Speeches

Making the AfCFTA work for African small businesses

10 October 2024
ITC News

(Kigali, Rwanda) Deputy Executive Director Dorothy Tembo delivered her remarks at the high-level opening of Biashara Afrika – the second edition of the AfCFTA Business Forum.

 

Honorable Ministers;

Honorable Prudence Sebahizi, Minister of Trade and Industry of Rwanda;

Her Excellency Dr. Monique Nsanzabaganwa, Deputy Chairperson, African Union Commission;

His Excellency Wamkele Mene, Secretary General of the AfCFTA Secretariat;

CEOs, Distinguished Delegates, Ladies and Gentlemen;

All protocols observed.

Good afternoon and thank you for giving the International Trade Centre this opportunity to share a few remarks in support of Biashara Afrika and the launch of the second phase of the Guided Trade Initiative.

The International Trade Centre is a joint agency of the WTO and the UN, working to connect micro, small and medium enterprises to international markets.

This enables us to concentrate our efforts to create more competitive MSMEs, stronger business ecosystems, and better regulatory environments in Africa and globally.

This year’s Biashara Afrika has issued us with an important call to action: that we each show the courage and the commitment to invent a new future for Africa underpinned by the African Continental Free Trade Area.

To answer this call, we must ensure that the African private sector is in the driving seat to guarantee an inclusive future for MSMEs, including those led by women and youth.

There are over 50 million MSMEs across the African continent. These firms are integral to the AfCFTA’s success—and we must do everything in our power to ensure they benefit from the $22 billion in export growth potential that this trade agreement could achieve.

Yet too many of Africa’s businesses, of all sizes, are still not fully aware of all that the AfCFTA has to offer, or how to use its provisions in their work.

Only 40 percent of respondents in PAFTRAC’s 2024 CEO Survey Report said they knew and understood the agreement well—far short of where we would like to be.

And far too many—roughly 3 out of every 4 businesses—say that the agreement has had little to no impact on their firms yet.

These respondents have high expectations for what the AfCFTA could offer their businesses but will require a helping hand to take advantage of new market opportunities.

This is why ITC is making sure to scale up our support to Africa, where we already have active projects in 50 countries. Given the special importance of the AfCFTA, we have launched a corporate initiative called “One Trade Africa” which aims to empower, enhance, and enable African MSMEs and women and youth entrepreneurs to fully capitalize on the AfCFTA.

How is this being achieved?

First, by awareness raising and sensitisation. The AfCFTA must be known not just by African giants like Dangote, MTN, Oando and Jumia, but also by Africa’s MSMEs, including those that operate informally.

Second, by public-private dialogues. For the private sector to thrive under the AfCFTA, MSMEs must be at the table, sharing with governments the challenges they face when trading on the African continent.

Third, by training. The AfCFTA will not yield the desired effects if its rules are not understood, which is why together with Afreximbank we have equipped over 10,000 MSMEs on “How to Export with the AfCFTA.”

Fourth, by strengthening and connecting BSOs. African MSMEs can benefit from the AfCFTA only if the institutions within Africa’s business ecosystems adapt and deliver relevant AfCFTA services and speak as one to advocate for their interests.

Finally, by business-matchmaking. MSMEs require backing to identify, match with, and exploit new buyer and sales opportunities created by the AfCFTA.

Honorable Ministers, ladies and gentlemen: let me now focus on why ITC is here today.

As we embark on this second phase of the Guided Trade Initiative, it is time to accelerate our efforts.

For years, ITC has been fortunate to work closely with the AfCFTA Secretariat in making the AfCFTA work for Africa’s private sector.

We have partnered with the secretariat on its Private Sector Engagement Strategy, developed an AfCFTA glossary publication and mobile application, and jointly conducted a private sector mapping to review the competitiveness of African firms in AfCFTA priority value chains.

We have also surveyed regional and continental BSOs to learn what they hope to see out of this trade agreement, and what support they need, and we’ll be preparing trainings with the AfCFTA Secretariat tailored to their goals and circumstances.

These efforts are translating into better opportunities for MSMEs, as we already saw at the Intra-African Trade Fair in Cairo last year—and have taught us, especially during the Guided Trade Initiative’s first phase, what more we can do to ensure the AfCFTA delivers for sustainable development.

One of the biggest lessons is that not all companies have the information, connectivity, or other critical resources to take part in trading under the Guided Trade Initiative.

This is especially true for the smaller companies, whose participation is needed the most.

They need support designed for their priorities and situations. That’s what we, the AfCFTA Secretariat, and the AfCFTA National Implementation Committees plan to provide through tailored coaching, helping MSMEs forge connections with the Guided Trade Initiative’s national focal points, supporting trade missions, and promoting business linkages.

We’ve already seen how well this approach works in the case of Ghanaian chocolate producer fairafric who is showcasing here at the Biashara Afrika.

This June, fairafric took part in the Goodlife show in Cape Town, an event that showed them the opportunities within the lucrative South African market.

However, fairafric also realized that high tariffs could get in their way—which is why they took part in a workshop ITC was organizing with the Afreximbank and ECOWAS Commission in Accra on how they could export under the AfCFTA.

What was just as critical as the class, however, was building a relationship with local officials tasked with the AfCFTA’s implementation.

That’s why we helped connect fairafric with the Ghana National AfCFTA Coordination Office—a relationship that’s helped the company access the right forms, and support, to start exporting under the AfCFTA’s terms.

Fairafric is now at the very final stages of connecting to the South African market—and we know that more stories like this are possible, especially if we work together.

The launch of this second phase of the Guided Trade Initiative at Biashara Afrika is another milestone in a landmark year for the AfCFTA, with the adoption of protocols on women and youth, as well as on digital trade.

ITC is committed to supporting the inclusive implementation of these protocols and we look forward to taking an active role in the GTI’s second phase as the initiative expands to cover 39 African countries, additional products, and trade in services.

This will include supporting the aggregation activities of AfCFTA trading companies and putting together case studies on what the GTI has meant for MSMEs and women and youth entrepreneurs, building on the stories that are about to be shared by companies on this panel on their experiences when trying to trade under AfCFTA rules.

Finally, I would like to again thank our host country and congratulate the AfCFTA Secretariat for putting together an exciting programme that foregrounds Africa’s impressive and vibrant private sector.

I wish you a successful conference, and pledge ITC’s full commitment to working with Member States and the AfCFTA Secretariat in building on the outcomes of Biashara Afrika and ensuring a successful GTI second phase.