DEVELOPMENT TOPICS: Entrepreneur and small business support
Small businesses are often said to be the backbone of economies, driving job creation and growth. In Africa, small and medium sized enterprises (SMEs) provide around 80% of jobs across the continent.
According to the Center for Strategic & International Studies, sub-Saharan Africa alone has around 44 million micro, small and medium enterprises, most of which are micro-sized and informal. They therefore help to lift citizens out of poverty and drive a more inclusive and mature economy. At the same time, the small business sector faces many challenges, including limited access to finance or markets, low economic growth, bureaucracy, uneven cash flow, a dearth of skilled staff, red tape, complex regulations, and countless others.
Because small businesses are less resilient than larger organisations, they are at greater risk of failure.
Company support for entrepreneur and small business development
Investing in small businesses stimulates their growth and draws them into the broader economy, often by means of supply chains.
There are a number of ways in which big businesses can assist smaller ones, including providing access to market, assisting with funding, accelerating business development through training and mentorship, and helping companies to promote their goods and services.
Threats to small businesses in Africa
Many small businesses were struggling before the Covid-19 pandemic, and their continued survival is threatened by both global and local challenges.
It is difficult for them to rebuild and sustain their operations in weak economic conditions, especially given disruptions like climate change and an unregulated digital landscape. However, initiatives like the African Continental Free Trade Area (ACFTA) can help to accelerate business on the continent.