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Submitted by Rachel Kasumba on
Punam, thanks for initiating this interesting debate on a topic that is not only on so many people's lips and minds, but also in white papers, best sellers, blogs, research papers, on the street, has investors both foreign and local rushing to get a piece of the action, donors, etc. This is a great time for a continent that until recently, was ignored except for the donor community who have spent billions in a bid to lift the lives of ordinary people out of poverty. Sergie I agree with you that involving local SMEs would help towards growth on the continent. Local SMEs create employment (self-reliance) thereby reducing unemployment, crime rates, etc. However, local solutions cannot be the only catalyst to growth in a global economy. In many countries in Africa, many local SMEs still rely heavily on importing products manufactured elsewhere, and so only act as middle men with less capacity to produce jobs. Those that would like to add value to their exports are usually unable to get loans to engage in these activities that would have brought in more revenue and work. The biggest challenge for local SMEs that are able to surmount these problems is that most of them produce goods and services that the locals perceive or find inferior to those that are imported. So they need to improve on what they produce instead of just focusing on mass production of poor quality goods at the lowest price. They need to realize that consumers are becoming more savvy and demanding and will not just spend their hard earned money in the name of patriotism at the expense of quality. Going back to your point, repositioning local SMEs will only be successful if they are enabled with affordable loans, tax credits, less bureaucracy, are willing to up the quality of their goods and service, etc