Aware of the impact of the CoVID-19 pandemic on micro, small and medium-sized enterprises (MSMEs), the sub-regional office of the United Nations Economic Commission for Africa (ECA) is implementing two complementary technical assistance focused on MSMEs in Southern Africa, including Malawi. .
This was stated by Eunice Kamwendo, Director of the ECA Subregional Office for Southern Africa, during a conference held on Tuesday 8 February in Dubai which focused on country experiences and building back better in Mauritius.
Kamwendo, a national of Malawi, said in her opening remarks that ECA first aims to build the capacity of MSMEs in Southern Africa “to effectively respond to CoVID-19 and bounce back stronger.”
“The second aims to build the capacities of MSMEs to design and apply innovative approaches to building resilience to future shocks, including digitalization.
“The target countries for these projects are Malawi, Mauritius, Mozambique, Namibia, South Africa and Zambia. In addition, the Office is also committed to financing MSMEs – recognizing finance as a key enabler for most businesses, including start-ups.
“We recently helped the Kingdom of Eswatini develop a financing model for MSMEs which we hope will replicate this success story in other countries in the region.”
The one-day hybrid seminar – attended by high-level experts in industrial development; SMEs and cooperatives as well as Peter Varndell, President and CEO of the SADC Business Council —
was co-organized by ECA; SADC Business Council and the Government of Mauritius under the Global MSME Surge technical assistance project of which the Kamwendo office is a key implementing entity.
The seminar collectively addressed how the development of MSMEs can be strengthened in a post-CoVID context and “become an anchor for industrialization, trade and innovation” with a particular focus on Mauritius as a case study countries in the context of the African Continental Free Trade Area. (AfCFTA).
She said that ECA seeks to promote inclusive industrialization in Southern Africa by leveraging, among others, innovation, trade and private sector development, including MSMEs.
“Efforts in this area include support to Member States to align their national industrialization strategies with the SADC Industrialization Strategy and Roadmap and COMESA Industrial Policy, as well as technical assistance and capacity building capabilities for further implementation.
“We are investing heavily in supporting the building of productive capacities in the sub-region, such as industrial parks, special economic zones and the development of MSMEs for their integration into national and regional value chains.”
Kamwendo said that although the health impacts of the pandemic in Africa have not been as severe as in other parts of the world, “the economic and social consequences have been catastrophic and unprecedented for Africa – MSMEs bearing the weight of the pandemic among other sectors”.
“To put this into context, the economy of the Southern Africa region contracted by 7% in 2020, making it the hardest hit region in Africa – in part due to the economic structure of the region which makes it vulnerable to economic shocks.
“The region continues to exhibit high levels of commodity dependence, low levels of industrialization, limited value chains, low levels of intra-regional trade, inadequate technological development and a shortage of local businesses of all sizes to provide much-needed impact resilience.
“We have seen how global market fluctuations, shutdowns and restrictions on movement due to the pandemic have adversely affected entire economies, including the informal economy which accounts for up to 90% in some countries.
“The extent of the social impact remains to be determined. However, gender-based violence is on the rise and the World Bank has also estimated an increase in global poverty in 2020 for the first time since 1998, with over 26 million people pushed into extreme poverty in Africa alone. sub-Saharan. ”
She highlighted that MSMEs are the backbone of the African economy, accounting for at least 90% and 60% of businesses and jobs, respectively, on the continent.
“As an office, we commissioned a survey of MSMEs in Namibia and the results confirmed what we already knew, but the numbers revealed the severity of the impact. For example, 82% of business owners combined thought their businesses were worse off in June 2021 compared to the pre-CoVID era, with low levels of confidence for the future – with many businesses closing for many reasons.
“These findings reaffirm the need to pursue economic diversification strategies in the region that would contribute to building the resilience of supply chains and reinforce the need for regional value chains in key industries.
“They also underscore the need to support Member States in developing enabling policy and institutional environments that enhance the capacities of MSMEs to engage in more sophisticated business linkages and improve their access to finance.”
ECA plans to continue conducting country studies on the impact of CoVID-19 on MSMEs in Southern African member states from this year, stating that “this is particularly important as it will facilitate rapid assessment of challenges and policy responses required by Member States. , the private sector and development partners”.
“There are always opportunities in every challenge presented if we look long enough. CoVID-19, with all its challenges, has presented a huge opportunity for African businesses, large and small, to quickly adapt to digital tools to to survive.
“This is particularly important as digital technologies provide the opportunity to reach wider platforms, networks and customers for MSMEs. This is a victory for MSMEs.
“There has been a marked increase in the use of digital tools in the sub-region powered by CoVID-19 – Namibia, Mauritius and South Africa are examples where a majority of businesses have increased their use digital beyond 70% at all levels in marketing, communication, payment systems and supply chain management.
“Going forward, we can only hope that the adoption of digital technologies resulting from CoVID-19 mitigation measures is here to stay. The digital sphere is an important catalyst for new innovations.
“As an office, we will explore ways in which appropriate policies can help Southern African MSMEs deploy innovative solutions and create new value chains.
“We will also examine the role that technology incubators can play in improving the region’s performance in this area to ensure that the Southern African economy builds resilience to shocks.”
In this regard, Kamwendo assured delegates that his office will continue to work with partners such as the SADC Business Council to expand online platforms for MSMEs to facilitate their networking and access to new business opportunities.
She said the advent of the AfCFTA represents “an important milestone for Africa and presents many opportunities for growth and transformation.”
“As Covid-19 has heightened the urgency for transformational change, the AfCFTA offers a potential lifeline for MSME development and promises to be a launching pad for Africa’s industrialization through trade.
“As we embark on opening up wider regional markets with the AfCFTA, it is essential that we empower MSMEs to seize this opportunity – This is particularly important as we are at an inflection point for the development of MSMEs in Africa”.
She added that “it is discouraging that a large majority (71%) of businesses are unaware of the African Continental Free Trade Area (AfCFTA) – this according to the Namibian study.
“This is a challenge – but also an opportunity for countries to take the AfCFTA conversation beyond the conferences to the drivers that will make the AfCFTA a reality.
“As ECA, we strive to help Member States and the private sector move the conversation forward where it matters most by raising awareness and helping to improve their competitiveness to benefit from the AfCFTA.”
She said economic transformation in Africa is possible by setting Mauritius as an example.
“The economic transformation of the region is vital. While many countries in the region are making progress, the depth and breadth of transformation needed to achieve our development aspirations, including the achievement of the Sustainable Development Goals, as well as those set out in the African Union Agenda 2063.
“In this spirit, I would like to recognize and applaud the ambition expressed by the Government of Mauritius in its industrial policy, for Mauritius to develop “a sustainable and globally competitive industrial sector that contributes to higher economic growth for Mauritius through to continuous innovation, technological modernization, productivity gains and highly qualified employment.
“Mauritius’ emphasis on promoting innovation, strongly present in the policies of various sectors, provides a solid foundation for innovation-driven growth worthy of emulation.
“Additionally, the country can play a key role as a manufacturing hub in SADC, especially in the context of the AfCFTA. Our role as ECA is to help countries in the region pursue inclusive industrialization programs in line with their development aspirations.
“Thus, ECA stands ready to accompany Mauritius and other countries on their respective journeys.”
She concluded by saying that “the economic recovery of our economies will involve rebuilding our private sector – large and small, which is at the heart of our discussion today.
“As ECA, we remain committed to this happening and part of our response will depend on the lessons, outcomes and recommendations of our deliberations.”
Kamwendo is a macroeconomist and strategic adviser for UNDP Africa, an office that oversees 46 countries in sub-Saharan Africa. With over 20 years of experience, she provides strategic advice to the region on economic development issues, including sustainable development, structural transformation and medium to long term development planning.
She leads and coordinates several knowledge products on Africa, including the Africa Sustainable Development Report, LDC Graduation Issues in Africa, and Regional Human Development Reports.
Prior to UNDP, Kamwendo worked as an Economic Governance Research Analyst for the Continental Africa Peer Review Mechanism as well as a Principal Economist and Special Advisor to the Secretary of the Treasury on Macroeconomic Issues and Government Engagement. IMF in the Ministries of Finance and Economic Planning in Malawi.
She holds an MSc and a BSc in Economics from the Universities of Southampton and Malawi, respectively.
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