As part of efforts to inspire economic growth and transformation on the continent, the African Union (AU) developed an SME Strategy for Africa in line with its “Africa we Want’’ 2063 agenda. The vision of the AU SME Strategy is to develop competitive, diversified and sustainable economies underpinned by dynamic, entrepreneurial and industrial sectors that generate employment, reduce poverty and foster social inclusion.

Given the AU’s comparative advantage in engaging Regional Economic Communities (RECs) and Member States, and recognizing that Africa’s private sector has not been an important source of competitive, diversified, and sustainable job growth, the strategy identifies how the AU can leverage its convening power to engage RECs and Member States in re-examining how to strengthen and reinvigorate private sector engagement in SMEs.

In the framework of  the “AU’s SME Strategy” and following up on the AU First SME Forum (Cairo, June 2022), Imani Development was commissioned to design a policy document that would provide an action plan to governments, RECs and Member States on how to create dynamic SME business ecosystems in Africa.

The aim is to provide SMEs with resources and pathways to take advantage of the “Global Gateway” and “Blended financing” instruments available from development finance institutions. The policy document also recommendations on how SMEs could benefit from the opportunities offered by regional and continental trade protocol agreements, in particular the AfCFTA, to accelerate the delivery of Agenda 2063 aspirations.

More precisely, this project assessed government policies towards SME development, infrastructure dedicated to increasing investment, and opportunities for subcontracting and outsourcing activities from large companies to SMEs in Special Economic Zones (SEZs). It analysed the governance structures and regulations of SEZs and provided recommendations and an action plan for boosting business linkages between SEZs companies and local SMEs.

Read more from the policy paper, Policy for the Establishment of a Viable SME Business Ecosystem in Africa.