gvA Update

In developed economies, a relatively small number of fast-growing small and medium enterprises (SMEs), often called “gazelles,” account for a majority of all the new jobs being created. World Bank Enterprise Surveys found that these high growth firms make up over 16 percent of all SMEs, and create almost 38 percent of new jobs. In Brazil, 8 percent of SMEs account for 57 percent of new jobs. Small to medium enterprises (SMEs) across Africa are facing the challenges and opportunities of a digital world. However, many SMEs in Africa are constrained by unreliable infrastructure. Every SME in Africa must realize this is the age of the millineals, the so-called Generation Y cohort. This is the cohort of people born any time from about 1980. Now realize that about 70 percent or more of the African population is in this Generation Y age bracket, that is, of those below age 35. In a recent talk I advised every small business person person in Africa to be sure to acquire, immediately a smart phone or electronic pad in order to engage the world. The value chain for many production and services is now global. A small business can locate even in the remotest African village and engage customers and suppliers from around the world. But even so, be careful, because the internet has terrible flip side. It contains a great amount of misinformation that can lead the unsuspecting business person to peril. African governments must recognize that it is in their own self interest to encourage and promote SMEs, as many of these would represent the backbone for internally generated revenue. Many of the big name companies of today, like Dangote, Microsoft, JCPenney, and Facebook were once small and medium enterprises. As Andreas Wenzel said, the SMEs can play critical roles in nation building. Consider as he said that in Germany, SMEs contribute about 52 percent of GDP and 60 percent of the workforce. This can also happen in Nigeria and across Africa. But to reduce the high mortality rates for SMEs in Africa and make them contribute significantly to national economic development, we must provide what it takes to reduce their high mortality rates, strengthen their management skills, and also legalize the assets of the poor to mitigate the problem of collateral mismatch that many of them face. For African economies to grow much faster than the average near 5 percent growth rate now observed, SMEs must be strongly encouraged and promoted with public policy. I am Magnus Kpakol, and that's my view.

 

Posted: Aug 25th, 2015 @ 02:41:13 AM