90% of African economies are made up of small and medium-sized businesses. In other words, the creation of wealth and jobs is ensured by these SMEs. However, the latter, at the center of all discourse, remain largely forgotten in public policies. While the financing gap for SMEs is estimated at $300 billion, and in a context of strong social tensions, consolidating the growth of African SMEs is a matter of urgency.
This is the challenge taken up by Africa SME Champions Forum, for ten years, to bring together around an event the main players in the world of SMEs, public officials, financial players, SMEs themselves, to resolve this equation. “SMEs are the heart, the lungs of our economies,” recalls Didier Acouetey. Launched in 2014, Africa SME Champions Forum aims to shake things up. Since launch, we have seen results. After each edition, we carry out a survey. They manage to achieve growth and create jobs.” Proof that the format works.
And for the 8th edition, after Nairobi, Dakar and Kampala, Lomé is hosting the event. Enough to confirm the positioning of the Togolese capital which aims to be a financial hub as will be underlined by the Prime Minister, Victoire Tomegah Dogbé. Before recalling the urgency in which this edition is being held. “Without jobs, our survival is all threatened, the stability of our countries is threatened. We must realize the urgency of our actions, indicates the minister before recognizing that “in the face of health, climate, security and economic crises, our African economies have been able to show themselves resilient thanks to SMEs which constitute 95% of the economic fabric. ” And the Minister mentioned the initiatives put in place in Togo to respond to this challenge. “Reforms are underway in Togo. They have led to growth in our SMEs, in all sectors. Our startups raised $6 million last year. But when we talk with young entrepreneurs, we realize that there is a glass ceiling. Often our SMEs are born, develop, but have difficulty scaling up due to more factors, governance, human resources, financing, etc. We are often admiring the major global players in agriculture, industry, logistics and even digital services. But we must remember that these multinationals were SMEs. We in Africa have the potential to do as well if not better. There is an entire ecosystem that needs to be rethought around African SMEs. At each stage of business growth. Because at each stage the needs change. We must work collectively otherwise our conferences will be in vain.” logistics or even digital services. But we must remember that these multinationals were SMEs. We in Africa have the potential to do as well if not better. There is an entire ecosystem that needs to be rethought around African SMEs. At each stage of business growth. Because at each stage the needs change. We must work collectively otherwise our conferences will be in vain.” logistics or even digital services. But we must remember that these multinationals were SMEs. We in Africa have the potential to do as well if not better. There is an entire ecosystem that needs to be rethought around African SMEs. At each stage of business growth. Because at each stage the needs change. We must work collectively otherwise our conferences will be in vain.”
Badea reiterates its commitment to SMEs: an investment of 10 billion FCFA intended to support SMEs
Which is precisely the message advocated by the Africa SME Champions Forum: bringing together the entire ecosystem concerned to find collective solutions, encouraging partnerships. On the model of work supported by the Arab Bank for Economic Development in Africa (BADEA), among the main partners of the forum, which, on the occasion of this 8th edition, reiterated its commitment to African SMEs. This results in particular in the signing of an agreement with the Togolese government worth 10 billion FCFA intended to support SMEs. An envelope which is also accompanied by a second financing of 200 million FCFA, “intended for technical assistance to SMEs” .
“This 8th edition constitutes an important milestone in the coalition in favor of SMEs launched by BADEA and its partnerships with this idea of bringing together around the same table all the institutions interested in SMEs, declared the president of BADEA, Sidi Ould Tah. Within the UEMAO area, SMEs represent 95% of the companies listed, recognized as major players in achieving development objectives, in their ability to create employment and reduce poverty.” This explains the attention paid to SMEs, at the heart of development strategies; some countries have even created ministries dedicated to VSEs/SMEs. Just as they are at the heart of the bank’s strategy, supported through different instruments, including lines of credit.
What seems to be the key to the solution, and the approach advocated by the Africa SME Champions Forum, is to encourage partnerships between the different stakeholders involved. “We need to work together” president of BOAD. We need this type of partnership to regroup our forces and meet the needs of our SMEs,” urged Serge Ekoue, president of BOAD, which is celebrating its fiftieth anniversary, and which has, over the last few years, deployed 400 billion in favor of SMEs. “One of the big problems today for SMEs is the lack of guarantee. Many SMEs have significant needs but no guarantees.” It is in this spirit that BADEA makes its contribution, by strengthening the capital of these guarantee funds to better guarantee these SMEs.”We need to think of other mechanisms.
Innovative mechanisms
Being innovative in terms of financing methods will recommend Frannie Leautier, Senior Partner and CEO at SouthBridge Investments. “With, for example, short-term financing. It is very difficult to find this kind of financing. Short-term financing flexibility is very important. 7 days, a few weeks, a few months… “The carbon credit market also, of which a significant part falls to Africa, can benefit African SMEs.
A plea too. From edition to edition; the forum acts as a channel for entrepreneurs to public and institutional officials. “We can always do better but in ten years things have progressed,” observed Didier Accoutey in closing. In fact, today initiatives dedicated to supporting SMEs exist and are multiplying, the Cofina Academy, the BRVM basket bonds or even the SME compartment created by Afreximbank or Enat Bank, the first bank dedicated exclusively to financing women in Ethiopia. But to increase its effects, and ultimately respond to this financing gap, we must act on risk assessment. The heart of the problem will explain Ferdinand NGON KEMOUM, Managing Director of Oragroup, a “bank more oriented towards SMEs”. Which twists the passage of an old received idea: “The financing gap is not attributable to the banks but to the lack of resources available to support our economies.” Inviting to fuel the debates around this point.
In the meantime, because the SME Champions Forum is also the celebration of African champions, several prizes were awarded, including that of entrepreneur of the year for Safietou Seck CEO of SARAYAA Group and the bank for Orabank .
On the same subject :
AFRICA SME CHAMPIONS FORUM 2023: “the development of Africa will be achieved through SMEs”
Source: Africa News Agency