SMEs central to economic growth in Africa

NAIROBI: This year alone, Africa has hosted several global summits; the 10th World Trade Organization (WTO) Ministerial Conference and the July 2015 Global Entrepreneurship Summit. Kenya has been lucky to play host to the two conferences, affirming the country’s growing influence in the global arena.

Africa is at the centre of a major transformation in the way it relates with the global economy, explaining the need for it to be present at the table of international trade decision making.
Those of us who have been in Africa over the past decade witnessed the region become the world’s most exciting economic frontier, transforming nations and offering hope to a new generation of accomplished and engaged youth. Africa’s economic expansion is nothing short of remarkable.

This time, the heart of the story is the boom in small and medium-sized enterprises (SMEs). Today, these small and growing businesses create 80 per cent of the region’s employment, establishing a new middle class and fueling demand for new goods and services.

Day-in-day-out, studies have focused on developing Africa’s SME sector as a vehicle to employment and job creation and as a key to the region’s entrepreneurial environment needs.But what else are they? What else needs to be further highlighted? What can those who seek to support their growth do better? We all agree that SMEs, just like big businesses, start with a vision or an idea. But fundamentally, SMEs play a critical role in nation building, nation advancement, and a nation’s innovativeness. Development in Africa cannot happen without them; growth cannot happen without them; socio-economic paradigm shifts cannot happen without them; and poverty cannot be reduced without them.

The WTO conference, whose aim is to bring a wind of change, could not have come at a better time than this. Hopefully, it will strike a deal that will have governments, the private sector and international investors consider and commit to Africa’s young people, and have SMEs as the central pillar in ensuring the stability of the world’s economy. One of the greater challenges however is access to finance.

My question to those participating in the WTO conference is how do we support small business opportunities in terms of their financing avenues and their growth agenda? For Kenya, this is an historic moment being the first time that we are hosting the WTO conference.

Kenya’s stature is growing in terms of global and regional trade; and remains a country that represents what the possibilities for Africa can be in terms of trade.At the end of this conference, expectations are high that the experts will come up with a framework to empower small businesses, push governments, private sectors and investors to solve common challenges that face SMEs.

This includes lack of opportunities for training, retraining, retooling, upgrading, or reinventing an SME business; need for a sound business plan, good accounting practices, establishing networks with institutions that can help conceptualize and transform skills to entrepreneurship, access to financing channels (as there are for some big business), low cost loans, government-backed programs, and supplement incomes.

For Africa, Kenya is a case in point. Its government and associated bodies have launched many initiatives to support entrepreneurs and the SME sector. The conference offers a significant opportunity for big corporations like Kenya Commercial Bank (KCB) to showcase entrepreneurship. For KCB, this is a platform for the bank to demonstrate its strong impact and heritage in Africa and its future commitment to the Continent.

Since inception, the Bank has supported socio-economic developments across the region to the tune of over $1 billion (Sh100 billion), effectively boosting entrepreneurship. We are committed to the African Agenda, we are optimistic about the continent’s future potential in the area of entrepreneurship, innovation and we continue supporting regional legacy projects to drive national development and economic prosperity.

In the last few years, Africa has been growing tremendously in terms of population. We have a younger demographic and democracy in a lot of African countries is strengthening. Africa’s young population is well over 500 million in more than 50 countries. We are a big continent blessed with natural resources, agriculture, skills and knowledge.

Young people on the continent are more upbeat about their ability to become entrepreneurs than their peers in any other region and therefore the need for the government, the private sector and investors to pat their backs by either making access to finances for startups easy or by offering mentorship programmes and supporting their business growth.

Africa’s time has come, but it is up to Africa to work towards achieving global economic success. Its leaders, private sector and corporates need to stand together with a new mindset, and rise to the challenge of creating continental economic development. Economic and social connectivity is essential. Differences need to be put aside and everyone needs to be ‘African’ for Africa’s sake.