CBC-CIPE Women’s Empowerment Conference: Afcfta - An opportunity for women-run SMEs in Africa to competitively trade
Towards the successful implementation of the AfCFTA Agreement for inclusive and sustainable development across Africa.
Expected outcomes of the full implementation of AfCFTA:
- Raise intra-Africa trade from 15 percent or $50 billion in 2017 to 25 percent or $70 billion by 2040 - United Nations Economic Commission of Africa (UNECA).
- Lift 30 million Africans out of extreme poverty and boost the incomes of nearly 68 million others who live on less than $5.50 a day – World Bank.
- Boost Africa’s income by $450 billion by 2035 (a gain of 7 percent) while adding $6 billion to the income of the rest of the world – World Bank.
Whilst women comprise the vast majority of informal cross-border traders in Africa, they are disproportionately affected by non-tariff barriers (NTBs), including corruption, harassment, misinformation about customs procedures and regulations and confiscation of goods.
The African Continental Free Trade Area (AfCFTA) presents one of the greatest opportunities for bolstering inclusive growth and sustainable development on the African continent.
Under the Agreement, the African Union Member States explicitly seek to achieve gender equality and enhance the export capacity of women and youth.
The AfCFTA holds a huge growth potential for businesses, within and outside Africa. This is a market of 1.2 billion people and a combined GDP of over $2.5 trillion, a growing young African population, and a growing middle class whose purchasing power is increasing.
Cognisant of this power that the AfCFTA holds for women entrepreneurs in Africa, the COMESA Business Council (CBC) in partnership with the Center for International Private Enterprise (CIPE) held the Women’s Empowerment Conference on African Continental Free Trade Area (AfCFTA) on October 6th, 2021.
The objective of the forum was to propose strategies and actionable recommendations towards the successful implementation of the AfCFTA agreement.
The conference unpacked technical and market information on how women-led businesses can benefit from the AfCFTA.
It also proposed measures to improve compliance to market access requirements by SMEs under COMESA and towards AfCFTA.
The convention also raised awareness on policies that support participation of women in the AfCFTA and proposed measures to strengthen digital financial inclusion of women in trade at the COMESA and AfCFTA level.
“The AfCFTA Agreement explicitly recognises the importance of gender equality. Article 3(e) specifies that the AfCFTA aims to promote and attain sustainable and inclusive socio-economic development, gender equality and structural transformation,” observed Ms. Sandra Uwera, the Chief Executive Officer at the COMESA Business Council.
“Article 27(d) of the AfCFTA Protocol on Trade in Services makes explicit reference to improving the export capacity of formal and informal service suppliers, with particular attention to micro, small and medium-sized operators, and women and youth service suppliers,” added Ms. Emily Mburu, the Director at the Directorate of Trade in Services, Investment, IPR and Digital Trade, at the AfCFTA Secretariat.
Economic inclusion, gender equality
“A report developed by our experts has found that there is limited awareness by small businesses in Nigeria, on the ACFTA,” said Ms. Barbara Langley, the Director of the Center for Women’s Economic Empowerment at the Center for International Private Enterprise (CIPE), adding that similar reports for Ethiopia and Kenya were in the pipeline.
According to World Bank, the African Continental Free Trade Agreement (AfCFTA) represents a major opportunity for countries to boost growth, reduce poverty, and broaden economic inclusion.
Further, Implementing AfCFTA would increase Africa’s exports by $560 billion, mostly in manufacturing, spur larger wage gains for women (10.5 percent) than for men (9.9 percent) and boost wages for both skilled and unskilled workers, 0.3 percent for unskilled workers, and 9.8 percent for skilled workers.
“A significant milestone in Africa’s regional integration efforts, the AfCFTA will remove 90 per cent of tariffs of goods over the next five years. This newly formed market of 54 nations and 1.2 billion people will unlock historically low levels of intra-continental trade and attract long-term, stable investments from around the world,” said Dr Asfour, the President of the African Business Council.
The AfCFTA is also a catalyst for women following the Declaration of the years 2020 to 2030 as the new Decade of Women’s Financial and Economic Inclusion. In the Declaration, African leaders recommitted to scale up actions for the progressive gender inclusion towards sustainable development at the national, regional and continental levels.
Speaking to the complementary importance of digital transformation towards boosting intra-regional trade, Ms. Debra Mallowah, Vice-President East and Central Africa Franchise, Coca-Cola noted, “it’s not enough to market our goods online - it’s essential that we start getting into the e-commerce space, and Covid-19 had significantly accelerated the need for this.”
Ms. Mallowah further highlighted that digital transformation needs to be developed with the customer in mind. She further highlighted that empowerment needs to be looked at with a growth mindset and an entrepreneurial spirit.
She highlighted that women needed to be intentional, aggressive about accessing information, and regional markets.
The exponential potential on the continent will be realised through purposed gender sensitive economic policies, a sound business environment and political commitment focused on gender mainstreaming in AfCFTA National Strategies.
“The implementation of deliberate public-private partnerships in trade facilitation is also key in the drive towards making Africa an economic powerhouse in the global economy,” noted Ms. Temitope Iluyemi, Senior Director, Global Government Relations, Proctor and Gamble.
It was further noted that policies needed to be translated to practical solutions that need to reflect the real ground requirements of women in trade on the ground.
Ms. Maureen Sumbwe, the CEO of Zambia Federation of Women in Business, highlighted how issues like accessing finance, capacity resources and basic information to guide market expansion needs are difficult to find at a domestic level. She further appealed for mechanisms that bring such information closer to the market.
Keenly aligned to the ACFTA agenda, is the African Development Bank program known as Affirmative Finance Action for Women in Africa (AFAWA). This program supports women in trade to access markets across Africa.
“AFAWA has the ambition to reduce the USD 40 billion access to finance gap that women-run businesses face on the continent, though facilitating access to finance; providing technical assistance to financial institutions and women entrepreneurs; and facilitating policy dialogue to reform the legal and regulatory framework affecting women in business,” said Ms. Nathalie Gisabo Gahunga, Chief Gender Officer, African Development Bank Group.
However, all these aspects are driven by the market’s evolution into digital transformation and financial inclusion. The discussions explored the opportunities on expounding into borderless territories.
Ms. Sabine Mensah, Deputy CEO of AfricaNenda underscored this stating, “digital financial inclusion of women within the AfCFTA will provide security and ensure access to key resources mitigating external shocks.”
Ms. Mensah talked about how digital financial inclusion as a pathway to more effective ways of engaging in trade. It promotes access, affordability and alternative channels to access resources beyond the limitations of physical environments.
This is important because it can open new markets for MSMEs. She further talked about the challenges of SMEs in areas of financial access, technical skills.
Ms. Mensah, explained that digital financial services are definitely the drive for women entrepreneurs to grow beyond their small and traditional market territories.
Amongst other key takeaways from the conference’s deliberations, the following were noted: harmonisation of standards, capacity building, and local sourcing of manufacturing inputs is key for strengthened value chains within the AfCFTA; giving women equal opportunities to pursue and thrive in STEM careers enhances women’s economic security and ensures a diverse and talented STEM workforce for the benefit of Africa's manufacturing industry; and, continued investment in financial literacy and digital literacy is key in the drive for more equitable access to financial services for women.
The critical role of CBC in the implementation of AfCFTA
The CBC will advocate for a conducive trade environment in the region that will support MSMEs to have timely access to both output and input markets.
It will also advocate for the formulation of favourable policies in the region through public-private sector dialogues, collaborations, and partnerships, and facilitating alignment to existing policy frameworks at the national, regional and continental levels.
CBC will also provide capacity building opportunities for SMEs, youth, and women in business. This will be through customised trainings which address the challenges affecting SMEs, women traders, smallholder farmers and informal cross-border traders.
Further, CBC will facilitate the adoption of e-commerce and cross-border digital payment schemes.
The COMESA Business Council’s BIZNET platform looks at driving e-commerce as an essential route-to-market. It is an e-market platform with database of buyers and suppliers across 9 countries.
“We are currently updating BIZNET to ensure 15 countries are listed with comprehensive data on their companies. A company seating in Egypt, should be able to search for a supplier of maize in Zambia without any challenge,” noted Ms Uwera.
CBC is spearheading the harmonisation of policy frameworks that enable digital payments addressing, amongst others, issues of interoperability.
CBC is already implementing the Digital Financial Inclusion Project for MSMEs in the COMESA region and is supporting the digital and ICT readiness amongst COMESA countries.