SMEs vital to driving Africa’s economy
Naguib Sawiris, Executive Chairman, OTMT Investments
SMEs are pivotal to Africa’s economic growth, but they need government and private backing to help drive the continent forward.
Small and medium-sized enterprises (SMEs) in Africa represent the largest number of enterprises on the continent. They suffer from the lack of financing necessary to grow due to the fact that most banks prefer to finance large enterprises and avoid small ones.
The World Bank and the international institutions’ programmes have both failed to promote and support SMEs. On the other hand, local governments are unable to provide the financial support that SMEs need to excel as, due to their small size, it is not possible to bring in expensive talents so they need management support. Most countries in Africa do not have programmes that encourage preferences for SMEs in government contracts.
SMEs are also victims of their inability to stand in the face of unfair legal and regulatory environments, unlike the big firms who have the clout to fight bureaucracy and corruption. What is needed is the creation of special funding for SMEs, from both private and public funds. Programmes should be especially dedicated to SMEs, or at least dedicated to give preference to SMEs.
“My advice is to have faith in Africa. In africa lies the highest potential for growth in all the world”
I started as a small business that grew into a medium-sized enterprise, then into an international conglomerate. There is no secret to success; in my case, it was the support of my family, an excellent education and not taking ‘no’ for an answer. In addition, ethics are fundamental to building an excellent, well-guarded reputation, which helps one achieve what would be impossible to achieve if one had a tarnished reputation.
It’s about jumping on the opportunity that comes your way and putting your time and effort in to realise it – jump over every obstacle that you are confronted with. Self-confidence is a must, yet on the other hand arrogance and conceit are formulas for failure.
My advice is to have faith in Africa. In Africa lies the highest potential for growth in all the world. There is a bright light at the end of the tunnel as corruption – which is the biggest obstacle to growth and development – is fading away, so seize the opportunity and put your trust in Africa before someone else does.
My advice to SMEs is: do not sit still and look for help. Contact venture capital firms, do not be intimidated and look for management help – many institutions offer such services for free. Be ambitious and perseverant. I am personally a big fan of Africa and intend to put my investments in the best continent in the world.