Enhancing the capacity of African vulnerable countries in adopting policy incentives and innovative instruments for SMEs' participation in regional value chains

The potential of the African private sector, which is dominated by small and medium size enterprises (SMEs), and its role in diversifying economies and improving competitiveness is critical and will continue to grow as it is increasingly being called upon to provide innovative and efficient ways of transforming countries and supporting the Agenda 2030 of the Sustainable Development Goals (SDGs). However, the private sector, especially in vulnerable African countries, faces tremendous challenges to survive, grow, transform and be resilient, which limit their potential to drive structural change and sustainable development.

The project aims to increase the role of SMEs in the manufacturing and supply of value-added goods and services. It will do so by building the knowledge and capacity of select African countries (Benin, Burundi, Cabo Verde, Central African Republic, Togo, Uganda) to adopt policy incentives and innovate instruments (e.g., digital and technology tools for data analysis, market information, access to financing and businesses opportunities) that can strengthen the ability of SMEs to produce and trade efficiently, and at scale, towards regional markets. This will contribute to the creation of new market niches and expansion of cross-border trade under the African Continental Free Trade Area (AfCFTA).

The project will be implemented by UNCTAD in close collaboration with UNECA, UNDP, UNCDF and RCOs in target countries. It will provide policy advice on the necessary tools and instruments to promote higher productivity activities and support the process of industrial agglomeration; conduct research and analysis of industrial policies, value chain mapping, regional markets opportunities, and determinants of sustainable digital and financing technologies; design and pilot test of statistical standards, data collection and analysis, and transactional trade, services and financial data through innovation and new technologies; and build stronger partnership and coordination for the expansion of value-added cross-border trade and regional industry clusters under the AfCFTA.

The expected outcomes of the project in target countries are enhanced research and policy analysis on inclusive industrial development; SMEs' improved access to knowledge and information on industries and markets (domestic and regional) and enhanced production capabilities for value-added products and services; and increased participation of SMEs in value-added activities and regional trade. The expected results of the project will contribute to economic diversification, income generation and sustainable development prospects in the target countries.

The project will directly contribute to SDGs 1, 5, 8, 9 and 17. The project also contributes to a vast number of secondary SDG targets that would greatly benefit from better knowledge and policy implementation of industrial development programmes, and enhanced tools for SMEs’ participation in value-added production and regional trade.