Nigeria’s leading economist and development expert, Prof. Pat Utomi, has charged African governments to prioritize entrepreneurship, especially the Micro, Small and Medium Enterprises (MSMEs), through appropriate policy frameworks and other supportive initiatives in order to explore the opportunities availed by the African Continental Free Trade Area (AfCTA) agreement for sustainable growth of their economies.
Utomi, who is also the chairperson of the Pan-African Private Sector Trade and Investment Committee (PAFTRAC), gave this charge in his remarks during the launch of the 2022 Africa CEO Trade Survey Report 2022 in Cairo, Egypt.
He pointed out that idea that African experts are now actively seeking the views of the continent’s enterprising men and women who provide the goods and services on which Africans rely remained noteworthy based on the fact that in the past, policy makers opted to operate without this context, with predictable results.
According to him, the results of the survey paint an interesting picture as African CEOs are slightly apprehensive about the future and operating in the long shadow of the pandemic, shaken by disruptions in delicate global supply chains, spooked by war and faced with a possible recession.
Utomi reported that only 50 percent of CEOs surveyed said they felt confident about the future just as less than the 93 percent who were confident about 2022 when they were asked in 2021.
He pointed out that dependent as we are on the outside world for much of what we consume, it remained little wonder that these global crises are literally felt in our kitchens, stressing that we cannot carry on like this.
The renowned economist noted that this was why the confidence that CEOs have in the African Continental Free Trade Area (AfCTA) agreement is so heartening.
He projected: “When fully implemented, the AfCFTA will bring down trade barriers on the continent, harmonise trade regulations in all member states and in so doing create the largest single market in the world. The benefits from this would be incalculable.
“Our combined strength will make us an infinitely more attractive destination for investment, encourage value addition and according to the World Bank, raise incomes on the continent by 7 percent and lift as many as forty million people out of poverty.
“This is doable but it means that we have to listen closely to the people who run the businesses, especially the SMES on the continent, address their concerns, anticipate their needs and build an environment that spurs innovation and rewards their hard work”, the PAFTRAC chairman added.
He maintained there were important clues in the report that can guide us as the CEOs require a lot more information about the opportunities of AfCFTA and also about one another.
Utomi elaborated: “They need facilitation of cross border trade, along with payment systems, that will enable them to take full advantage of trade area.
“They also need better trade infrastructure and logistics so they can, for example, move their goods from Lusaka to Abidjan as seamlessly as possible. And it goes without saying, they need policymakers across Africa to move quickly to realise this dream that finally seems tantalisingly within reach, almost six decades after decolonisation.
“So, those are the things we need to do. First of all, we must recognise the preponderance of micro-small and medium sized enterprise in the continent’s commercial landscape. A vast majority of the companies operating in Africa employ less than five hundred people and have less than USD 1 million in annual turnover.
“This recognition must inform the policies that we make, as we seek to support growth and investment. These companies, often run by women and people, are notoriously starved of capital which handicaps their expansion and compromises their sustainability.
“We will need to find creative ways to make long term capital to them. We will also have to assist them to achieve quality and standards compliance, improve packaging and gain access to lucrative markets”, he added.
The PAFTRAC leader further pointed out that given its nature and objectives, cross-border transactions, payments and ease of movement will be critical to the AfCFTA and that this means African governments must move quickly to formalise cross-border trade, assuring traders of the safety, security and enforceability of transactions, while also facilitating the free movement of people and disencumbering customs processes.
“I am encouraged by the launch of the Pan-African Payment and Settlements Systems (PAPSS), a home grown system through which traders can make and receive payments across currency lines. In addition, governments also need to invest in trade-enabling infrastructure, such as roads, ports and warehousing”, Utomi stressed.
