Target SMEs with competitive advantage in AfCFTA sensitisation – Expert

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A debenture as a long-term financing tool for companies
Richard Nunekpek, Author

For sensitisation efforts on the opportunities presented by the Africa Continental Free Trade Area (AfCFTA) to reap tangible benefits, there is a need to streamline information and target Small and Medium-Sized Enterprises (SMEs) which operate in areas where the nation holds a competitive advantage over its peers on the continent.

This is the view of lawyer and agribusinessman Richard Nunekpeku, who argues that a scatter-gun approach – while giving a semblance of effectiveness, would yield a poor return on investment of otherwise scarce resources, as the opportunities are currently “not for every business”.

While acknowledging concerns raised in some quarters about the scope of sensitisation efforts, he stated that not all sectors, or businesses operating in those sectors, are ready to take advantage of the AfCFTA in its nascent stages; as such, priority must be given to those best placed to take advantage of the arrangement.

“What I would want to see is a bit of targetting in terms of sensitisation; it is not an opportunity for every business and it is not everyone who would be interested in the African market. If we understand our competitive advantage as a country, then we may be looking at SMEs operating in that competitive advantage space – sensitising them and helping them build capacity for the African trade, because if we are on the airwaves with a broad message and not reaching the core businesses, then we are just wasting time and money in a bid to sensitise everyone.”

He made these remarks in an interview with the B&FT subsequent to his participation as a panellist at the 2021 edition of the Pan-African Conference organised by the American Bar Association International Law, which discussed pertinent issues across various sectors in light of the AfCFTA

Harmonisation of commercial laws

One sticking point with AfCFTA remains the divergence in legislation – investment law and competition law, intellectual property law, and trade and Customs laws, which are at the heart of the free trade agreement – across regional blocs and individual countries.

While arrangements such as OHADA – Organisation pour l’Harmonisation en Afrique du Droit des Affaires (Organisation for the Harmonisation of Business Law in Africa) – has made progress with achieving universal business laws across its 16 member-states in Central and Western Africa and is considered a template for the continent-wide free trade area, critics say its success is largely attributable to “member-countries having a lot in common, including culture, currency and the French language”.

In light of this, Mr. Nunekpeku says the harmonisation of commercial laws must take precedence in the minds of key stakeholders, as “every profitable business environment is underpinned by a robust and comprehensive legal order”.

Addressing fears that some countries will become dumping grounds for cheaper – and often substandard goods – owing to the comparatively low purchasing power per capita across the continent, he reasoned that proper enforcement of standardisation across the continent would serve as the primary remedy, as it would largely erode possible gains from the use of inferior inputs.

“We have to ensure that we have a common African standard benchmark, so that goods produced in Kenya or Mozambique or Egypt or Cape Verde, when they arrive here, the Ghanaian is as competitive in terms of quality, because they would be complying with the same standard; which, every other thing being equal, would ensure that the cost of production would be same.  If regulatory agencies ensure the effective implementation of an Africa-wide quality benchmark, it would be safe to assume that an acceptable level of investment would translate to cost-saving and parity across the board,” he explained.

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