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5. Improving Supply Responses in ACP Countries: Private Sector Development with Particular Reference to SMEs
| 5.1 | Governments and the EU need to demonstrate visible commitment to private sector development. ACP governments must be steadfast in their commitment and not capitulate when faced with inevitable adverse exogenous shocks. To create a workable partnership, a minimum set of governing rules and procedures that are acceptable to all parties will need to be developed and adhered to by all parties. |
| 5.2 | At present the CDI is responsible, within the EU, for assisting ACP countries with industrial development. It has produced a sound plan for private sector development. Its effectiveness is currently hampered by having to operate, at times, under cumbersome, centralised, bureaucratic procedures. Ways of reducing these need to be investigated. Potentially there is much to be gained by ensuring other organisations are also included, and by increasing and targeting funds towards projects, particularly in areas such as financial sector development and institutional support for SMEs. |
| 5.3 | More research is required into the development of environments conducive to business growth. For example, there is a need to relate the shortcomings in infrastructure with the ability to produce and market goods at internationally competitive prices, match skills with needs, and balance general and vocational training. ACP policymakers require more information. In order to obtain this, links between public and private sectors need to be strengthened. |
| 5.4 | Private sector led growth requires the development of a sound financial sector. In many ACP countries, financial sectors are plagued with market failures. Increased dialogue is needed to find appropriate solutions. Foreign direct investment, technology and know-how agreements are important for the creation of an indigenous research capacity. Centre-satellite systems are a means of diffusing skills, knowledge and technology, and creating employment opportunities. More research into their potential in ACP countries would prove useful. |
| 5.5 | There is much to be gained from the development of micro, small and
medium-sized enterprises. Under the correct conditions, they have the potential to act as
an engine of growth for the manufacturing sector. A co-ordinated policy for their
development is required to ensure their sustained proliferation. The challenge of any post
Lomé arrangement is to ensure that:
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