How African Governments can Support Small Businesses

How African Governments can Support Small Businesses
January 5, 2018 234Finance

By Hauwa Abubakar

It is no more news that small businesses play huge roles in a nation’s economy. This sector creates employment for millions of people across nations. Oftentimes, in a slow or recessive economy, small businesses suffer most and often do not recover. Many small businesses however thrive but not in the best of conditions. A lot of businesses in Africa have to deal with the shortage or inaccessibility to infrastructure such as electricity, internet services, water, etc. There’s also the challenge of accessing funding. Many factors play its own small role in limiting the potential of small businesses in Africa to grow and here are three simple but relevant measures governments in this region can put in place to enable small businesses to reach their full potential and contribute even more to the economy.

Provide adequate infrastructure

Many critics and researchers have continued to harp on the need for African governments to unleash a whole new dynamic in the area of infrastructure development. No country really succeeds without relevant infrastructure after all, how can you run a business in very harsh conditions? It is sad that in this day and age, many communities in Africa still suffer the impact of access to potable water, good roads and electricity. Businesses can’t thrive when lots of manpower and resources are expended on acquiring the facilities to work with. A manufacturer runs on generating sets, a designer needs electricity, even a street vendor needs good roads but they remain in a vicious cycle year after year, each business struggling against all odds to thrive nonetheless.

African leaders require a paradigm shift in their commitment to infrastructural development and must see the big picture. It is definitely a fact that we need infrastructure to reach our full potentials. Governments can explore more public-private partnerships in the infrastructure sector to meet their infrastructure needs and close the deficit.

Reinvent monetary policies

Laws guide every country’s existence. One of the many challenges of small businesses is the access to funds or inability to raise capital, acquire locations for their businesses, etc. New laws fit to address the challenges small businesses face in the contemporary world must be enacted. Monetary and financial policies should be constantly reviewed, and economic imbalance assessed to support small businesses. Governments should continue to invest in people and small businesses through partnerships with cooperative societies banks or other local institutions used by small business owners. This will have the government to better to understand startups biggest challenges, and provide a workable channel to bridge their problems.

Stop donations and empower

Access to education isn’t really the problem but affordability of education remains one. The government should make student loans available to bridge the gap between the literate and illiterate. Short and flexible courses for mature students should be inculcated in mainstream higher education systems. Avenues should be streamlined for local and foreign investors to be comfortable investing in the country. There should also be practical borrowing schemes with minimal interest rates.

African governments must learn to match their talk with action by demonstrating their will to support small businesses and they can only do this by listening to the people and understanding their needs, to enable them provide solutions that are practical and would serve both businesses and governments equally.

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Author: 234Finance

234Finance is an online hub that promotes African Entrepreneurship. We feature small and medium sized businesses on the platform, shedding light on the current and future developments in diverse sectors across Africa. We also provide free resources, share opportunities and events on our platform that entrepreneurs can benefit from and thrive in Africa’s tough business landscape.

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