SMEs and Economic Development: Global and African Perspectives

SMEs are the bedrock of the global economy. For example, on average, 60% of the global gross domestic product (GDP) is contributed by SMEs (Organisation for Economic Cooperation and Development (OECD), 2017a). Most importantly, SMEs contribute to economic development through a number of channels which inter alia include exports, job creation, reduction in inequality, and poverty eradication, which are key elements of inclusive growth (Mugano, 2024; OECD, 2017a). Studies by Beck et al. (2005), after controlling other determinants of economic growth, revealed a robust positive relationship between economic growth and the relative size of the SME sector and economic growth.