BY KINGSLEY OKOH, Lagos
No doubt, the Micro, Small and Medium Enterprises(MSMEs), world over, remains the lubricant of every economy.
This is even more pronounced in Africa, where a lot of Small and Medium Enterprises(SMEs) have sprung up in the last few years.
Nigeria, particularly, referred to as the most populous country in Africa has a whopping 41 million SMEs struggling to retain their respective market share.
However, to enhance intra-African trade and competitiveness within the continent and the global market, the Africa Continental FreeTrade Agreement (AfCFTA), came to existence on the 1st of January, 2021.
Particularly of note is the impact this trade agreement will have on SMEs, not only in Nigeria, but across Africa.
AfCFTA, which was signed by 54 countries across Africa is aimed at providing great opportunities to enhance industrialisation in Africa, by removing tariffs and other barriers to trade on goods and services as well as increasing intra-African investment, an area of strength SMEs can leverage on.
Market observers say, the tariff holiday is expected to lower operating cost, increase business profit and allow SMEs to invest more in the existing businesses to expand outreach, absorbs more unemployed Nigerians, create wealth and reduce poverty in the country.
BENEFITS OF AfCFTA TO SMEs
Speaking on this development, the director of trade, federal ministry of industry, trade and investment, Aliyu Abubakar, pointed out that, SME constitutes the backbone of many businesses in Nigeria.
According to him, “We have about 41 million of them in Nigeria. When you aggregate their activities, you will realise that they create more jobs, more wealth than even the government. It’s just the question of looking at the data and the statistics. Right now, the government has lots of support for them because they are critical to growing our economy, and the government will continue to support the SMEs in various ways.”
The senior special assistant to president Muhammadu Buhari on public sector matters, Mr Francis Anatogu, in a recent chat, says the aims of the agreement was to; create a single and liberalised market for goods and services; contribute to the movement of capital and natural persons; promote sustainable and inclusive socio-economic development; expand intra-African trade and enhance competitiveness within the continent and the global market.
He notes his committee was also working with several federal government agencies, including the Nigerian Export Promotion Council, the NEXIMBANK, and the Bank of Industry(BoI), among others to help mobilise local manufacturers to increase their capacity in readiness for the continental African economic bloc.
This, he pointed out, is also in addition to the small and medium enterprises aggregation module which would facilitate the formalisation of operators in the informal sector to enable them enjoy tax rebate available for participants in the AfCFTA.