Small and Medium Enterprises contribute immensely to the growth and sustenance of national economies not just across the African continent but in the world at large. These businesses may be small but they are resilient and occupy a key position in economies they exist in. They are recognised even in advanced economies as major drivers of growth and development not to mention employment at the grassroots. As SMEs are largely acknowledged in these economies, the need to further encourage and develop them across national economies in Africa is now more pressing with the knowledge of their potential to boost economic growth, development and employment opportunities.
Certain sub-Saharan African countries do acknowledge the importance of SMEs to an extent – Ghana for example, recognises that these small businesses create over 80% of the employment and contributes 70% to the Ghanaian GDP. Businesses of this scale with this level of impact should certainly be nurtured and developed by government and state capacities. The existence of governmental agencies dedicated to fostering these SMEs through funding and mentorship programs would further increase the chances of innovative ideas to be birthed by the small businesses.
Though small, these businesses are definitely mighty considering the extent to which the supply services and create employment opportunities as well as contribute to the national GDPs. Many economies would be unimaginable without these businesses. The Ghanaian e-Services portal recognises that small and medium enterprises are key players for national development especially in regards to the economy. Their dynamic nature allows them weather significant changes in the market.
The full reinforcement of existing SMEs and the encouragement of the upcoming ones is advisable in order to counter major problems faced by them and boost their effectiveness in the economy. National institutions such as Nigeria’s SMEDAN, Ghana’s Capacity Development Centre and the African Guarantee Fund amongst others all exist with the sole aim of providing a more suitable environment for small businesses and enlighten these SMEs to defend themselves against challenges such as inefficient production capacity, inadequate market knowledge and lack of access to necessary technology which may plague them.
To back this up, the CEO of Guaranty Trust Bank – Mr Segun Agbaje emphasizes mentions that “empowering small and medium scale entreprises remains pivotal to the sustenance of growth and development of emerging economies across the world…”
What is your take on small and medium-sized businesses? Do you think they could contribute more to the economy?