All sorts of meetings on the topic of Africa’s economic takeoff are constantly being organized. Local transformation, inclusive growth, industrialization, youth unemployment, competitiveness, etc. are discussed at them. Strangely, they often address the role of African SMEs between the lines. Yet they are the real drivers of Africa’s economic transformation.
Do we believe in the power of SMEs?
SMEs ensure that there is a broader and more equitable redistribution of the benefits of growth because they account for 90% of private companies in Africa and create 45% of employment. They serve as both laboratories and incubators by paving the way for innovation and entrepreneurship. Their remarkable distribution across all territories allows them to provide employment and purchasing power in areas that are the most remote from economic centers. They are also a remarkable melting pot for training and human resources. Finally, they constitute the first stage for Africa’s economic rationalization process. Despite this preponderance, why do SMEs only account for 33% of Africa’s GDP, against 60% in developed economies? It is because they do not benefit from the necessary economic and institutional attention that could promote their development. On the contrary, they are bombarded with taxes, which hampers their growth. Furthermore, the recent study by the PWC consulting firm has shown that African SMEs were the most subject to tax in the world. What benefit can SMEs hope to gain from the taxes that they will be made to pay? What public services will be rendered to them? Too few unfortunately. Consequently, they very often prefer to remain below the radar and stay in the informal sector. Another major factor which severely hampers the development of SMEs in Africa is their difficulty to access financing.