Africa's SMEs need support, say experts

Former Chairman of the International Monetary and Financial Committee of the International Monetary Fund has called on countries to pay more attention to small and medium-sized enterprises (SMEs) because of their potential to create jobs and drive economic growth.

Youssef Boutros-Ghali, also former Egyptian Minister of Finance said in his experience as a finance minister, he observed that countries were obsessed with attracting foreign direct investments and large corporations interested in African countries while forgetting that the most systemic feature of African economies are SMEs.

He was speaking at a panel discussion during the ongoing Global African Investment Summit that opened in Rwandan Kigali Monday.

"The vast majorities of enterprises generating jobs in our economies are SMEs. And these therefore have specific requirements in terms of macro-policy," he said.

According to Boutros-Ghali, SMEs are not only a source of taxes, they are also a source of employment.

"Give them room to grow fast because they are too numerous to fail. Governments need to support them," he said.

Toro Orero, the Managing Partner at DraperDarkFlow, a Silicon Valley fund for African startups noted that investments should have local relevance, use business models that work in specific markets and avoid copy paste approach.

The experts called on African governments to support domestic entrepreneurship and encourage productive partnerships between domestic and foreign investment, as well as business-friendly policies that should be created to increase investor confidence.

Francis Gatare, the chief executive of Rwanda Development Board said small and micro businesses have been the bigger beneficiaries of the country's most business reforms because of their potential. Endit