Eugene Nizeyimana, Director for Strategy and Growth
http://s-scg.com/promoting-entrepreneurship-and-smes-development-in-africa/
Sustainable development of African economy can only be achieved through further empowerment of entrepreneurs and small businesses, their integration into the multilateral trade system and strengthening of business environment, industry competitiveness, policies and institutions. Enhancing entrepreneurial activities in Africa is thus a decisive element of job creation and economic growth strategies.
SMEs are a vital backbone for every sector in a growing economy and are indispensable partners for MNCs investors and governments. Identifying promising business ideas, skilled entrepreneurs and provision of capital are the prerequisite for further development. However, to sustainably foster economic growth, SMEs do not only need support during their creation, but also throughout the processes of expansion, internationalisation and transfer of businesses. These processes bring organisational and bureaucratic burdens that require advanced managerial skills.
To encourage business creation and to enable entrepreneurs successfully respond to these challenges, we need to involve Africans in Diaspora, local businesses and entrepreneurs, who possess wealth of international experience, resources and networks. There is also a need to facilitate international trade through harmonisation of trade rules and policies, supported through specific capacity building programmes and effective institutions. In addition, set incentives for the creation of industry clusters to develop strong supply chains and vertical integrated trade links.
Furthermore, establishing incubation centres and Business Development Services (BDS) dedicated to nurture entrepreneurship culture, start-ups and sharing expertise on a professional basis is crucial. Successful entrepreneurs and businesses should invest in businesses that are either upstream suppliers or downstream buyers of their core products to settle production processes within regions and to profit from the benefits of established clusters.
African entrepreneurs face overwhelming market complexities and difficulties accessing capital to bring their business ideas into reality. To promote a credit culture in Africa and to foster investment in the SMEs sector, it is essential that infrastructural reforms are made in the banking system, collateral and bankruptcy laws are to be improved and the financing instruments strengthened through innovation. Key banking reforms include enhancing financial markets competition, pursue effective capital market integration, improve collateral and bankruptcy laws to facilitate lending, expand micro finance institution and develop financing instruments suited for SMEs , tighten security to curb fraudulent activities within financial system and corruption within supply chains.In addition, financial institutions should seek to improve macroeconomic management with a view to achieving sustainable economic growth, lower transaction costs, favourable interest and exchange rates, low rates of inflation and banking linkages.
Finally, governments and institutions should seek to foster entrepreneurship as key to creating employment opportunities and sustainable economic growth through the incorporation of entrepreneurship in the curriculum of education systems and training institutions. This is increasingly becoming important as global economy continue to shift, increase in youth unemployment, advancement of disruptive innovation, changes in prosumer and market characteristics. Thus, entrepreneurial thinking is not only necessary for those who want to become entrepreneurs but for everybody in a performing market society. All members of the society should be familiarised with the concept and spirit of entrepreneurship from primary school on and must have the opportunity to attend specific education and training programmes that correspond to real market requirements.
http://s-scg.com/promoting-entrepreneurship-and-smes-development-in-africa/
Sustainable development of African economy can only be achieved through further empowerment of entrepreneurs and small businesses, their integration into the multilateral trade system and strengthening of business environment, industry competitiveness, policies and institutions. Enhancing entrepreneurial activities in Africa is thus a decisive element of job creation and economic growth strategies.
SMEs are a vital backbone for every sector in a growing economy and are indispensable partners for MNCs investors and governments. Identifying promising business ideas, skilled entrepreneurs and provision of capital are the prerequisite for further development. However, to sustainably foster economic growth, SMEs do not only need support during their creation, but also throughout the processes of expansion, internationalisation and transfer of businesses. These processes bring organisational and bureaucratic burdens that require advanced managerial skills.
To encourage business creation and to enable entrepreneurs successfully respond to these challenges, we need to involve Africans in Diaspora, local businesses and entrepreneurs, who possess wealth of international experience, resources and networks. There is also a need to facilitate international trade through harmonisation of trade rules and policies, supported through specific capacity building programmes and effective institutions. In addition, set incentives for the creation of industry clusters to develop strong supply chains and vertical integrated trade links.
Furthermore, establishing incubation centres and Business Development Services (BDS) dedicated to nurture entrepreneurship culture, start-ups and sharing expertise on a professional basis is crucial. Successful entrepreneurs and businesses should invest in businesses that are either upstream suppliers or downstream buyers of their core products to settle production processes within regions and to profit from the benefits of established clusters.
African entrepreneurs face overwhelming market complexities and difficulties accessing capital to bring their business ideas into reality. To promote a credit culture in Africa and to foster investment in the SMEs sector, it is essential that infrastructural reforms are made in the banking system, collateral and bankruptcy laws are to be improved and the financing instruments strengthened through innovation. Key banking reforms include enhancing financial markets competition, pursue effective capital market integration, improve collateral and bankruptcy laws to facilitate lending, expand micro finance institution and develop financing instruments suited for SMEs , tighten security to curb fraudulent activities within financial system and corruption within supply chains.In addition, financial institutions should seek to improve macroeconomic management with a view to achieving sustainable economic growth, lower transaction costs, favourable interest and exchange rates, low rates of inflation and banking linkages.
Finally, governments and institutions should seek to foster entrepreneurship as key to creating employment opportunities and sustainable economic growth through the incorporation of entrepreneurship in the curriculum of education systems and training institutions. This is increasingly becoming important as global economy continue to shift, increase in youth unemployment, advancement of disruptive innovation, changes in prosumer and market characteristics. Thus, entrepreneurial thinking is not only necessary for those who want to become entrepreneurs but for everybody in a performing market society. All members of the society should be familiarised with the concept and spirit of entrepreneurship from primary school on and must have the opportunity to attend specific education and training programmes that correspond to real market requirements.