African governments must introduce polices and regulations that reduce the costs of doing business especially for small and medium-scale enterprises (SMEs) on the continent, the Alliance for a Green Revolution in Africa (AGRA) has said in a report.

The 2019 Africa Agricultural Status Report (AASR), report stated that SMEs record growth when favorable policies and infrastructure are in place.

Such policies, according to the report, include cross-border trade liberalization, reduction of double taxation and regulations to reduce corruption.

“The AASR calls for several key policy actions including Public investment in infrastructure focused on priority needs: building wholesale markets and roads, improving ports and extending electrification and broadband coverage. Infrastructure investments that benefit the spontaneous clustering of SMEs have the most impact, greatly supporting the ease of doing business.

“Policies and regulations that reduce transaction costs and policy risks. SMEs most frequently invest in growth when favorable policies and infrastructure are in place. Such policies include cross-border trade liberalization, reduction of double taxation and regulations to reduce corruption.

“It is also essential to reduce bureaucracy, especially in areas such as registering new fertilizer products, approving new improved seeds or levying taxes on primary inputs that make the cost of access so much higher.”

“Governments have a responsibility to protect SMEs and consumers from substandard products be it farm inputs like seeds, fertilizers and pest and disease control products or food products going to the market.

“Advancing and enforcement of appropriate policies and regulatory instruments to guide the SME landscape in Agriculture is the critical role that governments must play.

“This will protect farmers’ investments, expand the use of quality seed and fertilizer, increase output, protect consumers and will increase the ability of SMEs to compete for regional and global markets.”