Financing for the African private sector will have to accelerate next year. A coalition of development banks has just launched a support plan for African micro, small and medium-sized enterprises (MSMEs or TPMEs) worth at least $4 billion. These funds will be mobilized by the end of 2021, by the association of (15) European Development Financial Institutions (EDFI), the African Development Bank (AfDB), the West African Development Bank (BOAD), the Islamic Society for Private Sector Development (ICD), FinDev Canada and the US International Development Finance Corporation. Other institutions should join the initial coalition to enable a sustainable and inclusive recovery for the African private sector.
"The conclusion is clear. The Covid-19 crisis, which is hitting most countries hard in the world, is jeopardizing decades of private sector growth and job creation in Africa. It is already causing significant setbacks, particularly in terms of unemployment, inequality and poverty across the continent.
The prospects for micro, small and medium-sized enterprises in particular are worrying,” warns the French Development Agency (AFD), following the first international summit of public development banks. These VSMEs are nevertheless essential to the economy of the African continent. They represent 90% of the entrepreneurial fabric in and 60% of formal jobs. “SMEs generate by far the majority of jobs in Africa. This is why the creation, promotion and financing
of these companies are essential for development”, underlined Bruno Wenn, president of the EDFI association, quoted in a press release.
One of the responses to the crisis must be financial: short-term and long-term debt, local currency, equity, subordinated debt, according to Aziz Mebarek, co-founder of the Africinvest group, which specializes in investment and financial services in North Africa. and sub-Saharan Africa. It is in this context that the launch of this $4 billion support plan takes place. It aims to support inclusive financial solutions for African VSMEs.