https://www.weforum.

org/agenda/2019/05/AfCFTA-africa-continental-free-trade-area-entrepreneur

The Africa Continental Free Trade Area (AfCFTA) is set to launch on 30th
May. If every African country joins, it’s expected to be one of the world’s
largest single markets, accounting for $4 trillion in spending and
investment across the 54 countries.

The AfCFTA will give entrepreneurs across the continent access to a much
larger market. It's therefore important that young African entrepreneurs
understand how the AfCFTA could benefit them and their ventures. As
awareness is raised, entrepreneurs should begin crafting new trade roadmaps
for their businesses, informed by the agreement.

It's envisioned that the free trade area will lead to increased competition,
innovation and prosperity for Africa’s people in the long term. But for the
AfCFTA’s gains to be realized, entrepreneurs and policy-makers must be
aligned. They must engage with each other to provide structure and clarity
 around how goods and services will move, and around the benefits that the
agreement will bring to business. These discussions between entrepreneurs
and the trade ministries of their country will also enable the review and
updating of national trade policies, discussions which will benefit both the
government and business communities.

Digital platforms are increasingly making trading easier by promoting digital,

financial and social inclusion. This can lead to significant growth in business
that can be generated domestically and across the continent. It must be noted
however, that for a business to succeed outside its borders, it must first
receive adequate local support, including favourable financing options,
business support services, training and a conducive environment that
promotes growth.

In some African countries, entrepreneurs still find it difficult to access

adequate government support, as well as effective platforms on which they
can co-design alongside government. This means they are lacking the
environment to thrive. This has led to many entrepreneurs failing to scale their
operations, and in some cases being relegated or forced to operate in the
‘informal sector’.

The consequences of failing to address entrepreneurs’ concerns locally will

result in failure to access the gains of the AfCFTA, and will lead to a
burgeoning informal sector. According to the International Labour
Organization (ILO), it is estimated that the informal sector accounts for more
than 66% of total employment in sub-Saharan Africa and 52% in North Africa.
If collaboration increases between entrepreneurs and their governments, with
the state and private sector supporting entrepreneurs by offering training,
access to technology platforms and financing, operators in the informal sector
will transition to the formal one, increasing their chances of success in the
larger market.

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 This formalization will also bring other benefits, such as improved quality and
quantity of employment, increase in fiscal revenue and overall improvement in
quality of life. Governments need to begin investing in national support
programmes for SMEs to build their capacity and provide business growth, so
they are able to produce export-ready products and services for a much larger
market.

At Future Africa Forum, through our Intra-Africa Trade expert network, we are
currently working on informing, motivating, enabling and providing access to
networks. We are helping to facilitate trade and investor missions for young
entrepreneurs on the continent who are looking to expand their markets. We
have seen the amount of talent and potential that exists in Africa, but realise
that without a platform, it will be difficult for some of this talent to scale beyond
their communities, let alone the continent. However, before we can discuss
scale, we must ensure that:

- Entrepreneurs are adequately trained in selling their products and services

to international markets

- Entrepreneurs are well informed of export procedures, including customs

processes and quality requirements

- Entrepreneurs understand financing facilities available for export businesses

- Entrepreneurs produce goods and services that are in demand beyond their
communities

The International Trade Centre has developed a trade accelerator for young
entrepreneurs which, if domesticated, could hugely benefit a significant
number of people on the continent. It covers four key business support
categories: training, coaching/mentoring, institutional support and facilitating
access to finance.

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At a regional level, organizations such as Trade Mark East Africa, are also
playing a huge role in increasing access to markets, enhancing the trade
environment and improving business competitiveness within the East African
region.

As we look at the benefits of the AfCFTA for young entrepreneurs, it is

important that we keep gender equality in mind. Women have been known to
be the leaders in cross-border trading, with women in the SADC region
constituting 70% of informal cross-border traders. Women should therefore
play a leading role in articulating the challenges that they face, as well as the
assistance that they require across the value chain, to enable them to become
more efficient and prosperous in their ventures.

The movement of goods and services involves an entire value chain. This
value chain involves: work and services that take place within the country of
origin; the movement and transport of these goods and services using various
channels; and clearing processes at ports of entry and exit that lead to
delivery and payment of high-quality services that arrive on time.

With further alignment and better coordination of this value chain, we should
hopefully begin to witness an increase in intra-African trade. Other issues that
need to be addressed include safeguarding against potential xenophobic
threats which we have already seen manifesting in certain parts of the
continent, and ensuring access to social services, such as healthcare, for
entrepreneurs as they travel across borders.

Technology is integral to the movement of goods and services, especially with

the introduction of pan-African business-to-business (B2B) and business-to-
consumer (B2C) platforms. Examples including Jumia, Kenya’s MPESA and
Zimbabwe’s ECoCash already show that Africa is truly becoming one market.