Dear business owner, you could be in Zanzibar next week

Dear business owner, you could be in Zanzibar next week

Well, maybe not you…but your product/service definitely stands a chance. I have some “inside information” from a SMEDAN (Small and Medium Enterprise Development Agency of Nigeria) training I attended recently.

I get it — you’re probably rolling your eyes thinking, “Here we go, another government event to check off some fancy Q4 goal”. Doesn’t exactly sound like it matters, right? “wake me up when they’re handing out grants or something”.

But hear me out; the African Continental Free Trade Area (AfCFTA) isn’t just more administrative jargons. This deal could actually open up some real opportunities that directly or indirectly affect you, especially if you’re trying to make it out of the hood…like me.

If you don’t get what I’m saying, you’re definitely not going to read to the end of this article so let me break it down.

Think of AfCFTA like this: imagine three friends, all tired of just scraping by, who decide to make their lives easier by teaming up.

They move in together, pool their money, and start buying groceries in bulk. By moving in together, they save on rent, cut on their light bills…(partly because they moved from band A), and lean on each other’s skills — one cooks, one fixes things, another handles all the technical and “boring stuff” like budgeting.

That’s essentially what AfCFTA aims to do for Africa: it brings countries together to lower trade costs, share resources, and make it easier for businesses to thrive across borders, instead of struggling alone. So instead of 3 (former broke) friends, think all the African countries with millions of people doing trade regionally…it all adds up now huh?

Well…all African countries except Eritrea, them no send AfCFTA Papa.

 AfCFTA: You guyssss, let’s all move in together

Eritrea:

On October 28th, 2024, I attended a training at SMEDAN headquarters, Abuja to understand more about what this means for me as a business owner. Professor Jonathan Aremu facilitated the session and here’s a peek at my notes.

SMEDAN Training on AfCFTA by Prof Jonathan Aremu

What is AfCFTA?

The African Continental Free Trade Area (AfCFTA) is a landmark trade agreement among African Union (AU) countries that aims to create a single continental market for goods and services, fostering economic integration, and enhancing intra-African trade.

This agreement encompasses a couple of key protocols: Intellectual Property, Digital, Women & Youth, Investment, Recognition, and Dispute Settlement. These protocols lay the groundwork for a more unified, accessible, and economically vibrant Africa.

Why should I care?

Currently, Africa accounts for only 2.4% of the world’s GDP, despite possessing about 30% of the world’s remaining resources…it’s the typical monkey dey work, baboon dey chop narrative.

The agreement encourages African countries to trade more among themselves, potentially reducing dependence on global markets(read oyinbo) and driving continent-wide economic growth.

Historically, Africa’s economic integration has moved in three stages: Free Trade Area (reducing tariffs and trade barriers), Customs Union (aligning trade policies among nations), and Common Market (free movement of goods and labor). When these structures are solidified, countries may choose to create an Economic Union, including a common currency, which according to Prof. Aremu, should follow — not precede — the economic infrastructure.

He emphasized that economic union(basically a common currency) is a “want,” and not a “need,” cautioning that introducing a common currency too soon in the process could destabilize economies if weaker economic practices persist.

What does this mean for me?

For individuals, entrepreneurs, and businesses, AfCFTA promises some pretty sweet deals:

1. Enhanced Trade & Job Creation: As intra-regional trade grows, more local businesses can thrive without having to rely on markets outside the continent. This creates more job opportunities within African nations, including Nigeria.

2. Lower Costs for Goods: By allowing free trade across member countries (i.e., removing import duties in the Free Trade Area), expensive imports can be replaced with more affordable goods sourced from within Africa. Goods from outside the continent may also need to reduce prices to remain competitive in the AfCFTA zone, offering savings for consumers while boosting local production. Soon, all your Shein orders will cost more than exportation to other African countries.

3. Increased Investment Opportunities: AfCFTA supports Nigeria’s involvement in cross-border projects, especially infrastructure, by fostering collaborations across governments. Businesses can now tap into a larger African market. Everyone is getting into real estate and if you can’t afford a house in Abuja…you can try your luck in Kigali just as easily.

4. Support for Key Sectors: Trade in services, especially business services, communication, tourism, and transport, are prioritized, making AfCFTA’s support in these sectors valuable for Nigeria, whose service industry is rapidly expanding. Service providers always feel left out when they hear of certain opportunities, how does it feel to know that this act was made with you in mind?

5. The Importance of Infrastructure: Prof. Aremu underscored that reliable infrastructure, particularly electricity, is crucial for productivity. Comparing it to the Bible’s “Let there be light,” he emphasized that without stable power, Nigeria’s production costs will remain high, pushing businesses to import goods from cheaper markets like Asia. Addressing these issues will be essential for Nigeria to fully leverage AfCFTA’s potential.

   
   

Ok…what’s next?

With AfCFTA in place, Nigeria and other African countries have a roadmap to increase economic resilience, but they must also address critical local issues that affect productivity. Moving forward, businesses can prepare by:

• Dotting your Ts and crossing your Is: If you’re already running a business, now’s the time to tighten up. Have solid systems in place, keep your finances in check, and make sure your product or service stands out. Structure is key if you want to play big on a continental level.

• This is prime time to be a start up: Thinking about launching that big idea? There’s never been a better moment. AfCFTA’s breaking down trade barriers, which means bigger markets and more customers without massive costs. So dust off that business plan or, better yet, just dive in and get started.

• You don’t want to hear it but…network: You don’t need to keep everything local. Link up with businesses in other African countries, find out what they’re doing, and see where you can connect. You shouldn’t wait till you’re ready to do business before you start getting to know potential business partners.

• Focus on export-ready goods: With AfCFTA lowering trade barriers, it’s easier to export. If your product is ready for the spotlight outside Nigeria, now’s your chance to get it out there. Start small, test a few markets in neighboring countries and gradually plan to go further.

• Work on your online presence: This article wouldn’t be complete if I didn’t say anything about branding or social media so here it is. People need to find you before they can do business with you and the easiest and most affordable(really! it’s free) way to do that is by having some digital footprint. You don’t have to dance on Tiktok just yet…or ever, you can start with a few cute shots of your products and work your way up from there. Goodluck!

L to R: Chivy, Khairat, Pearl and Cindy.

I often get asked how I get to attend all these kinds of events and my only answer is to actually want to get involved. I posted about this event on my Instagram stories days before and a couple of people reached out to me to get more information about it and I was excited to tell them about it. We ended up attending it together and that is how this beautiful picture was born.

You can also sign up to SMEDAN’s weekly email newsletters by registering on their platform.

Take the first step in a long walk to taking your brand worldwide.

Written by Pearl Ubani

Questions, feedback, or article suggestions? Email me thepearlubani@gmail.com

Originally published on Medium on Oct 24,2024