The government must support household businesses to improve job prospects and reduce poverty, a new report has noted. The report, "Fostering durable and inclusive growth in sub-Saharan Africa", by the
But a lift in agricultural productivity and other small businesses can touch more ordinary people.
"We show that household enterprises are the most likely source of jobs for the majority of the population in sub-Saharan Africa, at least over the short and medium term," it says.
The report urges focus on removing obstacles by easing credit access, providing agricultural subsidies, and making clear land use rights, in the service and agricultural sectors, where the bulk of the family enterprises do their activities.
Discussing the report last week at Statistics house in
He said the integration of agriculture into value chains would be critical to ensuring that growth comes with reduction in poverty levels. Selassie said
"In line with experience worldwide, a shift of labour to other more productive sectors will gradually tend to reduce the share of agriculture to GDP [Gross Domestic Product - the broadest measure of economic activity in the country]," the report said.
It recommends a business environment that does not overburden household enterprises with overtaxation or regulation. Growth in sub-Saharan Africa is projected to climb to 5.5 per cent this year, from 4.9 per cent last year.
Frequent elections in the country have been blamed for budget deficits. Keith Muhakanizi, the secretary to the Treasury, said last week during the release of the IMF report, that the cycle of elections was responsible for budget distractions.
"That's the danger of democracy pushed by donors," Muhakanizi said. "Pressures for current expenditures increase, especially for wages, due to pressures to win elections."
He said while the push for expenditure increases, the drive for tax collection also goes down. In the run-up to the 2016 elections, government expenditure is expected to shoot-up in what experts believe could be another expensive election.
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