BADEA Announces Multi-Billion Dollar Commitment to Boost African SMEs at Cairo Forum

Cairo—The Arab Bank for Economic Development in Africa (BADEA) has announced an initiative to amass a “global coalition” aimed at prioritizing financial assistance for Small and Medium-sized Enterprises (SMEs) in Africa. This initiative comes as a critical response to the $330 billion estimated by the IMF to be required by 2025 for Africa’s SME sector development and post-Arab Spring economic balance.

According to the Africa News Agency, Director General of BADEA, the coalition was unveiled at the second edition of its Arab-Africa Trade Forum in Cairo in November 2021. It invites approximately thirty financial institutions from the continent and the Arab world to prioritize African SMEs, particularly in the context following the COVID-19 pandemic.

With 85 to 95 million SMEs struggling under the weight of the pandemic, and the majority constituting micro-enterprises, economist Carlos Lopes emphasized the significant erosion of gains for both SMEs and large corporations. He mentioned that the situation is dire for states as well.

The coalition’s aim is to create about 440 million jobs over ten years and resolve financial issues challenging SMEs. To that end, the African Union Development Agency (AUDA-NEPAD), supported by Ecobank and other stakeholders including BADEA, initiated a campaign called “100,000 MSMEs” in May 2021. This campaign aims to create one million jobs over the next three years.

This coalition has been praised by Didier Acouetey, founding president of recruitment agency AfricSearch. He highlighted the importance of such alliances to tackle the liquidity issues and low levels of confidence affecting the local SME sector. Acouetey suggested that cohesive programs involving development banks, investment banks, and foundations are essential for this change.

BADEA reasserted its commitment to African SMEs at the latest Africa SME Champions Forum in Lomé this October, announcing a package of 10 billion CFA francs (15.2 million euros) specifically for Togolese SMEs. This is in addition to a second grant of 200 million CFA francs (almost 304,000 euros) from the African Guarantee Fund based in Kenya, allocated for technical assistance to SMEs.

In conclusion, Dr. Sidi Ould Tah emphasized that SMEs, which constitute 95% of all registered businesses in the UEMOA region, are integral for achieving sustainable development objectives, job creation, and poverty reduction. “BADEA continues to advocate a coalition in favor of African VSEs and SMEs,” he said, highlighting the need for a combined, holistic approach to solve the various problems faced by SMEs and make the youth employable.