Private Sector Stagnation Hampers Economic Growth in Developing Countries
According to the recently published Business Ready report by the World Bank, the private sector generates approximately 90% of jobs, 75% of investments, over 70% of production, and over 80% of public revenue in developing economies.
However, the sector has been stagnant since the 2008 global financial crisis. Private investment in these economies has significantly slowed down. The growth rate of investment per capita between 2023 and 2024 is expected to reach only 3.7% on average, which is barely half the rate of the previous two decades.
To combat this, the private sector must become more dynamic and resilient to address the real challenges of development. In the next decade alone, the world will need to create jobs for 44 million young people every year, with 30% of them in Africa.
To escape the "middle-income trap," developing economies must record a GDP growth rate per capita of over 5% per year over long periods. To combat climate change and achieve other key global development goals by 2030, they will need to ensure a substantial increase in investments, approximately $2.4 billion per year.
The report also evaluates the business climate of each country. In the African continent, Rwanda ranks first with a score of 72.67, followed by Mauritius (63.67), Morocco (62.67), Botswana (61), and Togo (56.1).
