US urged to aid African SMEs

August 3, 2009
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, NAIROBI, Kenya, Aug 3- The United States government has been urged to do more to facilitate African traders to fully take advantage of the opportunities presented by the African Growth and Opportunity Act (AGOA).

Congressman Jim McDermott pointed out that while the US administration has done more to remove the barriers to African imports; more support is needed to facilitate the growth of Africa’s Small and Medium Enterprises.

“The engines of every economy are small businesses and they too will drive Africa’s development,” he stated.

He said one way to do this is to establish the ‘Small Business Development Centres’ which can provide the technical assistance and training that such entrepreneurs require to grow their business and thrive.

This model, he explained, had been very successful in Latin America and Eastern Europe and he hoped that the US could partner with African stakeholders to launch such an initiative in the continent.

“These centres work with financial institutions to find ways to collaborate and lower the cost of obtaining capital and expertise to enable the small businesses move to larger levels.

The lawmaker also proposed the formation of a ‘permanent’ US-African Private Sector Council, which would provide policy makers in the Africa and America with recommendations to reduce the cost of doing business in African and barriers that exist in joint ventures.

“If we can empower such entrepreneurs, we can power the engine that will drive economic growth for decades to come. Africa’s future is in your hands and we extend our hands to help you realise Africa’s destiny,” he enthused.

Mr McDermott spoke during the official launch of the AGOA Exhibition which was also attended by Finance Minister Uhuru Kenyatta who hailed the role played by the four regional hubs supported by the USAID in creating the necessary competitive capacity to enable the private sector take advantage of the trade opportunities by tapping into new pockets.

For instance, these hubs have seen Kenyan flowers gain the momentum to compete with South American flowers in the North American market.

“It is my hope that this initiative will not only be sustained but enhanced for the benefits of the private sector and in deed of the economy as a whole,” he said adding that the government would strive to complement these efforts and ensure the creation of a conducive environment for doing business.

Mr Kenyatta also called on the developed world to maintain an open trade policy to enable African countries penetrate their markets.

“Protectionism and trade reductions should not be part of the global response to the (global economic) crisis. We urge the international community to have an open trade and finance system including the successful completion of the Doha Development Agenda,” he said.

His remarks came after revelations that the Sub-Saharan African is the only region that under AGOA has experienced a serious decline in apparel market share in the United States which has resulted in the closure of dozens of factories and the loss of an estimated 100,000 jobs.

This has largely been blamed on the elimination of Multi-Fiber Arrangement quotas in 2005 and the expiry of safeguard measures for China’s exports last year.

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