Broadening the participation of the local private sector in Africa’s construction and energy sectors through modern industrial policy

Expanding the role of local players in major infrastructure projects is a major challenge in Africa. The domestic private sector is notably absent in the construction and energy sectors, which are fundamental to the achievement of Africa’s transformational goals. The construction sector provides critical support for social and economic development, while the energy sector is arguably the infrastructure sector where private investment is most needed for industrial development in Africa. Interventionist industrial policies are needed not only to boost the level of investment in these sectors, but also to lay the foundation for the growth of private entrepreneurship and to enhance the contribution of the local private sector to sustainable and inclusive development. The benefits, in terms of jobs and broader economic development, are beyond question. While African Governments are beginning to think about how to use modern industrial policy to promote local businesses, they should do more to help local businesses to compete effectively for public-private partnerships in infrastructure provision. This is the conclusion of the Economic Commission for Africa (ECA) 2015 report on Enhancing domestic private sector development in Africa: construction and energy sectors. This policy brief outlines some of its key messages and recommendations.