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					CDE




                      CDE
 Centre for the Development of Enterprise




      An Institution of the ACP Group of States and the European Union
                 Financed by the European Development Fund
 CDE




Supporting SMEs:
 an Aid Priority?

           Presentation to the
       Development Committee of
        the European Parliament
           Brussels, 20 February 2006

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CDE



Outline of the presentation

 Does Assisting SMEs make sense?
 The need for an historical perspective

 What are donors doing today?

 CDE’s possible contribution



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Assisting the Private Sector

“A thriving private sector is essential
 for sustained poverty reduction.
 Business activity is the main engine
 out of poverty, providing jobs and
 incomes for the millions of people who
 live on less than $1 a day. Without
 private enterprise and local
 entrepreneurs, there will be no jobs.”

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Business activity is a continuum…

 Micro enterprises
 Small & Medium
      Number of employees
      Assets
      Turnover
 Large
      SOEs
      Foreign Direct
       Investments


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SMEs are at the Crossroads

 Microfinance provides opportunities to
  the poor
 Foreign Direct Investment brings in
  know-how and capital, opens markets
 SMEs create wealth and generate
  employment


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An Historical perspective

 1970’s: Technical assistance and term
  finance in a context of import-substitution
 1980’s: Crisis & Adjustment
 1990’s: Micro finance & Bank restructuring
 2000’s: “Doing Business” in a global market
 Today: The need for a complete range of
  services is recognized

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A comprehensive set of services

 An enabling environment for business
     Law, administration, corruption,
 Access to financial services
     Equity; Loans; Working capital
 Business Development Services
     Feasibility studies, marketing, professional
      expertise, training


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Donors have responded
 Interventions are along these lines:
 World Bank Group instruments
     Policy Advice (Private Sector Assessments)
     Business Development Services
     Project finance
 EU instruments:
     Programmes: EBAS, Diagnos, Pro€invest
     European Investment Bank (EIB) -IF
     Centre for the Development of Enterprise

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Lessons learned

 Assisting SMEs is both staff intensive
  and very costly ( 1€ for 1€ invested)
 No one has found the magic bullet:
     Read ex-post evaluation reports
 Implementation is the key to success
 Think global, act local
 Don’t give up! Time is of the essence

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  About CDE

 The Heritage                         The Vision
     30 years of experience               Intervene through
     Cotonou (CDI => CDE)                  sector programs for
     A clear mandate                       greater impact
          BDS, no €, little policy        Provide an integrated
                                            package of services
     Limited resources
          € 130,000 / ACP country
                                           In the context of EPAs,
                                            support private sector
     Management of Pro€invest
                                            efforts to improve
     A new leadership                      competitiveness

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        CDE
        CDE                                              Work Programme 2006

              Sectoral Programme implementation
 Central Africa               West Africa                      East Africa
      ICT                              ICT                          Fishing & Aquaculture
      Forestry & Wood                  Forestry & Wood              Fruit & Vegetables
      Fruit & Vegetables               Fruit & Vegetables           Textile and Clothing
      Agro-industry                    Agro-industry                Leather
      Construction /                   Environment                  ICT
       Building Materials               Textile and Clothing         Tourism
      Tourism                          Construction /               Transport / Energy /
      Transport / Energy /              Building Materials            Water
       Water                            Tourism
                                        Transport / Energy /
                                         Water

 Pacific                       Caribbean                       Southern Africa
      Tourism                           ICT                         Aquaculture
      Fish                              Forestry & Wood             Textile and Clothing
      ICT                               Environment                 Fruit & Vegetables
                                         Maintenance                 Environment
                                         Tourism

       Sectoral Programme Approach           >>> Implementation                    12
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CDE assists about 1000 ACP
     enterprises/year

                  The Pacific                 West Africa
                     10%                        20%
 Central Africa
     15%




                                                            Southern Africa
 The Caribbean                                                   19%
      18%
                                East Africa
                                   18%

				
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