Compiled by Edward Kakumu Communications Ambassador, 25th May 2023
To commemorate Africa Day, the SME Founders Association organized a dialogue centered around the African Continental Free Trade Agreement (AfCFTA). The purpose was to raise awareness among small and medium-scale entrepreneurs, who are members of the association, about the implications and advantages of this transformative agreement.
Leading this discussion was Madam Kyesubire Greigg, the Global President of the Founders Association, who invited Victor Otieno, the Chief Officer for Digital Economy and Start-Ups in Nairobi City County. Mr. Otieno’s role was to explore the immense potential and benefits of this game-changing agreement.
The Global President began by highlighting the African Union (AU) as the primary advocate for African unity. She emphasized the AU’s role in promoting regional economic integration, and efforts to simplify trade within the continent. She introduced the AfCFTA as a crucial AU policy that aims to regulate and reduce trade tariffs among African countries, ultimately fostering economic development in Africa.
Echoing this sentiment, the Chief Officer emphasized that the vision behind AfCFTA was to empower SMEs to expand their markets and achieve sustainable livelihoods. He shared staggering statistics, revealing that Kenya alone has 7 million SMEs, with 5 million of them operating informally. Furthermore, 90% of all SMEs are micro-sized, and the sector predominantly focuses on wholesale and retail businesses.
Singling out overreliance on developed countries to supply finished goods, this is what has led to a “supermarket economy” prevalent in East Africa, and across the continent.
He went on to assert that AfCFTA presents a transformative approach to overcome this “supermarket economy” model. Africa’s strength lies in its people’s ability to trade within the continent, prioritizing industrialization, manufacturing, logistics, and innovation while emphasizing high-end value addition for its raw materials.
However, despite the provision of special considerations for SMEs and women within the agreement, Mr. Otieno emphasized the need for African countries to go beyond these provisions and critically assess whether they are merely supporting existing trading practices or empowering these groups to venture into sectors where they can add greater value.
Further, Mr. Otieno acknowledged that investing in research, technology, and innovation has the capacity to address socio-economic challenges in Africa. He mentioned the operationalization of the Africa We Want 2063 Plan by the AU, along with specialized plans focused on science and technology, as part of the ongoing efforts to find innovative solutions to Africa’s pressing issues.
Mr. Otieno urged SMEs to continue familiarizing themselves with AfCFTA, emphasizing the necessity of a radical mindset shift for Kenya and Africa as a whole. African needs to transition from a “supermarket economy” to become producers, processors, and capturers of significant value for their people. SMEs should seize the transformative opportunities offered by AfCFTA.
In conclusion, this AfCFTA dialogue was supported by the SME Founders Association to shed light on the agreement and its impact on small and medium-scale entrepreneurs. The dialogues provide a platform for insightful discussions, knowledge sharing, and networking opportunities with industry experts, policymakers, and fellow entrepreneurs.
To further engage in such conversations, we invite you to join us for future AfCFTA Dialogues held every last Thursday of the month.
Participation helps you gain a deeper understanding of AfCFTA’s provisions, its implications for your business, and how to leverage on opportunities it presents. We equally look forward to your contribution of ideas, success stories, challenges and fostering a collaborative environment that fuels innovation and growth. Together, we aspire to seize the potential of AfCFTA and accelerate economic development across the continent. Together, we can shape the future of Africa. Together, we can build a prosperous and united Africa.