Unlocking the potential of small and medium sized enterprises in West Africa : a path for reform and action

Abstract

Small and medium sized enterprises (SMEs) have proven their dynamism in West Africa. They are perceived by policy makers as an important reservoir for growth. The African Development Bank considers they represent over 90 % of business and provide about 50% of GDP and employment in Africa. Despite the consensus on the role of SMEs in these emerging markets, West African SMEs still face many constraints in their development, particularly in accessing financial and other types of resources. This thesis analyses the causes of the constraints faced by small enterprise in countries member of the West Africa Economic and Monetary Union. It also looks at stakeholders engaged in transforming the status of SMEs. After diagnosing the status of SMEs in West Africa and identifying the stakeholder involved in SME development, the research analyses the limitations of top down public policy approaches that prevailed in most attempts to assist SMEs. It explores new approaches for SME development particularly the strategy of business to business linkage which can bring new and more sustainable dynamics to SMEs growth. Finally the research looks at current trends in the microfinance sector and suggests how a disruptive strategy could position these financial services providers to find new growth opportunity in the SMEs market.