African SME Forum focuses on intra-African trade integration
Economic, commercial and industrial integration in Africa is essential. It is in this context that the General Confederation of Moroccan Enterprises (CGEM) and the African Development Bank (AfDB) held the African SMEs Forum in Rabat. The event brought together delegations of small and medium-sized enterprises from some twenty African countries, strategic public partners.
The opening session of the forum was addressed by the Minister of Economic Inclusion, Small Enterprises, Employment and Skills, Younes Sekkouri; the President of the General Confederation of Moroccan Enterprises (CGEM), Chakib Alj; the Vice-President of the European Bank for Reconstruction and Development (EBRD), Matteo Patone; and the Vice-President in charge of Private Sector, Infrastructure and Industrialisation of the African Bank for Development and Development (AfDB), Solomon Quaynor.
Intra-African trade
With the aim of proposing solutions to the low rate of intra-African trade, currently at 15%, CGEM President Chakib Alj argued that to achieve a prosperous, sovereign and integrated Africa, African leaders and entrepreneurs must focus on transforming the continent's infinite resources into development levers that prioritise Africa and Africans.
Chakib Alj pointed out that Africa's future lies in achieving rates that are close to those of Asia (58%) and Europe (68%), and in investing in ‘Made in Africa’, given that manufacturing production in Africa is currently only 1.9%.
In the same vein of seeking regional integration, Younes Sekkouri read out the declarations of the head of government, Aziz Akhannouch, in which he stressed that ‘to successfully achieve this integration, it is necessary to identify the strategic sectors and their complementarities in the value chains, in order to specialise and apply appropriate commercial tools’.
Sekkouri urged that structural transformations in terms of industrial policy should build business environments that favour the financial well-being of SMEs, as they account for 75% of jobs in Africa.
‘Made in Africa’
A key highlight of the Forum was the presentation of the CGEM/AfDB study identifying the continent's manufacturing capacity and development challenges.
The analysis also identified the complementarities that the automotive, textile, agri-food, and technology sectors need to sustain; and the instruments to enable them to carry out these practices. To this end, the study established 6 points:
- The strengthening of value chains through the inclusion and incorporation of African SMEs in regional, national and international ecosystems.
- Promoting a competitive and innovative business environment that places Africa among the most capable international competitors, while meeting local urgencies.
- Logistical and energy development to facilitate trade among African nations leading to increased competitiveness.
- The implementation of successful and innovative tools for SMEs to provide financial support for them.
- The promotion and training of new talent, since in 2050 one out of every two young people under the age of 25 will be African.
- Harmonisation of regulations for access to commercial and industrial exchanges.
The study therefore suggests cooperation between the public and private sectors. On the one hand, it is a matter of joining forces - the example of the African Continental Free Trade Area (AfCFTA) is clear in this regard - and of strengthening the ‘Made in Africa’ label.
African Continental Free Trade Area (AfCFTA)
Since its creation in 2018, 44 countries make it up and more than 1.4 billion consumers are part of it. The AfCFTA is one of the main means for the African economy to support ‘Made in Africa’ projects and intra-African trade.
It represents a real platform for the development of the continent's SMEs by taking advantage of its maritime, air, road and financial connectivity, since, for example, 90% of the cotton exported from Africa is sold without being woven and spun, as is the case with the manufacture of electrical cables or batteries, which, although Africa exports the materials to make them, it needs to import them from other countries, generally from other continents.
In this sense, Abdou Diop, president of the CGEM Africa Commission, stressed that the development of local resources and the exploitation of regional cooperation are essential to build competitive value chains. ‘Each country must be fully committed, because a united Africa can meet these challenges and become an engine of the global economy,’ he concluded.