3 min read
Kehinde
Manager, Product Marketing
When the African Continental Free Trade Area (AfCFTA) officially came into force, it wasn't just another policy agreement signed in Addis Ababa or Abuja. It was a bold statement: Africa is ready to trade with itself.
For decades, Africa has been known as a continent rich in resources but fragmented in markets. Nigerian businesses often found it easier to export to Europe than to Ghana, while Kenyan SMEs faced more challenges sending goods to Uganda than to the UK.
AfCFTA is changing that narrative.
According to the World Bank, AfCFTA has the potential to lift 30 million Africans out of extreme poverty and increase Africa's income by $450 billion by 2035.
But perhaps the most exciting part? The biggest winners in all of this will be Africa's SMEs, "the real backbone of the continent's economy."
Over 90% of businesses in Africa are SMEs, and they contribute around 80% of employment across the continent.
These aren't just numbers. They represent the shop owner in Lagos, the cocoa exporter in Abidjan, the leather goods producer in Addis Ababa, or the shea butter cooperative in Tamale.
SMEs are the lifeline of African trade, but they have also been the most constrained. High tariffs, inconsistent regulations, unreliable logistics, and limited access to finance have long kept them from scaling beyond their immediate state, country and region.
AfCFTA directly addresses this by creating a single African market of 1.4 billion people with a combined GDP of $3.4 trillion. For SMEs, this is no small deal; it's like moving from a village market to a continental supermarket.
Before AfCFTA, tariffs on intra-African trade averaged around 6.1% (UNCTAD). For small businesses, that margin could mean the difference between profit and loss. AfCFTA promises to gradually eliminate tariffs on 90% of goods, making it cheaper for SMEs to sell across borders.
Previously, exporting even small quantities often meant navigating more than 50 different trade policies across Africa. AfCFTA harmonizes many of these rules, making it easier for SMEs to access neighboring markets.
As Ngozi Okonjo-Iweala, WTO Director-General, once said: "Africa can only dominate global trade if it first learns to trade with itself." AfCFTA provides that unified platform.
SMEs that focus on processing and adding value to raw materials will benefit most. Instead of exporting raw cocoa beans, a Ghanaian SME can export chocolate bars duty-free to Côte d'Ivoire or South Africa. This encourages intra-African value chains, where SMEs become key players in supply networks across borders.
E-commerce platforms and fintechs are riding on AfCFTA's digital protocols to simplify trade. With solutions such as digital wallets, instant cross-border payments, and trade facilitation platforms like Brydge, SMEs no longer have to rely on middlemen or wait weeks for bank transfers. This makes scaling much more realistic.
Beyond goods, AfCFTA covers services, investment, and even the movement of people. SMEs can now collaborate more freely with partners in other countries. Whether it's a logistics startup in Nairobi partnering with a cocoa cooperative in Ghana or a Nigerian fintech powering payments for retailers in Uganda.
Of course, opportunities don't erase challenges. Many SMEs in Africa are still faced with the following challenges:
This is why platforms, trade enablers, and policy advocacy remain crucial in bridging the gap between policy and practice.
In one sentence: AfCFTA gives African SMEs the chance to play big.
No longer limited by borders, SMEs can now think continental. A Kenyan farmer can see Nigeria as a market. A Nigerian manufacturer can view Egypt as a growth opportunity. An Ethiopian startup can scale to South Africa without drowning in tariffs and paperwork.
For SMEs, that means being proactive: learning about AfCFTA opportunities, building capacity, adopting digital tools, and seeking partnerships.
AfCFTA is more than an agreement; it’s a mindset shift. It’s about Africans seeing Africa as their first market of choice.
SMEs stand at the center of this transformation. With the right support, digital tools, and willingness to scale, they will not only tap into the $3.4 trillion opportunity but also redefine Africa’s role in global trade.
The question is not whether AfCFTA will impact SMEs. The question is: Which SMEs will seize the moment and which ones will be left behind?
