A new report by the Chatham House Africa Programme identifies policy options for governments, businesses, and investors to support job creating private sector development through scaling up small- and medium-sized enterprises (SMEs) in four sub-Saharan African countries. It highlights what is needed to help businesses grow to become important in their region and provide formal jobs to rapidly expanding young populations.
Developing Businesses of Scale in Sub-Saharan Africa: Insights from Nigeria, Tanzania, Uganda and Zambia draws on interviews conducted with owners and managers of over 60 businesses across the four countries to present a snapshot of these commercial environments, identify common concerns, and highlight positive policy trends.
Ben Shepherd, Consulting Fellow with the Africa Programme at Chatham House and one of the authors of the report, said: “To achieve the sustainable growth and employment objective of the Sustainable Development Goals – and meet the needs of swiftly urbanizing and expanding populations across Africa – concerted action is needed, especially greater collaboration between governments and the private sector.”
The population of sub-Saharan Africa is projected to more than double by 2050 and it is therefore vital that African companies grow in order to provide more jobs. Larger companies are more productive, more competitive and make better employers. The report reveals a great entrepreneurial energy across the four countries. But to harness this potential, SMEs require increased access to mid-scale finance; experienced middle managers and a skilled workforce to recruit from; better developed infrastructure networks, particularly electricity access and roads; improved access to regional and international markets; and clear and consistent regulatory and tax regimes.
The research highlights the contribution new technologies can make in addressing key areas for action, such as education and skills development, as well as access to capital and markets.
The report acknowledges that Africa’s private sector will drive growth and job creation in sub-Saharan Africa in the 21st century. The correlation of job creation, socioeconomic development and poverty reduction means that policymakers will need to better understand the drivers of, and obstacles to, the growth of African companies if they are to achieve national development goals. It concludes that small changes in national policy or investors’ attitudes to risk on the continent can make a marked difference by empowering entrepreneurs.
The report, funded by CDC Group, the UK’s development finance institution, will be launched on Monday 11 September at Chatham House. Report authors will be joined by Rory Stewart OBE MP, Minister of State, Department for International Development and Minister of State, Foreign and Commonwealth Office; Tony Elumelu, Chairman of Heirs Holdings; and Murray Grant, Managing Director of Intermediated Equity at CDC Group.