Jean-Marie Ackah, President, General Confederation of Businesses of Côte d’Ivoire; and President, Federation of West African Employers’ Organisation: Interview

Jean-Marie Ackah, President, General Confederation of Businesses of Côte d’Ivoire; and President, Federation of West African Employers’ Organisation

Interview: Jean-Marie Ackah

What can be done to facilitate access to finance for small and medium-sized enterprises (SMEs)?

JEAN-MARIE ACKAH: SMEs play a particularly important role in African economies, representing around 90% of private sector enterprises. However, according to several studies, more than 70% of these enterprises have difficulty accessing medium- and long-term credit. This limits their ability to contribute to GDP, create jobs and improve tax revenue. These challenges have been compounded by the Covid-19 crisis, which highlighted weaknesses in Côte d’Ivoire’s economic and financial fabric. As such, there is a pressing need to support SMEs, both structurally and in terms of the business cycle, to address the underlying issues and help them cope with the economic fallout from the Covid-19 crisis.

There are multiple factors that have resulted in the underfinancing of SMEs, stemming both from the lack of structure in SMEs and from the inadequacy of tailored banking tools. Corrective measures have to be implemented to tackle this situation, such as the introduction of an efficient information system to ensure the reliable and regular release of financial and accounting information on SMEs. This would enable banks to better understand SMEs and their specific needs.

Additionally, dedicated bank departments could promote reforms and develop structured financing tools, such as financing transactions, leasing investments and market guarantees for SMEs. The establishment of a specific legislative and regulatory framework designed for SMEs can implement fiscal, social, investment assistance and recruitment measures. Importantly, guarantee funds can promote low-rate credit from commercial banks and encourage more players in the finance sphere to participate in SME financing.

In what ways has the business climate proved challenging to Ivorian businesses?

ACKAH: While recent reforms have positively impacted the business climate, there remains room for improvement, particularly in regards to the regulatory environment. The private sector has certain expectations on important issues such as the tax base, access to infrastructure and public procurement, competitiveness and the industrialisation of the economy. More can be done towards this end.

Companies can face problems related to the quality and availability of manpower because of the existing skills gap, with a mismatch between what is available and what companies need. Many companies are also faced with organisational and governance problems that could be solved through capacity-building programmes and the sharing of best practices. Moreover, the coronavirus crisis has impacted many businesses, and dialogue between the private sector and the government has made it possible to implement support measures for businesses affected by the pandemic. By maintaining this momentum, the public and private sectors can collaborate to get through this unprecedented crisis together, and to get business back to normal.

How are Ivorian companies responding to the new demands posed by digitalisation?

ACKAH: Digitalisation has been fairly well adopted by companies in western countries, but challenges remain elsewhere. In Côte d’Ivoire, as in most sub-Saharan African countries, the transformation from traditional ways of working to the widespread use of digital technology has been slow to materialise. Sectors such as banking and insurance have implemented a digitalisation process to compete with new players, offering innovative products via digital channels that are adapted to consumer needs. Other sectors such as commerce are also gradually digitalising and making their products accessible online.

Measures taken by countries, including Côte d’ Ivoire, to curb the spread of the pandemic are leading companies to change their working habits and turn alternatives such as telework and online shopping.

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The Report: Cote d'Ivoire 2020

Economy chapter from The Report: Cote d'Ivoire 2020

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