Cross border trade and the African entrepreneur

Currently, Africa accounts for just 2% of global trade. And only 17% of African exports are intra-continental, compared with 59% for Asia and 68% for Europe.

African countries and entrepreneurs need to expand beyond domestic markets to grow their businesses and economies. Trading with neighboring countries offers great opportunities for economic growth due to proximity advantages. However, intra-African trade is currently limited due to high cross-border trade costs, stemming from regulatory burdens and poor infrastructure. Reducing these costs is essential for development, as it would enhance the flow of goods, services, capital, and people.

The African Continental Free Trade Area (AfCFTA) is key to promoting inclusive intra-African trade, driving structural transformation, and sustainable development. By diversifying the types of Foreign Direct Investment (FDI) attracted, the AfCFTA can reduce Africa's reliance on commodity-driven economies and open new opportunities for small organizations. The unification of the African market under the AfCFTA is expected to attract more export-oriented and efficiency-seeking FDI, enhancing the region's attractiveness for foreign investors.

For the AfCFTA to be a game-changer for SMEs and MSMEs, it is crucial to identify opportunities for market and value chain integration. A deeper understanding of AfCFTA's instruments, rules, and regulations, including rules of origin, trade facilitation, and certification requirements, is essential. Participation in trade fairs, exhibitions, and conferences will be key tools for SMEs and MSMEs to explore regional and continental markets.


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