New report: Few small firms in French-speaking Africa know about continental trade area

28 September 2021
ITC News

Only a quarter of companies recently interviewed in francophone Africa have heard about the African Continental Free Trade Area (AfCFTA), according to a new report by the International Trade Centre (ITC). But of those who do, about 75% believe it will benefit their businesses.

Promoting SME Competitiveness in Francophone Africa: From crisis to recovery through regional integration makes the case for investing in awareness, in addition to implementation, of the AfCFTA. The report is based on data from 2557 businesses in French speaking Africa surveyed by ITC and the Permanent Conference of African and Francophone Consular Chambers (known in French as CPCCAF) between May and July 2021 .

Only 6% of surveyed firms export to other African countries, and just 12% import from other countries on the continent. The voices of these firms suggests that high logistics and transport costs, along with delays and uncertainty, are the most common export barriers within Africa. The implementation of the AfCFTA, powered by investments in trade facilitation and infrastructure, has the potential to tackle some of these issues and expand intraregional trade.

The new regional trade area offers hope on a horizon darkened by slower than expected recovery from the COVID-19 crisis. More than a third of interviewed companies – particularly smaller, youth-led, informal and non-trading enterprises – are very concerned about their ability to pull through the pandemic.

Small and medium-sized firms employed on average just two-thirds of the staff they had before the crisis – and saw revenue fall by half. On the flip side, large businesses retained 94% of their workers and earned 87% of their pre-pandemic revenue.

The case for a trade-led recovery is even more relevant given that official support programmes are perceived to have fallen short. Just 12% of interviewed firms had received pandemic-related assistance from a government or business support organization. Two-thirds of those that got COVID-19-related support were not happy with the help they received.

Business support and regulations that make the best use of the AfCFTA to reduce trade costs can help these companies bounce back, the report says.

‘The pandemic is far from over for the small businesses that drive job growth and poverty reduction on the continent,’ the report says. ‘In this context, policymakers have an opportunity to address constraints and unlock exciting new opportunities for small African businesses in the months ahead.’

The report is the fourth in an annual series published by ITC and CPCCAF.  Data were gathered from companies in Benin, Burkina Faso, Burundi, Cameroon, Chad, Congo, Côte d’Ivoire, Democratic Republic of the Congo, Gabon, Madagascar, Morocco, Niger, Senegal, Togo and Tunisia.

About ITC - The International Trade Centre is the joint agency of the World Trade Organization and the United Nations. ITC assists small and medium-sized enterprises in developing and transition economies to become more competitive in global markets, thereby contributing to sustainable economic development within the frameworks of the Aid-for-Trade agenda and the United Nations’ Sustainable Development Goals.

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