Financing the primary sector in Africa.

The actions of development agencies must be mainly focus on the primary sector in Africa, to achieve any significant impact on economic growth, and eradicate social inequality.

Like a doctor providing medicine to healthy people, targeting large cap companies and well structured/performing SMEs, to provide financing will likely increase the gap between rich and poor people in Africa, where social inequality is already endemic, which as result sustain poverty. For decades, it has been the focus of financial and regional institutions as of little impact on entreprises creation, thus we have observed a growing poverty in African countries (especially Sub-Saharan Africa).

A usd 1 million turnover company can have easily access to any financing, this is the cake financial institutions are competing to share. They are eagerly self-satisfied, by presenting the results of their achievements, in impacting economic growth in Africa, with the amount of financing provided coupled with their profits; of course they are doing well, borrowing with interest to performing or underperforming companies makes money. But, since 1960, what is the financial state (and economic state, which is more politic) of Sub-Saharan African states, under the intervention of financial institutions? Africa is still poor and underdeveloped, but with MNCs on the continent that are doing very well. 

In contrary, China have achieved that (development), in such a way that small producers can supply tons of goods around the world - the country where "scaling up" must be learned is therefore China, where government actions with its financial institutions provide necessary assistance to SMEs, to produce, sell, and distribute their production worldwide. One key of their success is the performances of Chinese administration, which is one of the most efficient in the world; just opening a business account in Sub-Saharan Africa is such a mission, and it's so expensive, to this instance South Africa is far ahead, thanks to a good banking system, and improving CIPC (The government agency for companies registration) requirements and system.

As long as access to funding doesn't reach the primary sector largely, Africa can't reach any development. Well, in a banking point of view, they have to take into account risks, this is where most African governments have failed, in finding adequate and efficient ways in alleviating those risks, as financial institutions are businesses aiming to make profits, not developing African countries by taking risks, this must be African governments decision; which we can agree, it's their agenda, but the reality shows us otherwise, or they haven't found the right way to achieve so.

If an aspiring entrepreneur has to battle on his own to register his company, to get funding, to produce goods, put in place a supply chain, and find a distribution channel, in an underdeveloped country, where the slogan of the government is to create jobs, this is purely demagoguery; no wonder why we have a ministry of fighting poverty in most governments in Africa; a whole ministry can be dedicated to fighting poverty but they don't have a mandate for business creation and funding! Governments in Africa have let financial institutions to take charge for their development goals in a capitalist system which is led by profit seeking.

If a producer of casava, from his village, is able to send his production across his country's borders in Africa and worldwide, we have won the fight against poverty. Well, some might say, we need adequate infrastructures in place (factories, roads, ports, airports,...), but Pablo Escobar didn't have such (I'm not promoting crime), to supply the Unites States and the whole world from a forest in Colombie. 

Marius Yusuf C. Oula