FIXING THE SKILLS GAP: 5 WAYS AFRICA CAN HELP SMALL BUSINESSES GROW AND ADD VALUE
Africa’s small businesses have big potential, but a lack of the right skills is holding many of them back. Here is how we can start fixing that.
By Walcott Aganu
Africa sme skills gap
Small business growth in africa
Skills development for african entrepreneurs
Across Africa, small and medium-sized enterprises, the businesses most of us buy from, work in, or dream of starting, are everywhere. From the corner tailor to the tech startup, these businesses form the backbone of our economies. They create jobs. They put food on the table. They bring ideas to life. But too often, they are stuck in a cycle of survival instead of growth. They remain small not because they want to, but because they do not have the tools, knowledge, or support to grow.
One of the biggest things holding them back is something we do not talk about enough — the skills gap. It is not just that people are not learning. It is because they are not learning the right things. A business might have passion, grit, and drive, but without the right skills in its team, it cannot move forward. It cannot compete in a crowded market. It cannot meet new standards. It cannot deliver real value.
Fixing this problem will not happen overnight. But it is not impossible either. If we are serious about helping small businesses grow, we need to look beyond buzzwords and start connecting the dots. We need to rethink how we train, how we fund, how we support, and how we link businesses to opportunities, at home and across borders.
Here are five practical ways Africa can close the skills gap and unlock the full potential of its small and medium-sized enterprises.
1. Teaching the Right Skills, Not Just More Skills
Let us face it. Not every course or certificate translates into success on the job. Many training programs in Africa are too general or outdated. A young person might spend months learning theory, only to struggle with basic workplace tasks or customer service when hired.
According to the World Bank, over 60% of youth in Sub-Saharan Africa are unemployed or underemployed largely due to a mismatch between the skills they have and those demanded by the market. The African Union estimates that over 10 million young people enter the workforce each year, but only a fraction find formal employment due to lack of job-ready skills.
To close the skills gap, we need training that is tailored. That means teaching real-world, hands-on skills that small businesses use, from bookkeeping and sales to welding and website design. It also means involving business owners in designing these programs so they are not just ticking boxes but solving problems.
We also need to shift how we view vocational training. It should not be a “last resort” for those who do not go to university. It should be a respected, well-funded path to good work. Currently, less than 6% of African youth enroll in vocational education, compared to 50% in Europe.
2. Money Matters: Helping Small Businesses Access the Right Kind of Finance
Even with skilled staff, many SMEs hit a wall when they try to grow. That wall is money. Many cannot get loans or investments. And when they do, the interest rates are sky high.
A 2023 African Development Bank report states that the financing gap for African SMEs is over $331 billion annually. Furthermore, only 20% of African SMEs have access to a traditional bank loan or line of credit.
But what does finance have to do with skills? A lot. With the right funding, businesses can hire better-trained workers, invest in tools and tech, and pay for ongoing learning. Without it, they get stuck in survival mode, cutting corners and hoping for the best.
Governments, banks, and private investors need to rethink how they fund small businesses. More patient capital, lower interest loans, and business development services tied to funding could go a long way. Also, teaching entrepreneurs how to manage money and write bankable proposals is just as important as handing out the money itself.
3. It Takes a Village: Building the Right Support Around SMEs
Small businesses do not grow in isolation. They grow in ecosystems, networks of mentors, suppliers, customers, government policies, and institutions that help them thrive.
Right now, too many African entrepreneurs feel like they are going it alone. They do not know where to turn for help. There is little collaboration, and policies that are supposed to help often get stuck in red tape.
A 2022 report by the International Trade Centre found that over 70% of African SMEs cite lack of access to support services — such as training, mentorship, or regulatory guidance — as a barrier to growth.
We need to build stronger bridges between training institutions, business hubs, regulators, and the private sector. When people share ideas and support each other, good things happen. A farmer can learn from a processor. A fashion designer can link up with a digital marketer. A new business can get help navigating taxes.
Also, let us not underestimate the power of mentorship. Pairing experienced entrepreneurs with young business owners can pass down hard-earned wisdom that no classroom can teach.
4. Going Digital: Using Technology to Bridge the Gap
Digital tools can be powerful equalizers if we know how to use them. In today’s world, not knowing how to use a smartphone or access online markets is like not knowing how to read. And yet, many small businesses across Africa still operate completely offline.
According to the GSMA Mobile Economy Report, only 28% of African SMEs currently use mobile or digital platforms to operate their business, despite smartphone penetration reaching over 50% in many urban areas.
Digital technology can help close the skills gap in two big ways. First, by giving entrepreneurs access to free or low-cost online learning. Platforms like YouTube, Coursera, and local startups offer everything from marketing tips to coding lessons. Second, by helping businesses reach new customers, manage inventory, accept payments, and even track sales in real time.
The trick is making sure that digital tools are not only available but also understood. Governments and NGOs should invest in digital literacy programs and make sure women, rural communities, and older business owners are not left behind. In fact, women-led SMEs are 25% less likely to adopt digital tools due to limited exposure and training.
5. Thinking Beyond Borders: How Regional Trade Can Open New Doors
Africa’s economy is bigger than any one country. Thanks to agreements like the African Continental Free Trade Area (AfCFTA), there is now a real chance for small businesses to expand beyond their local markets.
AfCFTA, once fully implemented, is projected to boost intra-African trade by over 52% by 2035 and create over 18 million jobs, according to the World Bank.
But here is the catch: regional trade also demands higher standards. You cannot just export poor-quality products and expect success. To compete regionally, businesses need better skills in packaging, branding, compliance, logistics, and customer service.
This is where regional training programs and cross-border partnerships can help. Imagine a Nigerian shea butter cooperative teaming up with a Ghanaian branding firm or a Kenyan agritech company partnering with a Malian farmer’s union. These kinds of collaborations help everyone level up.
Governments need to make it easier for businesses to move people, goods, and ideas across borders. That includes simplifying customs, harmonizing regulations, and supporting trade fairs and expos where entrepreneurs can learn and connect.
The Bottom Line
Closing the skills gap in African SMEs is not just about fixing training centers or offering another loan scheme. It is about seeing the full picture, understanding what businesses really need, and connecting the dots between education, finance, technology, and policy.
Small businesses are already doing the heavy lifting in our economies. In fact, SMEs contribute over 80% of employment in Africa and account for about 40% of GDP in many countries. Imagine what they could do with the right skills, the right tools, and the right support.
Africa’s growth story depends on getting this right. It is not just smart economics. It is a matter of dignity, jobs, and shared prosperity.
