AfCFTA expands markets for SMMEs - Manake
The full implementation of the African Continental Free Trade Area ( AfCFTA) is expected to enable Small and Medium Enterprises ( SMEs) to become catalysts of dynamic and healthy industrial development.
This is because SMMEs will contribute more to the provision of much- needed jobs, income generation, and ultimately poverty reduction.
Minister of Trade and Industry, Beauty Manake said at the fifth Prosperity Africa Small Business Exporters Conference this week that the recently- established Ministry of Entrepreneurship will support SMEs in benefiting from the AfCFTA.
“Through parastatals such as the Local Enterprises Authority ( LEA) and the Citizen Entrepreneurial Development Agency ( CEDA), the Ministry will focus on the development of entrepreneurial development policy for SMEs,” she said.
The conference was hosted by Business Botswana and supported by the Pan African Chamber of Commerce and Industry ( PACCI). Manake believes that through constructive dialogue with critical stakeholders such as Business Botswana and PACCI, the growth of local SMEs will bring a positive contribution to the economy.
Manake told the business community that while the contribution of the SMEs sector to development is appreciated, it is disheartening that small businesses still face a myriad of challenges.
Firstly, it is not easy to run and grow a small business, with most of them often run by youth not making it past the first two to three years.
Some challenges include access to funding, limited management, and business skills, low integration with the medium and large- scale businesses, and market access. “Botswana was committed to trading long before the AfCFTA, because we believe trade agreements work,” Manake said, adding that multilateral, rules- based trade works as it establishes stability and predictability in trade relationships to ensure balance and fairness. Botswana signed the AfCFTA, Africa’s flagship for development in 2018. The agreement is intended to facilitate a seamless border across the continent and increase the competitiveness of products through the elimination of tariffs and favourable terms for service trade. Manake believes that full implementation of the AfCFTA would be a major opportunity to help African countries diversity their exports, accelerate growth, and attract foreign direct investment.
According to the World Bank report, the AfCFTA will guide policymakers in implementing policies that can maximise the agreement’s potential gains while minimising risks. The report, however, notes that creating a continent- wide market will require a determined effort to reduce all trade costs.
The African Union within the broader AfCFTA framework provides a vehicle to address some of the constraints of market size. The AfCFTA is complimented by a Protocol to support the participation of women and youth to effectively participate in the promises that come with the AfCFTA.
It has been shown that small businesses are critical in cross- border trade as they transverse countries to purchase goods in producing countries for resell in their economies.
Manake said at the exporters’ conference that while nurturing an infant business is fun and exciting with the promise of rewards, participation in the AfCFTA requires careful planning, hard work, sometimes long hours, and the ability to follow through with the journey during times of toughness.
She said that expanding access to market opportunities for small businesses through the AfCFTA is one of the most precious national investments any institution can ever make. “I hope other institutions and organisations will emulate PACCI’s noble example. We would like to make a call to the private sector partners to work with governments to help make this sector the main driver of economic growth, poverty reduction, and job creation and stimulate entrepreneurship to contribute to the radical economic transformation of Africa,” she said