Editorial team

Editorial team

  • First editor's note

    By Luc Rigouzzo , Proparco's Chief Executive Officer

    We are very pleased to share this first issue of Private Sector & Development with you. This bimonthly magazine aims to compare the opinions of Proparco’s community of investors with those of academic experts and members of civil society on the role the private sector plays in the development of South countries. 

    The private sector is a powerful tool for the development of poor countries. It is both the main engine for growth and job creation and an intermediary for public policy, in particular thanks to public private partnerships. In many countries it also contributes to providing essential services. Finally, even in the poorest countries, external private flows (foreign direct investment and migrant flows) and domestic flows (savings and local investment) are on a much higher scale than the amounts of public aid for development.

    Yet literature on this topic remains widely underdeveloped. Private Sector & Development aims to bridge this gap. The magazine will be addressing a wide range of topics: the impacts of mobile telephony on development, the role of the private sector in access to water, the challenges of microfinance…

    This first issue is devoted to the lack of access to financing for African SMEs which constitutes one of the main bottlenecks for growth on the continent.

    I would like to express my warmest thanks to all the editorial team and to all the contributors to this issue. Their articles break down several preconceived ideas and go much further than simply reminding us of the structural reasons for this situation. Indeed, if credit to Africa’s private sector only reaches a maximum of 18% of GDP against over 100% in developed economies (A. Tadesse, E. Sacerdoti), it is not so much due to a lack of profitability in financial intermediation on the continent (M.S. Martinez Peria), it stems mostly from an excessive perception of risk by local and international financiers (P. Collier, J. Lefilleur). Yet the experience of practitioners who have accepted to devote human resources to this market segment (P. Derreumaux, P. Hoppenot) shows that the activity of financing SMEs can indeed be profitable. This observation is also shared by all the financial intermediaries that PROPARCO has been supporting on the continent for thirty years.

    As Paul Collier points out in his article, the publication of this magazine coincides with an economic crisis that may well once again reduce the availability of financing for African SMEs. This would seem somewhat illogical insofar as everyone agrees that African growth will remain much higher than in OECD countries, in particular due to the rise in demography and urbanization which are for the first time leading to the emergence of a vast domestic market.

    This crisis also highlights the importance of convergence between the private sector and the public sector and underscores the need to seek economic models that reconcile profitability and developmental, environmental and social impacts. This magazine aims to contribute to the debate on the role of the private sector in this process; it is not intended to belong to Proparco alone, but to be a tool for dialogue among all the members of this North-South community who are interested in these issues.

    Please do not hesitate to subscribe to this free magazine and pass on the word!

     

    Discover the first issue