Harare – During the micro, small and medium-sized enterprises (MSMEs) consultation on the Africa Continental Free Trade Area in Dakar, Senegal last week, the European Union pledged 74 million euros to support the businesses.
The pledge was announced by the Secretary-General of the All-Africa Association for Small and Medium Enterprises (AAASME), Mr Ebiekure Eradiri.
“I hope this information can help ignite your commitment towards ensuring that the AfCFTA does not fail,” said Mr Eradiri. “Let us build Africa, grow Africa, and buy Africa.”
According to the World Bank, SMEs play a major role in the economies of developing countries. SMEs account for the majority of businesses worldwide and are important contributors to job creation and global economic development, representing about 90 percent of businesses and more than 50 percent of employment.
Formal SMEs contribute up to 40 percent of national income in emerging economies. These numbers are significantly higher when informal SMEs are included.
The goal of the Dakar forum was to give an insight into the challenges AfCFTA poses to MSMEs, find solutions to them, and encourage them to build networks across the continent.
Mr Eradiri said MSMEs should scale up skills and competencies to be in tune with evolving realities. In this regard, he said the AAASME intended to set up entrepreneurship and technology parks across Africa to help accelerate the pace of innovation.
“MSMEs employ the most people, occupy the biggest position in making contribution to countries’ gross domestic product, and are a force for social, economic, and political stability. The AfCFTA is one big opportunity for SME growth. The AfCFTA which commenced operation on 1 January is set to create the biggest free trade area in the world with a market of more than 1.2 billion people and a gross domestic product (GDP) of more than US$2.5 trillion,” said Mr Eradiri.
The bloc has immense opportunities for increasing intra-regional trade, enhancing production, promoting economies of scale, creating jobs, raising incomes and improving the standard of living of the African people.
In their recommendations at the end of the consultation, participants said to harness the benefits of AfCFTA, governments should incentivize the MSMEs by buying their goods and services while giving them tax incentives to make them more competitive.
To leverage Africa’s rich human assets in the AfCFTA, the needs and priorities of women and youth must also be reflected in the frameworks being established.