(Ecofin Agency) - SMEs are vital contributors to inclusive socio-economic development and growth in Africa. However, they face numerous challenges, which prevent them from unleashing their full potential. This is why the African Union is partnering with the International Trade Centre to address some of the challenges.
The International Trade Centre (ITC) and the African Union Commission recently signed a memorandum of understanding to promote inclusive trade and enhance the potential of African SMEs.
The memorandum announced on Wednesday (May 24) will harness the potential of increased intra-African trade and promote trade and market intelligence sharing through the African Trade Observatory, an online tool developed by the ITC.
It also aims to promote key continental value chains to strengthen industrial development and empower women and young entrepreneurs.
“The renewed agreement responds to changes in the global economy and the ongoing regional integration process in Africa underpinned by the African Continental Free Trade Area (AfCFTA). It reaffirms the dedication, shared vision, and joint efforts of the African Union and the lead UN agency on small business development,” the ITC informs in a release.
In Africa, SMEs generate job opportunities and income and thus contribute to poverty reduction. They account for about 80% of jobs, but face challenges like limited access to credit (because most of them operate informally). Based on those figures, in August 2022, the African Union Development Agency (NEPAD) indicated that Africa’s long-term sustainability would depend on the effective development of the SME business model.
Charlène N’dimon (intern)