African Union Commission moves on SME strategy
By Thandisizwe Mgudlwa
CAPE TOWN-WHAT will a recent workshop held in Kenya do for small business development in Africa? It is worth noting that the Small Medium Enterprise (SME) Strategy and Master Plan 2017-2021 provides the continent with an opportunity to ‘jumpstart’ economic growth and development.
And the African Union Commission (AUC) began the process of validating the SME Strategy and Master Plan 2017-2021, when it held a two-day workshop that started on October 10 in Nairobi.
Critical to the plan’s success is how far the AUC can sell the plan to its members and convince them that small businesses hold the key in the development of Africa.
According to the AUC, “The objective of the initiative is to develop an African Union strategic framework, which will support the implementation of the Accelerated Industrial Development of Africa (AIDA) and Africa’s sustainable economic transformation under Agenda 2063.”
The workshop was attended by the Senior Industry Officers from the Regional Economic Communities (RECs), the Private Sector and Development Partners. AUC and UNECA officials co-chaired the working sessions.
“The SME Strategy and Master Plan 2017-2021 aims, among others, at improving the continental business environment, increasing business formation, supporting formalisation of growth-oriented informal enterprises and startups, increasing SME/Is, MSMEs and entrepreneurs’ participation in regional and global value chains and promoting innovative financing,” according to the AUC.
Treasure Thembisile Maphanga, Director of the Department of Trade and Industry (DTI) of the African Union Commission, is appreciative of participants for their continuous commitment in supporting the AU’s Department of Trade and Industry to contribute to the sustainable structural transformation of the continent through Industrialisation.
She praised RECs and experts from various institutions – including the European Union, JICA, Traidlinks, UNCTAD, UNECA and the Canadian Government who worked closely with the Commission during the last few months by providing inputs in order to enrich the draft SME Strategy and Master Plan.
Maphanga pointed out that “industrialisation has recently become a high priority for more countries and more cooperating partners.”
She echoed the tragedy that migrants are going through while trying to join Europe and the high rate of youth’s unemployment.
“The continent’s industrialisation appears to be the winning strategy that will accelerate job creation and poverty alleviation for the coming years in addition to supporting the continent’s sustainable structural transformation,” said the AUC official.
Maphanga also referred to some key statistics about the youth population in Africa to highlight the importance of taking advantage of its full potential.
“In 2015, 226 million youths aged 15-24 lived in Africa, accounting for 19 percent of the global youth population. By 2030, it is projected that the number of youths in Africa will have increased by 42 percent. Africa’s youth population is expected to continue to grow throughout the remainder of the 21st century, more than doubling from current levels by 2055,” she emphasised. Maphanga says Africa must deepen its reflections and support for youths and start-ups.
Meanwhile, the SME Strategy and Master Plan identifies initiatives that should be undertaken in the next five years that are aimed at unleashing the potential of SMEs.
In harnessing the youth’s demographic dividend, which is the 2017 theme of the AU, Maphanga said research has identified some policy actions related to SME Development as key levers.
“According to the findings, economic reforms to create more quality jobs with multiplier effects, enhance innovation and productivity of the informal sector and support graduation from small to medium-sized enterprises, as well as transformative education to focus on innovation, skills development, science and technology and entrepreneurship are winning strategies,” Maphanga remarked.