Small and medium enterprises (SMEs) are critical to economic growth in Africa. Financing is a challenge for SMEs in Africa, but other factors are also critical to SME growth on the continent. A healthy and expanding small business segment in Africa increases employment, broadens the tax base, grows national revenue and frees African governments to fund social and economic infrastructure. Although small and medium businesses (SMEs) account for 95% of all registered businesses and contribute about 50% to the total GDP of sub-Saharan countries, entrepreneurs still face significant obstacles to growth and prosperity, which go beyond the traditional barrier of acquiring finance. Addressing their needs and ability to reach their potential is essential to creating a prosperous Africa. About 40% of SMEs in developing countries grapple with access to finance. This indicates that the financial sector generally struggles to understand and serve SMEs. Balanced against this must be that information irregularity in financial markets has left many small enterprises knowledge poor. Lack of available collateral or cash flow data means financial service providers often view SMEs as too risky. Another critical factor impacting SMEs is bureaucratic onboarding procedures. And, vetting and financial procedures can also place additional pressure on small businesses, especially when they cannot access the warranties, assets and resources that some financial institutions require. A lack of infrastructure isolates SMEs from markets, opportunities and access to capital. Business owners, because of unaffordable wage costs, are often forced to undertake tasks that are not within their skill sets. Inevitably, aspects of the business...

AFRICAN Union member states have been called upon to adopt policies which encourage intra-African trade in food production by among other things, removing Non-Tariff Barriers (NTBs). It is said that NTBs currently make imports from outside the continent costly, compared to locally produced food. AU member states were further urged to invest in irrigation agriculture by moving away from the reliance on rain-fed agriculture. Equally, African countries were called upon to adopt policies that motivate the youth to take part in agriculture to ensure increased production and reduce food insecurity. These were some of the resolutions of the 14th African Union High Level Private Sector Forum that was held at the Kenyatta International Convention Centre in Nairobi, Kenya from July 10th – 12th, this year. The forum further encouraged AU Member States to build resilient food systems which are climate resilient by employing technologies which promote investments in technologies that also address post-harvest losses. The three-day forum vouched for Public-Private-Partnerships (PPP) to promote partnerships for ensuring sustainable financing and management of national and regional agro-industrial parks and regional value chains. Member states were encouraged to align their agribusiness priorities in line with the Malabo and Maputo declarations and the Comprehensive African Agriculture Development Programme (CAADP). The forum resolved that investments in transport and logistics should be supported to ensure agribusinesses are scaled up and sustainable to ensure food security in the African continent. On ensuring access to reliable and affordable energy supplies, the forum urged AU member states to mobilise additional financing...

Ministry of Trade and Industry and the Common Market for Eastern and Southern Africa (Comesa) have admitted non-tariff barriers (NTBs) continue to affect trade, a development that has compelled the two institutions to engage an extra gear to protect traders. Lately, cross border businesses in Malawi have singled out NTBs such as excessive import documents or unjustified packaging requirements as one of the key challenges in intra-Africa trade, ultimately affecting business profitability and revenues. But director of trade in goods in the Ministry of Trade and Industry Charity Musonzo in an interview on the sidelines of an awareness workshop on NTBs reporting mechanisms on Tuesday said the ministry has taken the lead to ensure that traders are protected. She said: “NTBs are a big hindrance to trade. Most challenges include arbitrary charges. We are, therefore, participating in the tripartite arrangement which is a grouping of Comesa, Southern Africa Development Community and the Eastern African Community in which every trader is required to report the NTBs through the online system. “We have focal points at the Ministry of Trade and Industry, Malawi Investment Trade Centre and the Malawi Confederation of Chambers of Commerce and Industry to collect NTBs and send them to the secretariat to resolve the same.” On her part, Comesa senior customs affairs officer Balness Sumani also observed that the prevalence of reported and unreported NTBs, have partly been responsible for the constrained intra-regional trade. She said: “Currently, the rate of intra-regional trade is minimal, at seven percent, partly...

The inaugural chief executive of Trade Catalyst Africa, Duncan Onyango, spoke to Vincent Owino on the reasons behind the formation of the commercial arm of the non-profit Trademark Africa. What are the most pressing issues facing trade in Africa today? It is a fact that as Africans, we trade more with other countries outside the continent than with each other for a variety of reasons. But the main one is because the trade infrastructure has a lot of gaps in it. We have inefficient ports, poor roads, and border crossing takes much longer than it’s supposed to. The trade infrastructure gap is estimated at between $130 billion-$170 billion each year, with no sign of the funding gap diminishing. Also, the regulatory environment in many countries is not conducive. All these, combined with the non-tariff barriers, the net effect is the low trading volumes and export capabilities. Trademark relies heavily on donor funding for its projects, but the money from donors is not enough. We must appreciate the fact that a lot of money is needed, because we are starting from zero when it comes to building trading and export capability. We see a time when there will be less donor money, so the question we need to ask is: who else can pay to build these infrastructures we need for trade? If you turn to governments, their budgets are shrinking and not enough revenues are coming in. So, because the need is still there, we believe that the funding needs...

The meeting brings together Regional Economic Communities (RECs), Regional Mechanism (RMs) and member states to review the progress of the continental integration agenda. Egyptian President Abdel-Fattah El-Sisi is participating in the summit as the current chair of the New Partnership for Africa's Development (NEPAD). The meeting will explore ways to enhance integration, including promoting free movement and the African passport, as well as connecting infrastructure and financial markets. It will also explore establishing a common African market to accelerate trade, agriculture, establishment of businesses, and transfer of skills in Africa. To accelerate these efforts, the meeting will discuss the division of labour between the AU, RECs, RMs, and member states, anchored on the principles of subsidiarity, complementary, and competitive advantage. The division of labour is centred around six pillars: policy planning and formulation; policy adoption; policy implementation; monitoring, evaluation and reporting; resource mobilization; and partnerships. Also on the agenda will be the financing of Agenda 2063, focusing on Africa’s economic recovery and the implementation of initiatives to address challenges in agriculture, infrastructure, debt, climate change, security, energy, and health. This year’s meeting will be preceded by the meeting of the AU’s Executive Council on 13-14 July. The ministerial meeting will discuss the implementation of the African Continental Free Trade Area. It will consider next year’s theme (education); budget matters; African candidacies to international bodies; treaty ratification and implementation; the status of institutional reforms and Agenda 2063, among others. The Executive Council will also appoint some members of the African Commission...

The Council of Ministers of the Economic Community of West African States (ECOWAS) endorsed a regional e-commerce strategy for the organization’s 15 member nations on 7 July. The strategy will boost e-commerce in West Africa through specific measures responding to the needs of ECOWAS, identified by UNCTAD’s recent eTrade readiness assessment for the region. “The newly endorsed strategy is the beginning of a transformative journey, aimed at bridging the regional digital divide and boosting e-commerce development,” said Shamika N. Sirimanne, director of technology and logistics at UNCTAD. “It is a milestone that UNCTAD is proud to have supported, in the framework of our longstanding partnership with ECOWAS,” Ms. Sirimanne added. Multistakeholder process Developed through a multistakeholder and participatory process, the strategy aims at accelerating structural change and development, and fostering regional integration through economic diversification and job creation. “ECOWAS is committed to increasing the adoption and use of e-commerce to promote the implementation of the ECOWAS Vision 2050 for an inclusive and sustainable development for the region,” said Massandjé Toure-Litse, commissioner for economic affairs and agriculture at the ECOWAS Commission. “The e-commerce strategy will support the digital-driven structural transformation of the economies of Member States, and deepen regional trade integration,” the commissioner added. Boosting economic resilience ECOWAS member nations are Benin, Burkina Faso, Cabo Verde, Côte d’Ivoire, Ghana, Guinea, Guinea Bissau, Liberia, Mali, Niger, Nigeria, Senegal, Sierra Leone, The Gambia and Togo. Among them, 11 are least developed countries that are generally more vulnerable to external shocks. The new strategy seeks to mitigate such...

Despite the potential of digitalisation in achieving regional integration, Africa experiences relatively slow adoption. Delays in clearing goods at countries’ borders and ports impede their timely and cost-efficient movement across the continent. Sub-Saharan Africa ranks lower in the border logistic index than the rest of the world. Import and export goods get delayed at borders due to administrative burdens and paperwork. One way to mitigate these challenges is by digitalising custom operations and clearance for efficiency and timeliness. Over the last ten years, digitalisation has become a driver of economy and innovation in the financial and telecommunication sectors in Nigeria, South Africa, Kenya, and Egypt. There is enormous potential in leveraging digitalisation to scale up the Africa Continental Free Trade Agreement (AfCFTA) and address barriers to trade across the continent. The free movement of goods and persons across borders is critical to the success of the AfCFTA. The ability of goods and people to move across borders efficiently characterizes a strengthened regional chain. AfCFTA heavily relies on moving people and goods across borders and ports. Goods sometimes pass through different borders as they undergo various value-addition processes before becoming finished products. A country’s readiness to trade is evident in the ease at which people and goods pass through its borders/ports. As observed across African borders, administrative issues like obtaining permits and clearance procedures are often daunting and time-consuming. These processes involve too many touchpoints in document verification. The long process often results in additional costs to importers and exporters. The...

Nairobi — The United Kingdom's (UK's) trade body, the Institute of Export & International Trade (IOE&IT), has opened its first office in Nairobi with a focus on trade and training. The Kenyan office will also act as an expansion pad on the African continent. Its entry into the country follows the signing of the UK-Kenya Economic Partnership Agreement. IOE&IT has developed and delivered training, education, and consulting services on the continent. The opening of the office follows the successful delivery of educational courses, with IOE&IT delivering qualifications in Kenya, Ghana, and Nigeria. "This new office, our first in Africa, is an exciting development of our growing partnership," IOE&IT Director General Marco Forgione said. "I look forward to using all our knowledge, expertise and experience to support Africa's entrepreneurs grow their intra-Africa and international trade." The launch of the event took place at the Deputy British High Commissioner's Residence (Air House), with Josephine Gauld, Deputy British High Commissioner to Kenya and Permanent Representative to the UNEP and UN Habitat, in attendance. The Institute has worked with the International Trade Centre, along with the Ghana Export Promotion Authority, the Nigerian Export Promotion Council, and the Kenya Export Promotion and Branding Agency. In partnership with TradeMark Africa and the IOTA Foundation, IOE&IT has developed an interoperable digital supply chain infrastructure, the Trade and Information Pipeline (TLIP). IOE&IT has successfully led a Consortium of experienced technology, traders, logistics, and supporting partners to test a pilot scheme to implement improvements on end-to-end supply chain processes...

The EAC Secretary General in charge of Customs, Trade and Monetary Affairs, Annette Ssemuwumba, unveiled the One Stop Border Post Performance Measurement Tool on behalf of the EAC Secretary General, Dr. Peter Mathuki, during the opening session of the 14th African Union High Level Private Sector Forum that is taking place in Nairobi, Kenya this week. Ssemuwemba announced that the tool is now ready for use and that Partner States and stakeholders will embark on data collection, sensitisation on use and full roll out. OSPBs are an important infrastructure at border crossing points and contribute to spur intra-regional trade by reducing the costs of doing business through reduction of time and costs taken to cross borders. Further, OSBPs eliminate multiplicity of documentation associated with two-stop border posts’ bureaucracies. Lack of data to inform decision making on major aspects such as OSBP performance, human resources and state of the physical and digital infrastructure have often slowed down collective action for optimal performance of existing OSBPs. The OSBP Performance Measurement Tool will involve a range of measurements including time spent on administrative procedures, reduction of transport costs, reduction of inventory costs, and an increase in revenue collection and trade. Customs administrators in the EAC region will use the data generated by the measurement tool to assess OSBP performance and institute improvement strategies.  Specifically, the tool has been developed to provide the necessary mechanism to measure the performance of OSBPs on six fronts, namely: Time, Cost, Volume/ Throughput, Infrastructure, Inter-Agency Coordination and User...

While member countries have made huge progress in increasing intra-EAC trade, which has grown to $10.17 billion as of last year, numerous tariff and Non-Tariff Barriers (NTBs) still exist. The Northern Corridor Transit and Transport Coordination Authority (NCTTCA) have led the region in ironing out NTBs, while legislators put policies in place to address tariff issues. NCTTCA authority facilitates and promotes trade and transport to reduce regional business costs. The East African Community has a long history of cooperation stretching back to 1900 when a Single Customs Collection point was established at Mombasa. Still, Non-Tariff Barriers remain a challenge to trade. The first instance of regional integration dates back to 1917 between Uganda and Kenya. Tanganyika joined later in 1919. After independence, the East African Community was established in 1967, which due to several factors, collapsed in 1977. Notwithstanding the collapse, the East African Community recorded numerous successes, including policy, institutional and operational programmes. Acknowledging the centrality of regional integration to development, the Heads of State of Kenya, Uganda and Tanzania met in 1999. They signed a Cooperation Agreement culminating in a fully-fledged East African Community in 2000. The scope of the East African Community Treaty includes economic, social, cultural and political spheres. “The integration process is progressive starting with a Customs Union as the entry point followed by Common Market, Monetary Union and Political Federation,” the EAC secretariat notes. Challenges in trade While member countries have made huge progress in increasing intra-EAC trade, which has grown to $10.17 billion...