Session 9 baldinato


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Session 9 baldinato

  1. 1. AfDB – ERC SME Forum – Bridging the Missing Middle Gap in Africa Workshop C 7 June 2011, Lisbon PortugalUnit in charge: E/3 SPEAKING POINTS International Partnerships to facilitate SME growth in Africa We need to respond to the needs of young Africans seeking a better future. European Union is committed at supporting the development of the economic environment in the African countries. We want to help growing small and medium enterprises. In this unsteady political climate, our efforts are concentrated to allow Africa to grow economically and to provide stability. North Africa is facing an historical change and to help the democratic growth in those countries, small and medium-sized enterprises are important. Perhaps a single market in the Mediterranean, similar to the one existing in the European Union could help. In this scenario, African entrepreneurs face several problems, such as access to finance, which constitutes a significant 1
  2. 2. constraint to growth in Africa. In particular, SMEs have difficulties borrowing from banks, which hampers their ability to grow. Micro-credit is an important source of financing for African SMEs. It is also a tool for social inclusion. Microcredit can help low-income persons and those excluded from the traditional banking sector to get access to financial resources. In the African financial environment the development of a microcredit sector is a significant phenomenon. This development requires stable and clear regulation, which enables competition and provides a level playing field. We encourage our African partners to work on this. European Union sees the support of African countries as one of its priorities, and I would here say in particular by improving access to finance for entrepreneurs. We want to dedicate a session of our SME Finance Forum on Africa. The SME Finance Forum is a permanent tool for dialogue and to promote best practice and encourage new approaches. It allows SMEs and banks to meet regularly and discuss the obstacles SMEs face. Its findings and policy recommendations are used in designing future EU policies. We seek to have a dialogue of African and European stakeholders on the most relevant issues on access to finance. 2
  3. 3.  We would like to see an African SME Envoy, an ambassador of SMEs who could represent their interest, and discuss with EU SME Envoy. The EU has appointed its SME Envoy, Mr Daniel Calleja Crespo, and all EU Member States have now appointed national ones. We are also planning a Euro Mediterranean Small Business Act, as a follow up of the European Small Business Act. The aim would be to provide a comprehensive approach to EuroMed policies for SMEs. We encourage African countries to join the European Enterprise Network. This is a project financed by the Competitiveness and Innovation Program (CIP) and is a network of SME support providers. The network helps them to find international business partners, source new technologies, receive EU funding or finance and other business related issues. A few African countries, such as Egypt, are members already. We are also considering launching new financial instruments, such as project bonds for the Mediterranean. These would be a new source of financing for businesses which will provide significant support for emerging North African countries. The initiative was announced by VP Tajani during the eighth meeting of Industry Ministers from the Euro- Mediterranean area, which was held in Malta. These project 3
  4. 4. bonds for the Mediterranean would be guaranteed by the EU Commission and the European Investment Bank (EIB). They would help growth and development in the Mediterranean area, and would help to create jobs for large numbers of young people. The proposal will be discussed at our forthcoming meetings. Current discussions on the post-2013 Multiannual Financial Framework, we want to strengthen the resources for the Euro- African partnership. In the period 2005-2011 almost 7 billion euros have been invested by the European Investment Bank (EIB) in North African countries. But the European Union wants to widen the opportunities to lend for the EIB and the European Bank for Reconstruction and Development (EBRD). This was stated in the recent Commission Communication from 25 May. The document confirmed that EU is in favour of extending the external mandate of EIB to our Eastern and Southern neighbours and the one of EBRD to some Mediterranean countries. In the light of the recent events, the European Council has announced its support of a 1 billion euro increase in EIB lending to the southern Mediterranean countries. This way the EIB has committed for a total amount of 6 billion euros for the period 4
  5. 5. 2011-13. Moreover, a sum up to 250 millions euros will be devoted to answer SMEs long term financing needs. The EBRD is expected to adopt a resolution that could lead to an agreement to begin lending up to €3bn a year to Egypt and other would be democracies in Africa. The EC has also earmarked a total amount of €745 million for the Neighbourhood Investment Facility (NIF). This is a financial mechanism designed to finance capital-intensive infrastructure projects in partner countries covered by the European Neighbourhood Policy (ENP). It will also support their private sector through risk capital operations targeting SMEs. Algeria, Egypt, Libya, Morocco and Tunisia are the African countries which currently take part in the ENP We want to support the efforts of the international financial institutions, including the EIB, to contribute to the emergence of a critical mass of financiers with knowledge and implementation of best practices. This implies also the selective use of technical assistance programmes. A good example is the FEMIP (the Facility for Euro-Mediterranean Investment and Partnership), which the EIB manages its operations in the Mediterranean partner countries. 5
  6. 6.  To conclude, access to finance by African SMEs is an important factor for the competitiveness of its economy. In the longer run, more developed, stable and open financial markets are crucial for SMEs. They also need enabling legislation, instruments and intermediaries that allow them to have access to the capital markets. Access to finance for SMEs needs to be supported by resources from governments and trans-national institutions. This in necessary to offset the high risks perceived by banks and other creditors. Therefore, EU will work in cooperation with African governments to help SMEs that will be the basis of African growth.Armando Melone, Unit E3, 57013 6