AUDA-NEPAD and Ecobank Group joint initiative to support Africa’s MSMEs
The African Union Development Agency (AUDA-NEPAD) and Ecobank Group have announced their collaboration to strengthen Africa’s response to the impact of Covid-19 on MSMEs (Africa News, 27 May). MSMEs are critical to the African economy as they account for almost 85% of all private sector employment. Vulnerable jobs are in five sectors in Africa: trade, agriculture, manufacturing, construction and hospitality.
Governments have committed on average $20 billion to support MSMEs’ recovery, but access to existing commitments will likely be limited to registered medium enterprises due to criteria outlined by governments and the reducing appetite of commercial banks to loan to small-scale enterprises. The funds allocated for MSMEs are insufficient in most countries, leaving the biggest gaps in micro to small unregistered businesses. Based on this estimated financing gap, only 6 out of 20 countries have made commitments that can cover the MSMEs labour costs: Cabo Verde, Chad, Côte d’Ivoire, Egypt, Gabon and South Africa.
UEMOA warns of double impact
The West African Economic and Monetary Union (Union économique et monétaire ouest-africaine, UEMOA) has reported on the potential food security situation of 12 million people within its region (Commodafrica, 20 May). The President of the UEMOA Commission stated that the siutation would be the result of a “double impact of the security and health situations” in the region. And restrictive measures taken in the context of the Covid-19 pandemic could double that number. The impact of the pandemic can be assessed at several levels: the collapse of local food supply systems due to the closure of markets and the restriction of movement; the worsening of unemployment, weakening of incomes and deterioration of purchasing power, and the inaccessibility food by consumers; and the risks to agro-livestock production during the 2020/21 agropastoral campaign, which is starting under difficult conditions of access to production inputs.
COMESA: Small cross-border traders adopt new business tactics
Since the first case of Covid-19 was reported in the Great Lakes region in mid-March 2020, small-scale traders have been unable to cross borders as they have traditionally done either to buy or sell goods (COMESA News, 25 May). To support cross-border trade, which is the lifeline of a huge community in the region, the Great Lakes Trade Facilitation Project (GLTFP) has engaged stakeholders to come up with innovative means of trading across the borders of the three countries covered by the project (DRC, Rwanda and Uganda). Subsequently, a new concept of bulk-buying has been developed whereby goods are procured in large consignments in collaboration with suppliers across the borders. This ensures there is no mass movement of traders crossing the borders.
Led by the Cross-Border Traders’ Association (CBTA), this concept has helped traders minimise the risk of Covid-19 spread and allow safe trade. It consists of packaging similar goods from either side of the borders and moving them across the border using joint means of transport. This limits the movement of people to the strict minimum.
Prices are discussed and agreed over the phone. A truck escort is authorised to accompany the vehicle in order to receive payments, with mobile money transactions also used. Once the goods arrive, the traders share them out and proceed with trading at their different points of sale.