Small and mediumsized enterprises (SMEs) are widely considered the engine room of economic growth and development in many developing countries as well as in countries with economies in transition. According to the executive summary of the OECD report on (Promoting SMEs for Development: The Enabling Environment and Trade and Investment Capacity Building in 2004, pg 5) “SMEs play a key role in transition for developing countries. These firms typically account for more than 90% of all firms outside the agricultural sector and constitute a major source of employment, generate significant domestic and export earnings. As such, SME development emerges as a key instrument in poverty reduction efforts.” SMEs are in a better position to increase employment, promote industrialization and improve the contribution of non oil exports to government purse.
Small and mediumsized enterprises (SMEs) have been increasingly recognized as a major platform by which many African countries can become developed owing to their existing contribution and capability to further drive the entire African continent to a developed status. According to Charles Yeboah Frimpong in his article on SMEs As An Engine Of Social And Economic Development In Africa (July 2013), For example, “it is estimated that SMEs account for 70 percent of Ghana’s gross domestic product (GDP) and 92 percent of its businesses. They also make up 91 percent of formalized businesses in South Africa and 70 percent of the manufacturing sector in Nigeria”. SMEs are not only the engine of the economy, but can also serve as a stimulus for economic diversification in other sectors of the economy. SMEs with innovative technology have the potential to internationalize and enter foreign markets both regionally and globally. Support for SMEs have the capacity to significantly improve the standard of living of the populace and improve the economy of not only many countries in subSaharan Africa but the African continent as a whole