The effectiveness of investing in the private sector for sustainable growth and development in Africa: the case of African Development Bank (ADB)
The African development Bank is one of the key development institutions in the African continent, being indigenous to the continent. It has partnered with the African governments and other stakeholders to address the challenges of sustained growth and development that face the continent as a whole. It has come to be widely accepted the world over that the private sector must be allowed to play its role if meaningful development levels are to be attained across the globe, a fact that has been embraced by the bank as it has recognized the private sector in its vision and development strategy. The objectives of the study were set to identify the investment strategies used by the African Development Bank (ADB), establish the adequacy of these strategies in promoting the private sector development agenda for Africa and to establish the role of the private sector towards the attainment of sustainable growth and development in Africa. The study was a case of ADB and data was collected from both secondary and primary sources. The qualitative approach to research was used with content analysis being used to analyze the data. The findings of the study identified the bank key areas of focus as: the growth and development of financial institutions; building up of both physical and social infrastructure, support of Africa's privatization process, project financing and support to the growth of small and micro-enterprises, with particular focus to growth oriented women entrepreneurs. It was established that the bank has developed a variety of instruments, both financial and non-financial, including loan facilities, lines of credit, equity and quasi-equity finance, guarantees, underwriting, loan syndication, advisory services, lease financing, franchising, venture capital and the micro-finance sector among others to meet its objectives. It was further established that the banks private sector assistance may be considered to establish, expand and modernize productive facilities in manufacturing, agribusiness, infrastructure, tourism, energy, transportation, extractive industries as IX well as banking, finance and other service industries. For the bank to be involved in a project it must be satisfied that a project is in line with the host counties economic growth policy, has a comparative advantage and that it is likely to succeed in a sustainable manner. Evidence indicates that the private sector in Africa is effective in creation of new employments, transfer of technology and skills, promotion of local entrepreneurship, development of rural infrastructure, utilization of local raw materials especially in the rural areas and the general improvement of the living standards in the continent.