Africa has some of the lowest default rates in the world, yet still pays some of the highest costs for capital. That contradiction, highlighted in last week’s B20 recommendations handover, goes to the heart of why trade reforms, digital transformation and investment opportunities remain out of reach for many economies on the continent.
These costs are never borne by governments alone, though. As usual, small and medium enterprises (SMEs) tend to bear the brunt, struggling to access the capital, markets and partnerships they need to thrive. They get locked out of the very opportunities global leaders say they want to create.
The B20 agenda is ambitious, to say the least. It emphasises infrastructure, blended finance, digital and green transformation, employment, and intra-African trade through the African Continental Free Trade Area (AfCFTA). On paper, these recommendations could dramatically transform local economies, but in practice their success hinges on one crucial factor.
Without collaboration that deliberately makes space for SMEs, these policies remain theoretical, and the promise of growth risks forgoing the very entrepreneurs who drive jobs, innovation and local prosperity.
I had the opportunity, as host of the SAICA BIZ Impact Podcast, of sitting down with some of the B20 task force members last week, especially those focused on trade, finance and digital transformation.
Luthando Vuba, head of International Trade at Standard Bank, laid bare the challenge. Structural barriers in emerging markets shape perceptions of risk, inflating the cost of capital despite Africa’s low default rates. Transparency, he argues, is key, and countries must tell their investable stories more clearly. SMEs too must be able to present viable, scalable projects that attract funding.
Crucially, SMEs should not rely solely on banks. Instead, blended finance models and public-private-philanthropic partnerships are the future, but only if SMEs band together and form coalitions around sectors such as water, energy or agribusiness. Doing this allows them to present joint ventures capable of accessing large-scale, high-impact projects.
Former Industrial Development Corporation (IDC) chair Busi Mabuza of the trade & investment task force echoed this call through the lens of trade. SMEs cannot scale in isolation, and she told me that to leverage the AfCFTA entrepreneurs must actively pursue cross-border partnerships, while governments ensure border regimes are efficient, tariffs are conducive and digital platforms are accessible. Without co-ordinated action, SMEs risk being excluded from the larger continental economy, despite policies that, on paper, aim to include them.
Our SMEs must not be afraid to actively seek cross-border partnerships, leveraging the AfCFTA to reduce overreliance on local demand and build the capacity to tell their investable stories clearly, aligning with expectations of global funders
My discussions with Phuti Mahanyele-Dabengwa from the digital transformation task force and Shadi Chauke from the employment & education task force reinforced the same lessons, cautioning that digital transformation often leaves rural SMEs behind and emphasising the fragmentation of government initiatives. Again, the co-ordination of cross-sector efforts is essential to ensure that resources, skills and opportunities reach the SMEs that need them most.
Taken together, these insights reveal a clear truth. Collaboration is the missing middle. For SMEs to not just survive but to thrive in these challenging times, the public, private, philanthropic and entrepreneurial sectors must work together not just in theory but through deliberate, practical mechanisms.
This means SMEs must organise themselves around sectors, form coalitions and pursue joint ventures to compete for high-impact projects. It means pushing for blended finance arrangements where banks, development finance institutions, governments and philanthropic funds co-invest with dedicated SME allocations. Governments must break down silos, creating joint task teams across ministries with SME representatives at the table, while digital skills and platforms need to be made accessible so that rural and township enterprises are not left behind.
Finally, our SMEs must not be afraid to actively seek cross-border partnerships, leveraging the AfCFTA to reduce overreliance on local demand and build the capacity to tell their investable stories clearly, aligning with expectations of global funders.
It’s a big ask, but the B20’s purpose is to set the bar high and aim higher. However, it will be judged not by the eloquence of its reports, but by whether an SME in Khayelitsha, Kigali or Kitwe can access the capital, markets and partnerships necessary to grow. Collaboration is not just desirable or a buzzword, it is the only way forward. When SMEs have a seat at the table, Africa’s growth story can finally be inclusive, resilient and sustainable.
The opportunity is clear. The question now is whether governments, investors and SMEs themselves are ready to move from rhetoric to action. If they are, the B20 won’t just be remembered for its policy papers but for the moment SMEs go full Fast & Furious, taking the driver’s seat in Africa’s economic race.
• Mtwentwe is MD of Vantage Advisory and host of the SAICA BIZ Impact Podcast
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