The Africa Continental Free Trade Area (AfCFTA) has suggested that African countries have the potential to generate over $70 billion in trade activities.
This was disclosed by Silver Ojakol, Chief of Staff of the AfCFTA Secretariat, during the 2023 Regional Integration Issues Forum in Accra, Ghana.
Role of SMEs in Intra-African Trade
The RIIF is aimed at increasing awareness of AfCFTA’s benefits, especially for Small and Medium Enterprises (SMEs) which helps to enhance SMEs’ capacity for intra-African trade.
The AfCFTA also emphasized that significant earnings could be realized if SMEs collaborate and adopt AfCFTA principles to overcome trade barriers.
Ojakol, who was representing AfCFTA Secretary General Wamkele Mene, said:
- “If African countries unite and achieve even a one per cent increase in trade among themselves, we would generate $70 billion, surpassing the $58 billion provided by donors as development assistance.”
More Insights
The African Export-Import Bank (Afreximbank) had urged African countries to prioritize Export Trading Companies to boost SMEs’ involvement in global trade.
This was disclosed by Mrs Kanayo Awani, Afreximbank’s Executive Vice President, Intra-African Trade Bank during the Africa International Exhibition at the just concluded 78th United Nations General Assembly.
Mrs Awani also highlighted how policy bottlenecks within the African continent limited the participation of Africa’s SMEs in global value chains.
She called for strong policy support systems that would help improve SMEs’ access to regional markets and access to finance.
According to her, AfCFTA plays a huge role in implementing these policies.
- “These are particularly urgent as Africa commences implementation of the African Continental Free Trade Agreement (AfCFTA).”
What You Should Know
United Bank of Africa (UBA) partnered with AfCFTA to launch a $6 billion financing initiative aimed at boosting the growth of Small and Medium Enterprises (SMEs) throughout Africa.
This initiative is designed to provide funding access to SMEs in the Agro-processing, Pharmaceuticals, Automotive, Transport, and Logistics sectors, facilitating their expansion.
This initiative aims to deliver $6 billion in funding to eligible SMEs throughout Africa within the next three years.