(Nairobi) – Ministers, high-level officials and business leaders of East African Community (EAC) countries recognize small businesses as key drivers of economic growth, with priority needs related to access to finance and participation in green and digital trade – this, resulting from the first regional roundtable to follow the Global SME Ministerial Meeting in Johannesburg in July.
The roundtable, held during the 25th East African Community (EAC) Micro, Small and Medium-sized Enterprises (MSME) Trade Fair, hosted this year by Kenya, was co-hosted by Hon. Wycliffe Ambetsa Oparanya, Cabinet Secretary for Cooperatives and MSME Development of Kenya, and the International Trade Centre’s (ITC) Executive Director, Pamela Coke-Hamilton.
The roundtable included country representatives from Burundi, Rwanda, Somalia and Uganda, and also high-level representatives from over 15 countries, including Barbados, Belgium, France, India, Indonesia, Norway and the United Kingdom. The World Bank also joined from the multilateral sector, as well as the United Nations Resident Coordinator for Kenya, on behalf of the entire UN structure.
In Kenya, SMEs make up about 30% of GDP and account for over 90% of all jobs created. Across the East African Community, SMEs make up more than 90% of businesses and 60% of employment, making up 29% of regional GDP.
While key drivers of employment, SMEs globally face significant challenges to growth.
‘This Trade Fair recognizes the creativity and resilience of SMEs while we recommit ourselves as policymakers and partners to address the challenges they face, through the green transition, access to finance, skills development and technology adoption,’ said Cabinet Secretary Oparanya, in his welcome address.
He added that a supportive ecosystem is key to enable small businesses to realize their full potential. Supporting SMEs to grow is also key to address youth unemployment, through the support of youth-led innovation and enterprise development.
‘Small businesses are drivers of economic growth, national and regional, advancing innovation and regional value chains,’ said Cabinet Secretary for EAC Affairs of Kenya, Beatrice Askul. ‘SMEs help reduce poverty, empower women and support income distribution.’
Equipping SMEs to grow, in a sustainable and inclusive way in the region and beyond, requires coordination under the African Continental Free Trade Area (AfCFTA).
‘The AfCFTA is not just a trade agreement, it’s a catalyst for industrial development, innovation and inclusive growth in countries and among countries,’ said AfCFTA Secretary-General Wamkele Mene, delivering the keynote address.
Prioritizing digital transformation, digital and green trade
Key stakeholders on a panel following the high-level remarks highlighted priority areas of support to small businesses, as identified by 60+ countries in the call to action emerging from the Global SME Ministerial Meeting in Johannesburg: access to finance and markets, and green and digital trade.
According to ITC research, 43% of businesses report difficulties securing finance, rising to 57% among micro firms.
Over 80% of companies say digital technologies helped them to increase sales and reduce costs. ITC found that firms are heavily impacted by the digital readiness of their business ecosystem.
Only a third of companies have taken steps to adapt to climate change or reduce their environmental footprint, according to ITC research, presented by Floriana Borino of the ITC Strategies and Policies for Trade team.
Serving small businesses as One UN
‘Attend to the SMEs because if we don’t take care of them, if we don’t nurture them, we leave cracks in our economic and social infrastructure,’ said United Nations Resident Coordinator Stephen Jackson. ‘That could lead to undermining of our economic and social progress.’
Pamela Coke-Hamilton, Executive Director of the International Trade Centre, the joint agency of the UN and World Trade Organization, said: ‘This roundtable coincides with a landmark moment in ITC’s own history – the establishment of our first corporate office in Africa, right here in Nairobi.’
She added: ‘The timing is no coincidence. It’s because we have seen firsthand in our engagement throughout the East African Community and its partner states the deep commitment you each hold to ensuring connected, sustainable and inclusive trade.’
In closing the roundtable, EAC Deputy Secretary-General Annette M. Ssemuwemba said: ‘Every SME represented at this Trade Fair tells a story of courage, creativity and possibility. May the outcomes of this roundtable translate into action that delivers, financing that flows and partnerships that will endure.’
Delegates will issue a communique following the roundtable, which will be presented at the EAC Heads of State Summit at the end of November, and will be presented by the Government of Kenya to be included in the chair’s statement, which is a step forward into the political significance of the Global SME Ministerial process.
Last month, the chair’s statement of the G20 Trade and Investment Working group included a reference to the importance of the Global SME Ministerial call to action.
Note to Editors
About the International Trade Centre – ITC is the joint agency of the World Trade Organization and the United Nations. ITC assists small and medium-sized enterprises in developing and transition economies to become more competitive in global markets, thereby contributing to sustainable economic development within the frameworks of the Aid-for-Trade agenda and the United Nations’ Sustainable Development Goals.
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