Access to affordable financing is one of the biggest barriers for Micro, Small, and Medium Enterprises (MSMEs) in Africa. In Nigeria, MSMEs are facing an annual credit gap of approximately $158 billion, this limits their capacity to scale operations and invest in innovation. Similarly in Uganda, the small businesses constantly struggle to secure loans. Around 70% of the entrepreneurs in the country have voiced that financing is one of their biggest constraints. Ethiopia’s MSME sector faces challenges as well, especially in the export-driven industries like leather and textiles and this is where high interest rates are an issue. The New Development Bank (NDB) could be helpful in these constraints by offering financial products that are MSME- specific. Credit guarantees, low interest loans and venture capital funding are a few examples. This could be helpful for Ethiopian manufacturers to modernise production facilities, and for Ugandan agribusiness to create farming techniques that are climate-resilient.
Technology transfers are an equally important opportunity for MSMEs in Africa within the framework of BRICS. The “Internet Plus” strategy in China has changed digitisation amongst small businesses and in India, the Digital India initiative has produced a thriving ecosystem for tech-enabled enterprises. Ethiopia can collaborate with China to introduce smart technology for its industrial parks like the Hawassa. Nigeria has a growing fintech sector and it could benefit from partnership with India for mobile payments and banking and digital payment systems. Uganda could integrate advanced technologies from Brazil to minimise post-harvest losses and enhance crop yields.
BRICS offers significant trading opportunities for MSMEs in Africa especially through intra-BRICS trade which in 2024 surpassed $5 trillion. Harmonising regulatory frameworks and simplifying trade policies could grant African policies opportunities to export goods effectively while having access to affordable imports. In South Africa for example, the wine industry could benefit from preferential trade agreements, expanding it to Indian and Russian markets. Coffee producers in Ethiopia could tap into the growing demand for coffee in China and textile manufacturers in Nigeria could explore partnerships in Brazil to export high-quality fabrics.
Skills development and capacity buildings are critical to empower MSMEs in Africa. In Egypt, MSMEs account for over 43% GDP, entrepreneurship lacks technical expertise in finance, management and technology. Well established institutions in South Africa like the Small Enterprise Development Agency (SEDA) could take part in resource sharing across Africa. Uganda and Ethiopia could benefit from capacity-building initiatives that are tailored for agricultural modernisation and industrial processes.
Women and youth are represented disproportionately in the African MSME sector, and this makes their inclusion an important component of sustainable development. Women in Nigeria own over 40% of MSMEs and yet they face systemic challenges like mentorship and access to credit. Programs designed after Brazil’s "Empreendedoras" initiative which is aimed at empowering women that are entrepreneurs through financial assistance and training could be adopted locally to address these gaps. Uganda with one of the youngest populations in the world could facilitate youth entrepreneurship through startup investment.
Despite the opportunities BRICS presents, many challenges still need to be addressed for MSMEs in African nations to thrive. Political instability, infrastructure deficits and corruption are still significant barriers. For instance, the power shortages in Nigeria force MSMEs to depend on expensive diesel generators and this causes a raise in operational costs. The war in the Tigray region in Ethiopia has significantly disrupted supply chains making market access limited for businesses operating in the affected areas. The BRICS 2025 Strategy presents a transformative opportunity for African MSMEs to integrate into a dynamic global economic framework, fostering innovation, trade, and sustainable development. Through leveraging the bloc’s focus on digital transformation, infrastructure investment, and inclusive growth, African MSMEs can overcome traditional barriers.
Sesona Mdlokovana
Associate at BRICS+ Consulting Group UAE & African Specialist