime minister of Niger from 1997 to 2000, said that boosting Chinese joint ventures with African companies to the next level could help see Africa move towards more value added industries.

"I don't think Chinese investors really need advice," Mayaki said in an interview with Xinhua during Africa Week, a week of Africa-related events at United Nations headquarters on Oct 12-16.

"The small-scale entrepreneurs, big firms, they have done joint ventures with the African domestic private sector (for many years), we just need to boost that movement in order to reach another level," he said.

The process has already begun in Ethiopia and Kenya where Mayaki said China has relocated some of its industries and trained local staff to work in them.

He said although industrialization was an important objective, reaching the objective would involve focusing attention now on small businesses, which play a significant role in Africa's economies.

These small businesses include smallholder farmers and entrepreneurs in the informal sector, he said.

"Smallholder farmers are feeding Africa today," said Mayaki, adding that "80 percent of the food we eat is produced by smallholder farmers."

The majority of smallholder farmers are women, he said, and governments could help them to learn new skills in areas such as management, climate change adaptation and market access.

Another area the government can provide support is in the informal economy. Mayaki said that on average, 60 percent of African economies are in the informal sector.

"There are a lot of dynamic entrepreneurs in the informal economy but governments need to help them shift to a formal economy; which means financial literacy, which means managerial capacities, which means access to the services of taxation," he said.

Africa's continued high birth rate means that the continent will have to create an additional 300 million jobs over the next 15 years, said Mayaki.

He said that the private sector would be the primary sector that creates these jobs, but governments still had an important role to play.

"The role of government is to enhance entrepreneurship, because the governments by themselves will not create jobs, the jobs will fundamentally be created by the private sector," Mayaki said.

While Africa can take inspiration from China's economic growth, it's own path will be different because the world is now much more interconnected, he said.

"Africa has to go through a learning curve of industrialization -- not repeat the model of China but inspire itself, from the Chinese experience," he said.