The Chief Executive of the Ghana EXIM Bank, Sylvester Mensah, is championing advocacy to push African leaders to be deliberate in their support for small and medium size Enterprises (SMEs) to compete globally.
The support to SMEs includes assisting them to surmount regulatory hurdles by creating an environment that enables regulatory compliance, exposure to international networks and capacity building on best practices.
Advancing his advocacy, Mr Mensah believes that for SMEs to grow and compete favourably, they must be assisted to penetrate global markets. He made his case with the GEXIM example which has deliberately sponsored a number of SMEs to trade fairs and international exhibitions to build networks and access other markets.
“Access to markets creates more exports and generates foreign exchange for the country which is important to job creation and economic development”, he noted while speaking at the Global SME Finance Forum taking place in South Africa.
According to him, “SMEs are integral to the development of economies. We must therefore champion their growth. Governments do not do SMEs a favour by supporting them to grow. SMEs hold the key to economic growth. Creating the environment and providing support for them to thrive is the way to go.”
“African governments must be deliberate about supporting SMEs. One way of doing so is facilitating their acquisition of regulatory Licenses and certifications by creating a one-stop shop where SMEs can interface with regulators, meet requirements, and get their licenses; this ensures efficiency in their operations,” Mr Mensah advocated.
In many third-world economies, Mr Mensah noted that information on securing licenses and relevant certifications is often sketchy and fragmented, yet regulators come hard at SMEs that fail to comply.
Using the Ghana example to advance his call, he narrated that SMEs have to regularly interface with the Registrar of Companies to file their returns, as well as the Food and Drugs Authority, and the Ghana Standards Authority for standards certification and compliance.
SMEs dealing with regulators to align their processes after non-compliance, he observed, increases their costs of operation. Hence, his suggestion of creating a one-stop shop where various regulators will have desks to attend to the needs of these enterprises.
“Not only is this convenient for SMEs, but it also ensures efficiency in their operations,” the GEXIM Chief Executive told the Forum last week.
Mr Mensah further emphasized the significance of SMEs to African economies, stressing their relevance to economic growth.
He said, “SMEs are integral to the development of economies. We must therefore champion their growth. Governments do not do SMEs a favour by supporting them to grow. SMEs hold the key to economic growth. Creating the environment and providing support for them to thrive is the way to go.”
The Forum was organised by the International Finance Corporation (IFC), under the auspices of the G20 is on the theme, “Building resilience and creating opportunities for growth.”
The World Bank estimates that 1.2 billion new jobs need to be created for the young people projected to enter the workforce in the developing world by 2050. Meanwhile, only about 420 million new jobs are expected to be created.
This significant gap highlights a major global challenge to provide enough employment for the growing youth population, emphasizing the urgent need for strategies that foster inclusive job creation. SMEs appear to be the most feasible avenue for the creation of most of these jobs essential for social stability and economic growth.
It is against this backdrop that Sylvester Mensah made the call for support for SMEs. According to him, the support does not only mean funding but also other interventions to help SMEs scale over obstacles, expand, and create jobs.
“Supporting SMEs does not only have to come through funding. Providing mentorship opportunities and capacity-building ensures their growth and sustainability. When they then get the funding, they are more likely to do better, as their knowledge and capacities have been enhanced,” he observed.
