SMEs can help Kenya realise its vision

Commentary by Paul M. Muthaura, Chief Executive, Capital Markets Authority, Kenya and Board Member and Vice Chair, Africa-Middle East Regional Committee, IOSCO

The SME sector stands out as the key driver of Kenya Vision 2030, with its businesses helping to eradicate poverty and create employment.

Africa’s story is too often focused on macro-infrastructure development (transport, energy, telecoms) supported by government-to-government and donor-led initiatives, or on multinational commodities extraction. I therefore commend London Stock Exchange Group for this report, which fundamentally shifts attention to the thriving businesses that are leveraging that developing infrastructure; driving social and economic transformation by adding value to commodities; and unlocking growth by accelerating inclusion in everything from financial services to healthcare.

The companies heralded in this book cut across the entire continent and reaffirm the rising tide of continental change being led by innovative businessmen and women committed to sustainable development and scalable wealth creation. These businesses, spanning the small and medium-sized enterprises (SME) space, reinforce the central role of this economic sector as the core stimulators of economic growth.

The SME sector stands out as the key driver of Kenya Vision 2030, standing at the forefront of poverty eradication, employment creation and, more instrumentally, inspiring future entrepreneurs to build on the SME sector’s current contribution of 35-50% of GDP and 77% of employment.

“The companies heralded in this book cut across the entire continent and reaffirm the rising tide of continental change”

The Capital Markets Authority, in partnership with industry and the Nairobi Securities Exchange, was therefore honoured to champion the establishment, in 2013, of the Growth and Enterprise Market Segment of the Exchange to allow the SME sector to access the public capital markets. As was noted in IOSCO’s 2015 Growth and Emerging Markets Committee report on SME financing through the Capital Markets, it is only through the creation of platforms to address the global challenges of SME access to finance, by championing the reform of governance and promoting reporting transparency, that we can ensure these Companies to Inspire Africa will be able to go from strength to strength.

It is through the strengthening and inter-connecting of the global capital markets that we can ensure these national jewels expand their impact across the region, the continent and the globe as they access increasingly liquid and deep markets. To ensure that the Kenyan Capital Markets Authority is able to facilitate these aspirations, we are proud to be partnering with our industry on the implementation of a ten-year Capital Markets Master Plan. Noting that LSEG actively participated in its initial development and continues to support its implementation, we remain confident that the milestones we have set for the year 2023 will be eclipsed well before then, as Kenya achieves its aspirations to be the ‘Heart of African Capital Markets’ and emerges as a competitive international financial centre.

I have no doubt that the launch of the Companies to Inspire Africa report will have a catalytic effect on the entrepreneurial spirit that is so vibrant on the African continent. We therefore remain committed to ensuring that our capital markets are poised to service that impending tidal wave of economic growth.