Equity Group has launched a private sector focused stimulus package to accelerate economic recovery and resilience in the Eastern and Central Africa region.
The Recovery and Resilience plan is envisaged to provide financing of up-to 2 percent of the combined GDP of the six economies in which the Group operates.
The financing package will be availed inform of blended financing of short-term overdrafts, medium term loans and credit facilities which require long-term project and development financing.
While launching the Recovery and Resilience Plan Dr. James Mwangi, Equity Group Managing Director and CEO said, “A total of Kshs 678 billion (USD 6 billion) will be available to 5 million MSMEs and 25 million individual borrowers for the next 5 years.
The plan conceives that the 5 million businesses largely comprising MSMEs will create 50 million jobs, 25 million jobs directly and an equal number of jobs indirectly as the ecosystems of business become more cohesive and connected
Dr Mwangi said the recovery plan will have special focus on youth and women, supporting them to be the primary drivers of creating and expanding opportunities in the real economy.
Mwangi noted that under the Young Africa Works Initiative in partnership and collaboration with the Mastercard Foundation, the plan will build capacity in young people through financial literacy, entrepreneurship training and digital literacy.
To ensure that no one will be left behind, Dr Mwangi said lending to young people will be complemented with credit guarantee facilities to mitigate default through credit risk pricing model that has opened inclusive credit access to all.
“Risk based credit pricing has enabled us to adopt a transparent, all-inclusive interest rate, at the current average central bank rate that ranges from 13% to 18.5% for the lowest risk and the highest risk categories respectively,” said Mwangi.
The Regional Development Plan through recovery and resilience initiatives focuses on five thematic areas that include;
Primary sectors of Food and Agriculture, and extractive sectors
Manufacturing and Logistics,Trade and Investments,Micro small and medium enterprises,Social impact and Environmental investments.
Under the primary sectors, principally Food and Agriculture, the focus will be on unlocking productivity gains and value addition ecosystems to achieve food security for the region while increasing value creation in the primary sectors.
The plan targets agricultural transformation by enhancing value chain coordination, capacity building of smallholder farmers-anchoring them better to formal value chains, financing mechanisation and credible inputs.
A significant plank of the plan is agro processing which adds and enhances the value of agricultural exports, while processing food for easy access by an urbanising population and production of building materials to support construction and housing development.
The recovery and resilience plan seeks to leverage on productive capacities and comparative advantages to transform the region into a manufacturing hub that converts agricultural raw material into finished products for export and national use.
The plan covers value addition for all primary products including retaining value in mineral processing to export semi-finished and finished products.
The plan targets financing of in-country manufacturing and regional supply chains to replace broken global supply chains following COVID-19 disruptions.
This Dr Mwangi said the stimulus package will build regional resilience against global supply chain shocks while contributing to economic recovery and growth of the region, creating employment opportunities for young people and markets for local producers.
Focus on trade and investments will enable expansion of markets for the primary sectors of Food and Agriculture and the manufactured products, along with the realisation of investments to support growth of the two sectors.