UNDP tips Zimbabwean MSMEs for AfCFTA gains

The African Continental Free Trade Area (AfCFTA) presents a huge opportunity for youth and women-led micro, small and medium enterprises (MSMEs) in Zimbabwe who could profitably exploit the market of about 1,3 billion people to grow their businesses.

To achieve this, more focus needs to be directed at increasing export capacity building to ensure budding businesses realise their potential and effectively deal with challenges that come with this opportunity, experts have said.

In an interview on the sidelines of the two-day United Nations Development Programme (UNDP) youth and women-led enterprises export readiness training that began yesterday in Bulawayo, consulting expert, Mr Dennis Choguya, said the AfCFTA presents a unique window for Zimbabwean MSMEs and stressed the need to urgently address emerging challenges, including competition.

He said the emerging trade opportunities will not be exploited easily as MSMEs need to work on product quality, business sustainability and economies of scale to be able to compete with other countries.

“The opportunity lies in that Africa as a whole is a big market representing about 1,3 billion people, meaning it is a big market waiting to be served. Again, given that already, intra-Africa trade is very low if we compare to other trading blocks,” said Mr Choguya.

“It only represents 15 percent of the trade that happens in Africa but there is 60 percent trade within the European Union.
“So, the thinking there is, that if we grow intra-African trade, we are then also able to support businesses in Africa to boost up their revenues, to give them exposure to new markets and to help them with economies of scale because the bigger the market that they save, the greater their economies of scale, which ultimately lead to price competitiveness and this is the opportunity.”

Consultant Dennis Choguya.

However, Mr Choguya said the opening of borders for seamless regional trade under the AfCFTA means local MSMEs are also going to face stiff competition from other businesses in other African countries.

The ongoing two-day export readiness training was organised by UNDP in partnership with the Ministry of Women Affairs, Community, Small and Medium Enterprises Development and ZimTrade.
Mr Choguya said the whole programme was looking at bringing awareness to MSMEs so that they are aware of the big market waiting to be served and how to tap into it.

Regarding preparedness, he said few trainings done so far have showed that some players are ready as a few are already exporting but reiterated the need for more capacity building and formalisation.

“There is no way they will be able to trade as exporters if they are unregistered businesses. First, they need to register as businesses, secondly, they need to register as exporters. When they register as exporters, they then register under the AfCFTA trade protocols to take advantage of the market,” said Mr Choguya.

“Registration, for now, is a good starting point, secondly, we realised that people hardly know of AfCFTA, they do not even know what it is about, how it has been structured, the opportunities and the challenges that it will bring.”

Economist, Mrs Ethel Bangwayo said the AfCFTA presents huge opportunities such as expanded market, partnership and investment opportunities hence funds and finances can flow easier among countries leading to the realisation of demand for other products as one ventures into new markets.

“We advise businesses to grow in terms of competitiveness, look at your costs, quality, pricing, packaging,” she said.

National Youth Council of Zimbabwe operations director, Mr Sungano Chisina said the training is key in capacitating young people to understand what the trade agreement is all about to compete across the African continent.

Mrs Bangwayo said the quality of products and innovations presented by local MSMEs shows a lot of potential for Zimbabwe.
UNDP resident representative, Dr Ayodele Odusola said focusing on localised markets alone limits growth potential.

“However, access to the African market holds great potential not only for business growth but also for job creation, with a positive impact on overall economic growth in the country,” said Dr Odusola.

MSMEs have become a driving force behind industrial development, significantly contributing towards employment generation, wealth creation and poverty reduction.

Their capacity to participate at the AfCFTA is expected to improve their contribution towards economic growth and realisation of Vision 2030 growth targets.-chronicle