The Role of African SMEs In Reimagining Africa Post Covid19 Recovery

In this series of articles, I want to start a conversation looking at the role of African SMEs, the Entrepreneurship Support Organisations, governments, and international development agencies in Reimagining Africa Post Covid19 Recovery. How governments can reimagine an Africa where African SMEs are part of every value and supply chain, the first point of call for digital technology services, healthcare and education, and where local smallholder farmers feed Africa from farm to fork.

Economic Impact of Covid19

The global economy has been notably disrupted by the Covid19 pandemic, some more than others, including African traders, daily wage earners, the emerging micro, small and medium enterprises (MSMEs) across the African continent. We know the MSMEs are the lifeblood of Africa, who employ 80% of the continent’s workforce. Yet analysts are predicting that around 60% MSMEs may close before the crisis is over. In the words of the Rwandan President, Paul Kagame, “today more than ever we must mobilise the right mindset for reimagining Africa.

The Covid19 pandemic is a massive call to action to develop clear pathways to opportunities for informal and formalised MSMEs across the African continent. It also presents an opportunity for SMEs to be awakened, and to work together to change the African continent and the economy by addressing structural problems and obstacles.

Empowering African Entrepreneurs

In April 2019, I stepped down as the CEO of the Tony Elumelu Foundation and returned to the UK, following 5 years of living and working in Africa, training, mentoring, and funding African entrepreneurs and advocating for better business enabling environment across the African continent. Over the 5 years, I met thousands of African entrepreneurs – brave, intelligent people responding to the challenges and opportunities Africa offers, lifting their families, communities, towns, cities and nations with their creativity and entrepreneurial imagination across sectors, including agriculture, digital technology, manufacturing, retail, education, health, and the creative industries.

The entrepreneurs I met had an unbelievably impressive and genuine desire to work and make things better, without complaining. I left the continent in April 2019, heartened by what I had seen and experienced, despite the huge obstacles. I also left with the absolute conviction that if state, national and Pan-African governments invested resources, removed obstacles, and harnessed the ingenuity of these young entrepreneurs, Africa would not only rise but soar!

Support4AfricaSMEs Campaign

In April 2019, I took a 12-month sabbatical and emerged into the global pandemic! But I could not sit back and watch the devasting economic impact this pandemic will have on African SMEs and the African entrepreneurship ecosystem. So in April 2020, working with a group of volunteers from the continent, we launched Support4AfricaSMEs, a campaign dedicated to curating and sharing Africa SMEs stories of hope, innovation and resilience, crowdsourcing and promoting in-kind resources, schemes, and initiatives to support African SMEs and the African entrepreneurship ecosystem to keep their businesses thriving in these trying times.

Leveraging the power of storytelling we launched African SME Stories – Propagating Hope. We followed this up with the launch of The African Farmers Stories (TAFS) seriesin Maythrough Instagram Live and Twitter Chat and uploaded to YouTube. We have interviewed African SMEs and Farmers, giving them a platform to share their experiences as they have turned the Covid19 pandemic to catalyse their business survival and transformation in Africa. An aggregation of these important resources can be found here:  http://www.support4africasmes.com/

The Resilience of African SMEs amidst Covid19

What we have witnessed from Africa SMEs on the ground across the continent is resilience – showing they can change, pivot, take bold decisions, and take care of their workers, suppliers, and customers. Mamamoni, under lockdown, took to the distribution of food and face masks to poor women. HelpMum added distribution of face masks to their birth bag for vulnerable women. TYB used drones to support their government in Sierra Leone with surveillance of hard-to-reach communities, to ensure they were complying with lockdown rules, as well as delivering medication. Ada Osakwe, Founder of The Nuli Juice Company, launched #NigeriaSupportYourSMEs and then Small Business Nigeria Network (SBNN), whilei4Policy Foundation convened the pan African Digital Assembly Forum to name but a few.

With the onset of the pandemic, SMEs have mobilised on a scale not seen before – diverse coalitions have emerged, demanding support and resources, not just for themselves, but across sectors, gender, age, and geographies. SME networks have emerged, collecting data about their sectors to inform the responses and demands from their national governments for the specific support they require to weather the economic impact of this pandemic.

It is important to take the momentum that has been created during lockdown forward, to rebuild African economies. African SMEs must take their demands to their local, state, and national governments, and ensuring they sign pledges in support of SMEs, to guarantee a long-lasting, systemic change in the entrepreneurship ecosystem. They must seize their own power to effect change. I used to say that the elephant in the room is the isolated entrepreneur. Now, they are a part of the growing network of awakened SMEs!

Role of African SMEs in Reimagining Africa post Civd19

Post Covid19, African SMEs must be engaged in reimagining Africa because they are part of the solution and a vital part of the conversation. African SMEs must be at the heart of the Task Forces set up to revitalise the economies across Africa and must be involved in co-creating policies, solutions, strategies, initiatives, programmes and incentives geared towards strengthening the survival of SMEs.

There is a mindset change taking place amongst African SMEs, a greater recognition that there is power in the collective action, and in speaking with one voice. African SMEs can, and already do, have African solutions to African challenges.

They must continue to use technology to work collectively to share information, knowledge of best practices and opportunities to help strengthen the entrepreneurship ecosystem. In a lockdown, the networks of networks – local, sector and gender-based networks the African SMEs have built, the direct actions they have taken, the digital conventions, webinars, meetings, summits, forums, conferences, panel discussions, and virtual shows they have hosted must continue.

Support for African Entrepreneurship Ecosystem Builders

Post COVID-19, SMEs and entrepreneurship support organisations must systematise entrepreneurship development and make it sustainable, as foreign direct investments, grants and even VC investments will reduce. African SME support needs evidence-based strategies. Institutionalising entrepreneurship development requires funding, and local entrepreneurship support organisations need to be supported with local funding connected to government economic development plans, highlighting the need for political will to put more money into building sustainable entrepreneurship ecosystems, and for governments to be held accountable for their budgets.

African SMEs Working with Governments

African SMEs should also realise that there is no tension between being an independent business owner and working with the government. Entrepreneurs can be independent, but also part of a collective network to ensure their demands are heard by ministers and policymakers, for a more equitable and transparent system.

Many of the stimulus packages put in place by governments across Africa need to be kept in place to build a robust entrepreneurial ecosystem, coupled with support through taxation, regulations, digital transformation, infrastructure, financing, and data. Governments’ working in partnership with SMEs can strengthen their economic growth, as these collaborations address problems and find collective solutions.

African MSMEs must be active in government and learn to lobby government agencies and policymakers. They must identify and prioritise specific demands and follow through on these demands and suggestions. They must support governments to collect data on the sectors, so the demands are evidence-based.

Role of African Governments and Policy Makers in supporting African SMEs

Post Covid19, governments and policymakers, now is the time to bring both new and existing networks into the fold, to listen to the voices of the African SMEs and harness their innovative solutions to reimagine Africa. The change will happen at local levels, led by SMEs, through the formalisation of the informal sectors, and by educating and supporting the urban and rural poor.

Governments and policymakers must incentivise and accelerate registration of SMEs, and together with donor agencies, must use data and research to drive their support and accelerate the digitisation of collected information. The participation and engagement of SMEs will be essential in this process to highlight their unique problems, but also to bring solutions, and translate them into practical action that can be monitored and evaluated.

Meaningful change is not a consequence of speeches by politicians, policymakers, private sector leaders, or donor agencies. Governments, in a reimagined Africa, must understand how to work with local talent to build a better, stronger Africa for all. SMEs must be part of co-creating strategies that address financing, market access, intra-Africa trade, SME training and education, mentoring, support services for business development, and marketing and communications. Post covid19, it is fundamentally important that SMEs are at the heart of these conversations.

We know that the SMEs are the gateway into communities because for many, their business product or service has been developed in response to a gap they have identified in the market. They have insight because they are close to their customers and can see the trends as they happen. Governments can reimagine an Africa where SMEs are part of every value and supply chain, the first point of call for digital technology services, healthcare and education, and where local smallholder farmers feed Africa from farm to fork.

Governments Must Incentivise Domestic Investment

Additionally, it is time to incentivise domestic investment and institutional financing for SMEs from African banks, especially from government banks to set the example, introduce structured financing to enable SMEs to buy equipment and inputs from within Africa, and build local manufacturing hubs to create local talent with skills required for the industry and workplace. It is also time to develop the intersection of government, society, and business in Africa, going beyond the old ways to develop radical new ways of doing business on the continent.

Budgets Are Moral Documents

Budgets are moral documents, and governments must respond to the demands coming from African SMEs with imagination and bold equitable redistribution, instead of focusing only on big business benefits. These changes require tremendous leadership, from bottom-up and top-down.

The most radical reimagination of where Africa can get to is if it truly and fully harnesses its most precious gift – human capital – young men and women who are looking for a hand up and not a handout. Where SMEs are central to the greater society and not apart, where governments base policies on real-world experiences of the African frontline workers like farmers, software developers and microfinance providers, and not professional conference speakers with their PowerPoint presentations.

Covid19 pandemic is an opportunity to step back and look at the big picture: what does it mean to enable African SMEs? and think from a different paradigm, about investing in new alternatives and developing systems rooted in Africa. As we emerge from this pandemic, a more coordinated approach will be required to support new and existing African SMEs as they take on the changes to the global economy. 

Parminder Vir OBE, Co-Founder Support4AfricaSMEs

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