Small businesses are the missing piece in Southern Africa’s integration project
President Cyril Ramaphosa named them directly. Speaking at the University of KwaZulu-Natal days before the 46th SADC Summit formally convened, he said that “Southern Africa’s industrial revolution will ultimately not be driven by the large conglomerates listed on stock exchanges but by the tens of thousands of small and medium-sized businesses that bring innovation, agility and competitiveness to the economy.” The observation is both compelling and daunting. It points toward a direction the region should pursue, yet it demands a fundamental shift in how regional integration is conceived and pursued.
The 46th SADC Summit drew attention to grand questions about how 16 countries might finally translate regional cooperation from paper into practice. Amid the focus on larger strategic concerns, a more fundamental question went largely unexamined: who is this integration actually meant to serve, and where will its economic foundation really come from?
The challenge is straightforward. Small and medium-sized enterprises operate in a regional economy that grows progressively less welcoming the moment they attempt to expand beyond their home markets. SADC has assembled considerable cooperation machinery over three decades, and dismissing that work would be unfair. Yet the organization has maintained a consistent habit of imagining growth flowing downward from state agreements and from firms already large enough to exploit those arrangements. Small businesses appear in policy documents, certainly, but rarely as the central economic engine around which the broader integration project should be designed, despite what the actual composition of the regional economy suggests.
The numbers tell a striking story. SMEs represent more than 90 percent of business establishments across SADC and account for more than 60 percent of employment. Their presence in cross-border commerce, however, remains remarkably thin. Their contribution to regional exports stands at roughly 12 percent, a figure that looks particularly weak against the European Union, where SMEs directly account for approximately 34 percent of exports and contribute as much as 58 percent when their role in supply chains feeding larger exporters is included. Even ASEAN, whose economies offer a more relevant comparison for Southern Africa in several respects, draws close to 30 percent of its exports from small and medium-sized firms.
A more focused effort to address this gap has begun to take shape. SADC’s SME Development and Competitiveness Strategy, adopted in Madagascar last year and now guiding regional work through 2029, represents the most comprehensive attempt yet to consolidate scattered SME development initiatives into a unified regional framework. The strategy targets improvement of the policy environment for SMEs, strengthening of entrepreneurship and skills development, expansion of technology access and support infrastructure, creation of additional market entry routes, and enhanced access to finance. Properly executed, this approach could meaningfully improve conditions for SME growth across the region, though it would still represent only a partial solution.
The more transformative shift would require rethinking how SADC’s economies relate to one another. Rather than viewing neighboring markets as competitors for identical opportunities, the region could begin treating them as components of a larger productive system where different capabilities reinforce each other. Currently, progress tends to be filtered through a nationalistic lens, with each government working to deepen its own industrial base and attract investment according to its own priorities. This logic is understandable given the employment and growth pressures each country faces independently, but it often results in 16 markets attempting to replicate the same capabilities in parallel and in competition, when some of what they are building already exists elsewhere in the region and could be deployed more effectively across borders.
The real opportunity lies in moving beyond the goal of helping a business in one country sell more into another. Instead, the region could develop genuine regional value chains in which small businesses from different markets participate based on their particular strengths, combining those capabilities into products and services capable of competing more effectively in global markets. This approach aligns with what AfCFTA will eventually require anyway, but Southern Africa has the advantage of practicing this economic behavior at a more immediate and manageable scale first. For most SMEs, AfCFTA currently feels too distant and abstract to influence their operations. Building this capacity within SADC could change that perception by offering something concrete: tangible evidence that growth across borders is genuinely achievable.
The argument for moving forward carries additional weight in an era where sovereignty increasingly depends on economic relationships as much as political arrangements. Ramaphosa emphasized in his lecture that “the welfare of our people and the sovereignty and security of our nations require that we work with greater diligence and purpose to build an integrated Southern African market.” Southern Africa will continue trading globally, and should, but there is a meaningful distinction between openness to the world and structural vulnerability to it. The more of the region’s productive activity that flows through businesses trading with each other, the less severely external shocks impact the entire system.
A more robust network of small businesses trading across SADC would not create regional self-sufficiency, nor should that be the goal. What it would accomplish is anchoring more of Southern Africa’s economic agency in the everyday operations of its own enterprises, allowing value created in one market to generate activity in another and providing the region with a more substantial commercial foundation from which to engage with the wider world. Whether the 2029 strategy delivers that foundation, or becomes another document that outlives its ambitions, remains the open question.