Unlocking Growth Opportunities: SMEs in the AfCFTA

The Africa Continental Free Trade Agreement, ACFTA, promises to unlock a vast market of 1.3 billion people, offering tremendous growth opportunities for SMEs. However, challenges such as infrastructure funding, limited access to finance, and regulatory barriers, among others, still persist. To explore this further, CNBC Africa's Derrick Muhangi filed a report.' Now, let us listen in. The African Continental Free Trade Area promises a single, unified market of 55 countries and 1.3 billion people, unlocking vast opportunities for small and medium-sized enterprises to drive growth, innovation, and job creation. Behind me, you see the vibrant exhibitors, innovative small business owners, and passionate entrepreneurs who embody the spirit of African enterprise. They, like millions across our continent, are eager to tap into the transformative power of the African Continental Free Trade Area. We don't just produce only natural soaps. We do also mine business cars across natural soaps, so that it's natural creams. Even though we see ourselves very small now, given ourselves like five to ten years, it would be very big companies that actually will compete with very big companies still on the global market. In as much as we produce in Africa, we all know that logistics problems exist within different countries. My experience exporting to Nigeria basically cuts across most businesses within Africa. And that is why I feel like the AFTA program is very important, at least to address this problem. For example, the AFTA program in Ghana actually educates us on the things that we have to do to basically go over all the challenges that we have as business people. And with this, I feel like as time goes on, if we all do our part, we'll be able to basically overcome some of the challenges. It's not easy, though. It's not easy. But I feel like as time goes on, we'll all be able to overcome the challenges. The Indo-Native entrepreneurs are utilizing ancient African techniques to craft natural soaps and cream products for a growing market. With visions of global competitiveness, they are lavishing the African continental free trade area to expand their supply chain and value chain across neighboring countries. The nice thing about the African continental free trade area is that we have an opportunity of supply chain, value chain is being increased throughout our neighboring countries. So within the neighboring countries, we've been able to supply some of our nearby countries like Namibia. The trade barriers are quite a lot. First of all, the infrastructure, which is not necessarily there in some countries, makes the product to be very expensive. The logistics are not easily available. It's only one company that will be doing logistics from one country to another. So that means that we have a problem of price, which affects our products. Now our products have become too expensive. So in terms of even the non-trade barriers, you go to a place, they say clearance, after clearance, there's another clearance that is not written down. So now costs us a lot. It's a very challenge. It's a big challenge for some of us because now it makes our products to be very expensive. For example, you'll get, for example, nuts from, let's say, from Malawi. I'm just making an example, nuts from Malawi. Then the roads, because there's borders that you have to go through before you get to South Africa, even if it's to do by road. So for each and every border, there's a thousand something you must pay and a person that you must pay. And you see, it's a lot of money. So now the cost of transport becomes more than the price of the product itself. Now, which means that you can't achieve your purpose nicely because we are about health, nutrition, food security. And we are about ensuring that we bring cost-effective solutions to people who want to eat and snack healthy. So it becomes that kind of a problem. As small entrepreneurs grow and expand their businesses in Africa, they are still met with key challenges. I think one of the core challenges is access to capital. Just generally, there's little trust for young entrepreneurs on the continent. For Africa, it's movement of logistics. You know, moving goods from one point to another is quite difficult to navigate. So hopefully, we see some improvement as we grow within the African Union space. I think it would be that every country begins to understand that we have to be one market. And if we really want to compete with the world, we have to come to the place where we understand if your economy is small or it's large, you have to come on board and create healthy competition. I believe competition can breed innovation and it can breed growth. So just an appeal that representatives of the various countries at the African Union should consider, convince their cabinets, individuals in charge of industry and trade to consider, economic analysts in their various countries to consider joining. And secondly, also strategic partnerships. It's one of the things we encourage the secretariats for AFTFTA to consider, like, you know, really fostering that, especially within the logistics industry. I see DHL, McDonnell and other companies who are now taking the forefront to want to partner and then see how they can support small businesses on the continent. I think it's a step in the right direction to foster more such partnerships, which will really go a long way to support businesses across the continent. With the African continental free trade area, African businesses can now tap into the vast continental market and usher in a new age of trade in Africa. I'm excited for the dream of Africa, the new Africa. And as a company, we provide strategy that is integrated with international standards. This is a time actually for Africa to understand that this is no time to sleep. It's a time to actually think about the new ways we can actually tap this market. How do we need to design a product so that they can actually have the African identity that we can be proud of and can also satisfy the desires of customers that we have in Africa and beyond? One thing that I've seen, I really commend, therefore, that has been done from the beginning, because being able to coordinate the political will of different governments, it's a big achievement for every business owner, including the entrepreneurs that are wondering, where should I start from? Now, before you could say, OK, I could be restricted by the size of my market. But now with this opening of the markets to include other African markets that are part of the CFTA, it means that it means now that this is a chance for the private sector to innovate in terms of understanding what value do you need to bring to the marketplace and how do you protect that value? Now, when you look at international trade, there's something that we need to consider. One is compliance. Compliance is not cheap for SMEs or micro, small and medium enterprises. They don't have the resources that they need to be able to be competitive. It means that, of course, we need to find a mechanism that allows small businesses actually to be supported. Part of the work that you are doing is, of course, allowing, de-risking some of these businesses, because when they comply, of course, with the support of the different stakeholders, it means that now the cost that is high, that is not within reach, at least at the beginning, can be kind of lowered by the support that can be provided by the different governments and other stakeholders, so that small businesses now have a chance of, one, meeting the market requirements in different markets, meaning that now they can design their products without worrying about how am I going to have it acceptable in this market. Our exploration has highlighted the voices and views of the small enterprises underscoring the need for targeted support and enabling environments. As we look ahead, the African continent of free trade areas' potential will be realised through collaborative efforts to address these challenges and analyse SMEs' full potential. I'm Derek Mohandji for CNBC Africa from Kigali, Rwanda.

The AfCFTA promises to unlock a vast market of 1.3 billion people, offering tremendous growth opportunities for SMEs. However, challenges such as infrastructure funding, limited access to finance, and regulatory barriers, among others, still persist. To explore this further, CNBC Africa's Derrick Muhangi filed a report.

SMEs in the AfCFTA: Challenges, opportunities and the way forward

The AfCFTA promises to unlock a vast market of 1.3 billion people, offering tremendous growth opportunities for SMEs. 

SMEs in the AfCFTA: Challenges, opportunities and the way forward

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SMEs in the AfCFTA: Challenges, opportunities and the way forward

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