President John Mahama has cautioned African governments against stifling innovation through excessive regulation.

He warned that such practices are choking private sector growth and undermining the continent’s economic potential.

Speaking at a private-public business dialogue during the ongoing 9th Tokyo International Conference on African Development (TICAD IX) on Thursday, President Mahama stated that the public sector must change its approach and treat businesses as genuine partners in development, rather than adversaries.

“The public sector must see the private sector as partners and not an irritant,” he said. “In the past, it was like this sector is just about profit and all that. And so the public sector had tended to crowd out the private sector.”

He argued that governments often pay lip service to the idea of the private sector as the “engine of growth” but fail to provide the enabling conditions for businesses to function.

“Now, everybody uses the hackneyed phrase that the private sector is an engine of growth. But how does an engine operate if you don’t give it the right fuel, healthy fuel, engine and hydraulic oil, for it to be able to operate properly? And so that’s the role of the public sector. We must createa policy that creates the framework for an enabling environment for the private sector to grow.”

Mahama stressed that private enterprise cannot be expected to bear the burden of development without profitability.

“The private sector is not Father Christmas. It will go where it can get a good rate of return on investment. And so it’s government’s duty to create the space for the public sector to exercise its creativity, and that is what we need to reorient the public sector to do.”

Drawing from his time as Minister of Communications, Mahama recalled how burdensome licensing rules once crippled Ghana’s emerging ICT industry.

“I was Minister of Communications in the early days when the tech ICT sector was exploding and people were coming home and asking for licenses to set up internet cafes, and if you saw our regulator and the conditions you had to meet and all that, I mean, it was just crazy.

"I mean, by the time you go through that list, you’ll not be able to start anything. And so when I became Minister, I said, but why? Why license them? If you want to set up an internet cafe, why don’t you just open it, if you have the investment? And when we did, internet cafes exploded across the country. They didn’t cause any harm. They didn’t lead to any coup d’état, nothing.”

He said a similar mindset nearly derailed telecom liberalisation, with fears that opening up the sector to private investors would jeopardise national security.

“When we’re liberalising our telecom space, they said, Oh, telecom is so important. You cannot give it to the private sector. You know, it’s sensitive. The CIA would listen to our conversations and all that. I mean, today, look at the telecom sector. It’s contributing so much to the GDP of Africa’s growth.”

According to Mahama, Africa’s youth cannot unleash their full creative potential if governments continue to suffocate industries with regulations.

“So what we need to do is to create the right environment for the young people to thrive. We should not overregulate.”

He recalled concerns raised by players in Ghana’s financial technology space during his campaign.

“I met with the FinTech last year during the campaign, and I was asking them, What are your problems? And they said, over-regulation. Why don’t you ease it up so that we can invest more?

"And so I think that we must not be too sensitive in guarding and trying to regulate and all that. [We] must create the space so that these young people can exercise their creative talents and contribute to sustainable growth in our countries.”