SMES hold key to regional economic growth

As efforts to stimulate economic growth in the Middle East and North Africa (MENA) territory remain on course, focus is now shifting to small and medium enterprise-driven strategies in a bid to accelerate growth.

This comes on the back of declining oil reserves and revenues, which served as a wake-up call to the MENA governments on over-reliance on their energy reserves to fuel their respective economies.

But even as regional political and socio-economic realignment continues to take shape, governmentdriven diversification agendas are steadily mainstreaming SMES and mid-market companies as key economic growth drivers.

In its report titled ‘Financing of SMES and Mid-market Companies’, Allied Investment Partners PJSC paints a positive outlook for the regional economic growth.

This, the report says, is as a result of the regional governments’ renewed commitment and focus towards the development of their respective SME industries through their national longterm programmes and vision plans.

According to the report, the governments, especially in the GCC have realised that the SME industry now plays a pivotal role in balancing the economic development of the region.

Their role, however, remains subdued as their overall contribution

CATALYSING GROWTH: WITH AN ESTIMATED VALUE AT $1 TRILLION, THE MENA SME INDUSTRY HAS BECOME IMPORTANT IN PROMOTING COMPETITIVENESS, INCREASING PRODUCTIVITY, AND CREATING JOB OPPORTUNITIES

to the GDP remains substantially low despite making up close to 90 per cent of the total companies in the GCC.

With an estimated value at $1 trillion, the MENA SME industry has become important in promoting competitiveness, increasing productivity, and most notably the creation of employment opportunities.

This, according to the report, is as a result of the ballooning number of entrepreneurs driven mainly by favourable demographics, improvements in ease of doing business, progressive economic conditions, and lucrative, fast-growing markets.

The report also cites 2017 as a landmark year for the MENA startup ecosystem — a trend that has continued its acceleration onto 2018. The region currently boasts the highest number of business owners under 35 years or the so-called ‘millennial entrepreneurs’ with the UAE leading the pack as home to around 42 per cent of startups followed by Egypt with 12 per cent.