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Working Paper 53 - Linkages between SMEs and Large Industries for Increased Markets and Trade: An African Perspective
During the first half of this decade, most African countries have implemented far-reaching macroeconomic reforms in a bid to achieve higher levels of sustained economic growth. The last few years have witnessed a progressive reduction in budget deficits and inflation rates, the achievement of more realistic exchange rates and higher rates of GDP growth. These macroeconomic gains and the sustainability of the economic growth trajectory could be strengthened by actively promoting the development of small- and medium- scale enterprises, (SMEs), which have the potential to become a major force for growth, product diversification, employment creation and income generation. This paper considers modalities and mechanisms through which SMEs could forge horizontal links between themselves and vertical linkages with larger manufacturing and service industries for increased market access, enhanced investment flows, skills development and technological advancements. Such linkages would help overcome the constraints that currently plague industry in African countries.