AFRICA – The African Union Development Agency (AUDA-NEPAD) and the Ecobank Group are currently working to raise US$20 billion to support the recovery of small and medium-sized businesses in Africa after the Covid-19 pandemic.
Governments have committed to support MSMEs recovery, however access to existing commitments will likely be limited to registered medium enterprises due to criteria outlined by governments and the reducing appetite of commercial banks to loan to small scale enterprises.
The AU notes that funds allocated for MSMEs are insufficient in most countries, leaving the biggest gaps in micro to small unregistered businesses.
Based on this estimated financing gap, only 6 out of 20 countries have made commitments that can cover the MSMEs labour costs, including South Africa, Egypt, Cote d’Ivoire, Gabon, Chad and Cape Verde, hence partnerships such as that being co-led by Ecobank Group and AUDA-NEPAD are vital.
AUDA-NEPAD Chief Executive Officer Dr. Ibrahim Assane Mayaki emphasized that success of this initiative will depend on the number of partners and of the quality of the partnerships.
Ade Ayeyemi, Ecobank Group CEO remarked that the initiative is focused on empowering MSMEs and to ease restarting and growing Africa’s economies with the knowledge that a significant number of jobs will be lost and businesses incapacitated.
“The workshop provided a platform for stakeholders from East, West, Central, North and Southern Africa to identify priority areas and strengthen our collective approach to safeguarding this sector, especially the micro enterprises.
“We believe that a multilateral approach which includes organisations, private sectors and governments will be beneficial and imperative for a successful implementation of support for Africa’s MSMEs.”
High level representatives from the African Union Commission, regional development banks, development financial institutions, international organisations and commercial banks from the continent came together to focus their efforts on supporting the MSMEs segment and protect the livelihoods of millions of Africans.
MSMEs are critical to the African economy as they account for almost 85% of all private sector employment.
Vulnerable jobs are in 5 sectors in Africa, including Trade, Agriculture, Manufacturing, Construction and Hospitality. Some 25 – 160 million jobs in Africa are vulnerable due to the impact of COVID-19.
This presents an opportunity to come together to increase capabilities available to MSMEs across the continent. Leaders acknowledged the need to continue ongoing efforts to support MSMEs while leveraging organizational capabilities for medium and long-term support.
The AUDA-NEPAD and Ecobank Group will work with other African like minded institutions and businesses to utilize the platform for monitoring and benchmarking, thus allowing members and MSMEs to share their experiences, best practices, national policies, and challenges, and avail resources to support African businesses and economies to overcome the challenges posed by the pandemic.
This will help prioritise the Agency’s actions in the short, mid and long term towards the Member States and the partners, to mitigate COVID-19 economic impact, and leverage on lessons learned from the 100,000 SMEs project and other national, regional and continental initiatives to increase African economies’ level of resilience amid the pandemic.