(MENAFN- Daily News Egypt) The micro, small, and medium-sized enterprises (MSMEs) account for 80% of the African economy and employ 70% of the total population in the region, according to Marday Venkatasamy, Chairperson of the COMESA Business Council (CBC).
He added that MSMEs play a central role in regional value chains, particularly during this period of the COVID-19 pandemic. Strengthening MSMEs' participation in formal markets reinforces production pathways, and contributes to sustainable economic development, he stressed.
Venkatasamy's remarks came during the Financial Services Regulators Sub-regional Stakeholder Meeting that discussed solutions to increase intra-trade and financial flows for MSMEs in Africa.
The Tuesday meeting brought together 73 stakeholders comprising of central banks, ministries of finance, ICT regulators, mobile network operators, MSMEs, fintechs, and microfinance institutions.
'Digital payment systems are a focus area on course to improving efficiency and performance of SMEs in the region. This is therefore a very important forum which provides government to business, business to business and business to consumer, key policy aspects that needs to be addressed in order to promote intra-COMESA trade which is currently low,' Venkatasamy said.
Sandra Uwera, CEO of the CBC, said, 'Among the challenges impacting industry competitiveness, is the lack of an affordable and effective platform which accommodates digital cross-border payments by SMEs."
'To address this challenge, CBC's Digital Financial Inclusion programme, piloted in nine countries, including Rwanda, is expected to catalyse the transition of MSMEs from a cash-dominant to a cash-lite economy, where they have access to affordable, interoperable, secure, and real-time digital financial transactions,' he added.
Other pilot countries are Egypt, Ethiopia, Kenya, Malawi, Mauritius, Tanzania, Uganda and Zambia.
The meeting was the last in the series of six sub-regional sectoral meetings which have been convened over the last month, under the theme 'Harmonisation of Regulatory Policies Towards an Integrated Digital Common Payment Policy Framework for MSMEs'.
Lazarous Kamanga, Director of Banking, Currency and Payment Systems at the Bank of Zambia, noted the regional digital common payment policy for MSMEs to be a comprehensive framework that will provide oversight and strategic guidance to all stakeholders within the region, ensuring that financial sector programmes, national strategies and initiatives have broad levels of consistency and synergy.
'The policy framework will safeguard the needs of all individuals, micro to large enterprises, and be instrumental in attracting a diversified, sustainable and expanding pattern of external capital flows,' he went on to add. 'The proposed digital common payment policy will leverage on the existing financial rules effectively implemented at a national level, in adherence to international laws,' said Kipyego Cheluget, COMESA's Assistant Secretary General-Programmes.
Cheluget further explained that the purpose of the multi-sectoral stakeholder engagements was to harmonise existing policy platform at a regional level, to allow for the development of a low value regional digital payment scheme for SMEs. The deliberations attached great importance to the need to promote SMEs' competitiveness across the region.
Mahmood Mansoor, Executive Secretary of the COMESA Clearing House, and an Advisory Committee member of the CBC Digital Financial Inclusion Program disclosed, 'This will require concerted efforts from both the public and the private sectors, with the public sector ensuring a business-friendly environment and legislation for the promotion of private sector development and investment.'
Reviewed in the meeting were national policies that have been agreed upon by five sectoral stakeholder workgroups, which will be harmonized at regional level forming the basis upon which a digital integrated regional common payment scheme for MSMEs will be developed. The meeting agreed upon eight policy areas for harmonization in the region namely, Anti-Money Laundering (AML)/Combating Financing of Terrorism (CFT), electronic transactions, interoperability, cybersecurity, consumer protection for digital financial services, settlement system operating rules, mobile money guidelines, and national financial inclusion framework.
CBC will be furthering these advocacy efforts at the COMESA Central Banks Governors' Meeting and the Ministers of Finance Meeting.
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