SMEs in sustainable development: Their role in poverty reduction and employment generation in sub-Saharan Africa

Abstract

Poverty alleviation has been positioned high on the international development agenda following the adoption of the United Nations Millennium Development Goals (MDGs) in 2000. African countries initiated various missions to establish sustained economic growth by increasing productivity with an ultimate goal of poverty reduction. The significance of small and medium enterprises (SMEs) in poverty reduction and employment generation is widely acknowledged. Despite the high failure rate amongst SMEs, particularly in the African context, some are striving with excellent results and are demonstrating signs of growth, innovation and sustainability. This paper explores the development of SMEs as a strategic measure for job creation in sub-Saharan Africa. It examines the role of SMEs in achieving sustainable employment in Africa. This study will benefit governments in Africa, getting them to focus on the development of the SMEs, and guiding them on how best to integrate SME development to achieve poverty alleviation. The recommendations proposed in this study may be helpful in policy formulation, business operation and regulatory practice for sustainable growth and development in the sub-Saharan African context.

Keywords:

• African development
• innovation
• employment
• regional integration
• small and medium enterprises
• SMEs
• job creation
• developing countries

Acknowledgement

An earlier version of this paper was presented at the Globelics Conference 2017. The reviews received from the conference are highly appreciated for improving the quality of the paper.

Disclosure statement

No potential conflict of interest was reported by the authors.

Additional information

Funding

This work was supported by the National Research Foundation, South Africa and the Tshwane University of Technology.