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Business News of Wednesday, 9 June 2021


AfCFTA: Opportunities abound for SMEs in agric

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The African Continental Free Trade Area (AfCFTA) agreement is one of the most ambitious regional integration efforts of the 21st Century, aimed at fostering economic transformation.

Many strategies are being deployed in getting small businesses in agriculture and services, to benefit from opportunities provided through AfCFTA, DANIEL ESSIET writes who attended a webinar. Helping enterprises in Africa to build capacities, expand their market knowledge, export readiness and business linkages, are seen as key elements to the development of intra-African trade.

To this end, there are efforts to support agro exporters, as well as promote their understanding of the African Continental Free Trade Area agreement (AfCFTA) legl framework.

It aims at strengthening the continent’s agri-food industry by encouraging partnerships, exchanging best practices and attracting investments.

The Pan-African Farmers’ Organisation (PAFO) said enhancing the competitiveness of small and medium-sized enterprises(SMEs) in agribusiness to explore opportunities provided by AfCFTA could empower them to trigger transformation across the continent.

Although it is a neglected sector, more than 70 percent of the population on the continent, according to analysts are involved in the sector.

PAFO believes that making the AfCFTA work will open up a market worth $67 billion to SMEs involved in agro-businesses.

This position was conveyed during the virtual Innovations Series, co-organised by PAFO and COLEACP, which showcased innovations and successes of African farmer-led businesses and SMEs.

COLEACP is an international association of companies and experts committed to sustainable agriculture.

Experts say SMEs are crucial for delivering food across AfCFTA but require enablers to capitalize on opportunities in the continental food marketplace.

The Managing Director, Trade and Development Links, Rwanda, John Bosco Kanyangoga, said the African agribusiness marketplaces present opportunities for producers to bring greater efficiency to the agrifood supply chain – upstream and downstream.

According to him, SMEs can tap vast trade opportunities by producing value-added goods and meeting quality standards.

He, however, noted that to achieve this, governments must work with producers to integrate best practices into the value chains and develop niche offerings. He added that entry barriers were high and governments have a role to play in promoting SMEs’ participation.

Kanyangoga said the concerns of farmers were tariffs and rules of origin, which were affecting the flow of agricultural products.

According to him, market access would be better enhanced with the removal of tariff barriers to trade.

Free flow in agrifood trade, he maintained, would not be achieved, with key obstacles being non-tariff measures (NTMs), including regulatory instruments such as sanitary and phytosanitary (SPS) measure as well as testing and certification requirements.

While agriculture and livestock exports present huge opportunities, he noted that SMEs in agri-business faced significant problems relating meeting the quality-control requirements.

He said SMEs need assistance in meeting the high product and service standards set by local buyers. He urged governments to continue to work with farmers and producers to drive up agricultural production.

The Chief Executive Melach Groups, based in Ghana, Michael Annan-Forson, said the coconut-processing farm has been successful in export business because of its ability to organise supply from 166 local coconut farmers.

His Melach Coconut Processing farm, he said, has a daily minimum production capacity of 30 tonnes.

The Chief Executive, PAFO, Fatma Ben Rejeb, has been working with farmers’ organisations for more than 20 years. She noted that with AfCFTA, the governments have an opportunity to help farmers export to new markets.

With the common market, she noted that real opportunities lie for Africa and the farmers.

Chief Executive Officer, Pan African Agribusiness and Agroindustry Consortium, Kenya, Lucy Muchoki, believes that the African economic transformation will be achieved through dedicated development support focusing on agricultural small businesses.

The founder of the Pan African Agribusiness and Agroindustry Consortium (PanAAC) is seeking support for agribusinesses through enhanced productivity and competitiveness in the regional and global market. The concerns of participants were that intra-African agricultural trade is, particularly underexploited owing to high import tariffs, other non-tariff barriers.

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