On the occasion of the high-level event "Africa: towards a sustainable recovery for the private sector", organized by EDFI as part of the first International Summit of Public Development Banks, financial institutions announced that they would mobilize at least $4 billion for African small and medium enterprises by the end of 2021.

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. And is already causing significant setbacks, particularly in terms of unemployment, inequality and poverty across the continent. The outlook for micro, small and medium-sized enterprises (MSMEs) in particular is worrying.

These MSMEs are nevertheless essential to the economy of the African continent and provide essential jobs to vulnerable populations, as recalled by all the participants of the high-level event of the Finance in common summit, dedicated to sustainable recovery for the sector. private in Africa. These companies represent “90% of the entrepreneurial fabric in sub-Saharan Africa”, specifies Sergio Pimenta, Vice-President Middle East & Africa at the International Finance Corporation (IFC, World Bank group).

In Nigeria, for example, the most populous country in Africa, they “concentrate 86% of jobs”. However, “many African MSMEs are currently suffering. One of the responses to the crisis must be financial: short-term and long-term debt, local currency, equity, subordinated debt, etc. », supports Aziz Mebarek, co-founder of the Africinvest group, which specializes in investment and financial services in North Africa and sub-Saharan Africa. Sergio Pimenta also insists on the importance of strengthening the business environment and political dialogue in order to provide new opportunities for companies, within markets and value chains.

The current crisis reinforces the obstacles that these MSMEs face on the ground, and which often prevent them from accessing financing and thus fully deploying their development potential. “What do African entrepreneurs need?” asks Ifeyinwa Ugochukwu, Executive Director of the Tony Elumelu Foundation, which works to empower African entrepreneurs. “Let the banks trust them. Entrepreneurs cannot grow without capital, nor capacity building with training and technical assistance. With the Covid-19 pandemic, MSMEs need the support of public development banks more than ever. »

In addition to the 15 European development financial institutions (DFIs) of the EDFI association, the first participants in this coalition include the African Development Bank (AfDB), the West African Development Bank (BOAD), the Islamic Society for Development (ICD), FinDev Canada and the US International Development Finance Corporation. Other institutions should also join the initial coalition.

This ambitious support plan aims to support inclusive financial solutions for African MSMEs. For Diane Karusisi, Managing Director of the Bank of Kigali - Rwanda's largest commercial bank - there is urgency: "We must put the money in the hands of entrepreneurs and multiply partnerships with DFIs to build the growth of next 20 years in Africa”, she recommends.

And to also call for support and training for young Africans, who are the entrepreneurs of tomorrow, particularly in the climate finance sector. By 2030, no less than 80 million young Nigerians will thus enter the labor market, agrees Kola Masha, co-founder and managing director of the social enterprise Babban Gona, which trains and supports young farmers locally. “Among young people on the labor market, we will have to find the means to finance all entrepreneurial initiatives, including those in the informal economy. »

Mobilization in favor of the African private sector is a priority objective for reviving African economies, as expressed by Marjeta Jager, Deputy Director General for International Cooperation and Development at the European Commission, announcing the total commitment of the 1.5 billion euros from the European Fund for Sustainable Development (EFSD), which have been massively redirected towards a response to the Covid-19 emergency for the private and non-sovereign sector, to mobilize in total more than 40 billion euros of investments. Taking risks, guaranteeing financial intermediaries to enable them to overcome the reluctance to lend to entrepreneurs is a key issue for the European Commission, Member States and development banks.

The European Union plans to extend its action in this area from 2021.