Trade promotion organizations can unlock AfCFTA potential for small business
By Pamela Coke-Hamilton, Executive Director, International Trade Centre
The African Continental Free Trade Area has game-changing potential to transform Africa’s place in the world. Its success hinges on the ability of African firms to make the most of this potential.
This is why it is time to promote the organizations that support businesses to trade.
Small businesses – which represent at least 80% of Africa’s employment and 50% of its GDP – are more competitive when they have access to networks and market information from these business support organizations.
Businesses are three times more likely to export when they engage with such organizations, according to our SME Competitiveness Surveys in 16 countries.
Globally, the share of firms with difficulty accessing information and benefits during the COVID-19 pandemic dropped from 42% to 28% when working with these organizations, according to our SME Competitiveness Outlook. This shows the impact that strong business support organizations can have.
In Africa, the expertise of national trade promotion organizations especially matters now. As supply chains stalled during the pandemic, new opportunities for trade have emerged closer to home in the past two years.
When the African Continental Free Trade Area was launched, it would have been hard to imagine this disruption. Even more than before, we need national trade promotion bodies to serve as the entry point for thousands of small businesses as firms start to tap this vast market potential.
Meanwhile, African businesses are re-evaluating their operations, skill sets and risks. Beyond the pandemic and the challenges of climate change, businesses now are dealing with the implications of rising food and fuel costs. The three Cs – Covid, climate and conflict – come together as the perfect storm, the likes of which we have not seen in the past 100 years.
As firms pivot, they seek reliable market information and secure financing as they explore new avenues. Among these are online sales and home delivery and environmentally sustainable goods and services. Many do this without enough support and guidance.
The national trade promotion organizations of Africa are a key to helping these firms build their resilience to crises and seize new opportunities.
African trade promotion bodies are building their capacity and knowledge to rise to the challenge. Evolution is critical to help firms in challenging times. The International Trade Centre works with them to develop innovative solutions to business challenges. The way forward encompasses boosting productive capacity and adding value to non-traditional exports; investing in stronger Made in Africa brands; providing reliable market and consumer intelligence; shoring up physical and digital infrastructure; and encouraging trade in services.
The World Trade Promotion Conference and Awards held in Accra on 17 and 18 May, as well as the annual meeting of the ECOWAS network of trade promotion leaders on 19 and 20 May, offer African agencies unique opportunities to share challenges and good practices with others from around the world.