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Today, African, European and bilateral partners launched the Alliance for Entrepreneurship in Africa (AforE) to support a stronger private sector, entrepreneurship, and the growth small and medium-sized enterprises across Africa.
The Alliance will combine and focus the technical and financial strengths of its members to improve Africa’s business environment and support the growth and success of small and medium-sized enterprises (SMEs), women in business and young entrepreneurs.
The Alliance seeks to unite multilateral and bilateral development banking, bilateral donors, and African development banks as well as its core members. The Alliance was officially announced at the Summit on Financing African Economies, Paris, May 2021.
Alliance core members include the African Development Bank (AfDB); the European Bank for Reconstruction and Development (EBRD); the European Investment Bank (EIB); the European Development Finance Institutions (EDFI); the French Treasury; the International Finance Corporation (IFC) and Proparco, the private sector financing arm of Agence Française de Développement Group (AFD Group).
The Alliance was launched at a time when African economies are recovering from the COVID-19 pandemic. Small businesses are seen as key drivers of job creation, innovation, and delivery of essential goods.
The creation of the Alliance reflects the strong commitment of African, European, multilateral and bilateral institutions, in coordination with the African Union, European Commission and others, to bolster Africa’s private sector amid ongoing African and global economic challenges.
Today, the Alliance members signed the working agreement for the Alliance. IFC will be the Alliance Secretariat, helping to coordinate and operationalize the initiative in partnership avec the French Treasury.
“Small businesses and entrepreneurs in Africa are drivers of inclusive growth, economic stability and resilience. It is essential to support their growth in order to create jobs and help Africa recover after the COVID-19 crisis. Alliance for Entrepreneurship in Africa (AfEA) is available to support their growth. IFC is proud to be part of this initiative, which deepens the partnership between international partners to give small businesses the support they need and deserve,” said Makhtar Diop, IFC’s Managing Director.
Solomon Quaynor, the African Development Bank’s Vice President for the Private Sector, Infrastructure and Industrialization, said: “Micro, small, and medium-sized enterprises are vital to Africa’s prosperity. They are responsible for 90% of all businesses and more than half of all jobs. Supporting existing businesses and the ecosystem for entrepreneurs to create innovative new ones lies at the heart of our private sector development strategy.”
“The African Development Bank is committed to the Alliance for Entrepreneurship in Africa. We want to ensure that African entrepreneurs have the means to thrive and can play an important part in solving Africa’s development challenges.”
Odile Renaud Basso, EBRD President, said: “The EBRD is committed to supporting financially and technically small businesses in the North African countries where it invests, Egypt, Morocco, Tunisia and soon Algeria. We offer an extensive suite of financial tools and advisory programme that we put at the service of small and medium enterprises and by joining forces with partners in Alliance we can archive a better impact on the economic growth of these countries.”
“Ensuring that African entrepreneurs and companies can access finance is crucial to accelerate growth and create jobs. EIB has been very active in supporting financial institutions that support SMEs, especially those who have been affected by the COVID-19 epidemic. We are proud to be a member of the Alliance for Entrepreneurship in Africa. This initiative combines the financial and technical strengths and local insight of African and international partners and together we can ensure a better future for African business,” said Ambroise Fayolle, European Investment Bank Vice President.
“The European DFIs welcome the opportunity to join hands with international and African partners to boost entrepreneurial growth in Africa. EDFI member institutions have been able o increase financing for SMEs across Africa, demonstrating that they are committed to this important priority. The deeper collaboration through this new alliance can help mobilise even more investment in the inclusive development of Africa’s private sector,” said Søren Peter Andreasen, CEO at EDFI.
“Proparco is proud to count among the founding members of the Alliance for Entrepreneurship in Africa. Proparco has long been committed to supporting African entrepreneurs and will build on the expertise acquired through the French initiative Choose Africa to contribute to this new global Alliance,” said Gregory Clemente, CEO of Proparco.
“Last May, the international community gathered in Paris at the Summit on the Financing of African Economies to devise jointly actions that will help boost a strong and inclusive recovery in Africa, grounded in a dynamic private sector. Today we are proud of launching the Alliance for Entrepreneurship In Africa. This alliance consists of prominent development partners who will support the private sector development in Africa. It is the main driver for growth, job creation, and employment. We will remain committed in the implementation phase to deliver on the ground, mobilize additional financing, promote tangible and high value added projects developed by the Alliance core members, with the objective to effectively make a difference for African SMEs through innovative financial products,” said Mr. Emmanuel Moulin, Director General of the Treasury.
Through a private-sector focused cooperation platform, the Alliance will support the roll-out of new initiatives to expand financing options for Africa’s SMEs, which cite a lack of access to finance as a major constraint to growth. According to the World Bank, SMEs account for up to 90 percent of all businesses in sub-Saharan Africa and represent 38 percent of the region’s GDP. Before COVID-19, IFCThe region’s funding gap was estimated at $331 million.
The Alliance will finance projects and support reforms that aim to improve the business and investment climate in Africa. It will also facilitate the growth and development of private sector initiatives in more sustainable digital and green sectors.
The Alliance may also include non-banking financial institutions and banks, as well as other public and private sector organizations such foundations, philanthropic organisations, venture capital firms, and business and innovation training providers (including universities, accelerators, and incubators).
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