RENEW recently hit the four-year mark of the five-year Accelerating Business Growth Project (ABG) in Ethiopia, a collaboration agreement with Global Affairs Canada
. The ABG project aims to support high potential, responsible small and medium enterprises (SMEs) in Ethiopia so they can attract and efficiently use finance to scale up, enabling them to play a stronger role in the Ethiopian economy. The project addresses the gap found in the capital markets in Ethiopia and in many other countries in Africa, called the “missing middle”. Learn more about the project here
With four years completed and the May 2021 finish line quickly approaching, we thought it was a good time to look back and celebrate some of the project outcomes achieved to date (these results are also represented in a visual format below):
As we reflect on this progress and these stories of impact in our 2019-2020 Impact Report
, we do so in a subdued manner recognizing the reversal of outcomes that are expected in light of the COVID-19 pandemic's severe impact on East Africa's already fragile private sector. According to ANDE
, a funding gap of $930 billion already existed for SMEs in emerging markets prior to the pandemic, and this only stands to widen. The RENEW team has been working hard to develop and deliver virtual programs directly helping SMEs respond to the challenges of the current climate under COVID-19 and providing resources and dedicated coaching to help them access much-needed funding during this time.
The economy of Ethiopia has increasingly strengthened during the last two decades as industrialization has expanded. Between 1999 and 2015, the poverty rate decreased by 7.6%
, lifting roughly 8.3M Ethiopians out of poverty. COVID-19 is putting these developmental outcomes at risk by constraining business growth and capital attraction for SMEs which will be most impacted and will require timely support in order to survive. In fact, it is estimated that 42% of all SMEs in Africa are in danger of failing within the next six months
. For this reason, we believe that programs like ABG, working to leverage capital into SMEs and training local managers to increase their capacity for scaling companies, have the greatest impact on development outcomes.