Revolutionizing LDC Trade: Empowering SMEs with innovative financing solutions
Top state members have converged to tackle unique challenges faced by Least Developed Countries (LDCs) at the highly anticipated LDCs conference.
One of the central issues being discussed at the conference is the Doha Programme of Action, which aims to tackle the specific requirements and difficulties confronted by LDCs in various domains including trade.
The private sector and small and medium-sized enterprises (SMEs) in the least developed countries (LDCs) face significant challenges in accessing finance. Many LDCs lack the financial infrastructure necessary to support these businesses, and investors often view them as risky investments.
The international community through the Doha Programme of Action has recognized the importance of financing for private sector development in LDCs and has taken steps to increase investment.
In the developing economy, up to 56% of the economy is in the hands of the SMEs and yet they struggle to access financing, so we are looking at how to improve the financing and to spur the indigenous businesses, where the local people are, Jacqueline Mugo, Vice President for Africa of International Organisation Of Employers told Africanews.
The pandemic has caused immense economic suffering in LDCs. For instance, Sub-Saharan Africa experienced $115 billion1 in output losses and a deep contraction of GDP in 2020. While growth in LDCs recovered slightly in 2021 it slowed in 2022 and remained subdued in 2023, below pre-pandemic growth levels.
Currently, there are 46 countries classified as LDCs, which represent the most vulnerable segment of the international community. Besides challenges such as trade financing, these countries face other global issues such as climate change, and food shortage, to mention but a few.
By the end of this conference, 16 out of the 46 countries are expected to graduate.
