As discussions turned to the systems that enable Africa’s financial future, Absa South Africa CEO Kenny Fihla highlighted a critical priority.
Absa, one of South Africa’s five biggest banks, is among financial institutions driving the Business 20 (B20) push to expand the participation of women and youth-led micro, small and medium enterprises in the global economy.
Business 20 is the official G20 dialogue forum with the global business community, providing a platform for policy recommendations.
Working in partnership with the B20 trade & investment taskforce, the bank said this week it was happy with the release of a special report on inclusive trade in Africa, which identified a glaring gulf in regional and global participation of the micro, small and medium enterprises in the global economy.
The trade and investment taskforce’s recommendations included:
1. Expanding and diversifying trade finance access, by developing blended and risk-sharing instruments tailored for micro, small and medium enterprises — including invoice factoring, asset backed lending, credit insurance and regional guarantee schemes.
2. Developing an integrated micro, small and medium enterprises export pipeline connecting entrepreneurial support organisations, virtual support organisations and trade promotion agencies, to create a seamless pathway from incubation to export readiness.
3. Scaling and connecting existing trade incubators into regional export centres of excellence-building on current initiatives to deliver advanced support on product quality, standards and market access.
4. Negotiating partnerships with global and regional e-commerce platforms to integrate African micro, small and medium enterprises into existing digital marketplaces.
“The atmosphere was charged with excitement, pride at reaching this milestone and a keen sense of anticipation regarding future developments,” Absa’s Corporate Investment Bank interim managing executive for transactional banking, Bohani Hlungwane said.
“The event brought together international policymakers, industry leaders, entrepreneurs, business representatives, development finance institutions and financiers. The agenda was thoughtfully structured to highlight achievements leading to this point and to outline the trajectory moving forward.”
The report highlighted “the glaring gap in regional and global participation in export trade” where youth and women-led micro, small and medium enterprises are concerned, Hlungwane said.
“It further highlighted in detail the potential reasons behind closing this gap as well as the opportunity cost of not addressing the challenges. A tangible recommendation was on how to overcome the gap and create an inclusive trade in Africa,” he said.
He said the drive was aimed at increasing the employment rate within the continent “considering that the sector makes up around 90 percent of all businesses and employ over 70 percent of the workforce in Africa”.
He added: “Across global value chains, young people, women and small businesses continue to face significant barriers to participating in trade.
“Many lack access to markets, struggle with the high costs associated with both tariff and non-tariff measures and encounter persistent constraints in securing appropriate financing.
“The taskforce stepped back and examined these challenges with the aim of identifying practical ways to ease these pressures and create conditions that allow these groups to participate more fully in the opportunities of trade.
“The report sets out recommendations that focus on widening market access, improving access to financing – using digital tools to strengthen information flows so that SMEs can participate more effectively in regional and global value chains.
“But there is also work required on the side of the enterprises themselves, to ensure that when banks and other partners assess their businesses, the fundamentals are strong enough to attract investment and support.”