As the country braces up for the implementation of the Africa Continental Free Trade Area (AfCFTA), Minister of Industry, Trade and Investment, Otunba Adeniyi Adebayo has called for the sensitization of the Medium, Small and Medium Enterprises (MSMEs) to enable them benefit from the continental market.
In his opening remark at the Roundtable Dialogue on AfCFTA Agreement organised by the Nigeria’s Employers Consultative Association (NECA) in Abuja recently, the Minister welcomed the report titled “Continental Integration and the Nigerian Economy”, which focus was the effect of AfCFTA on MSMEs in the country.
He noted that the report was to fill the knowledge gap on the possible effects of AfCFTA on the economy. The report was based on the surveys conducted for 1,800 MSMEs in five states, covering multiple socio cultural zones, to evaluate the awareness and preparedness of MSMEs.
According to him, “The survey results disclosed that the majority of MSMEs are unaware of the existence of the trade agreement, especially smaller businesses. This is an important finding for the nation, as this lack of knowledge will prevent their successful utilization of the agreement. The key takeaway is that more needs to be done to adequately disseminate information to our MSMEs to ensure that they are effectively prepared in the post-integration era.”
The Minister disclosed that AfCFTA has the capacity to boost intra-African trade and is expected to deliver an integrated continental market, consisting of 1.27 billion consumers with an aggregate GDP of USD 3.4 trillion.
He pointed out that Nigeria, as the largest economy in Africa, has the potential to greatly increase its trading volumes, production capacity and generation of foreign investments.
“However, as a country, we can only fully benefit from this opportunity if we are adequately prepared for the impending changes that will affect our business environment.
“It is necessary that we understand the full-scale impact that AfCFTA will have on all people and businesses, especially in terms of job creation and economic activities.
“We need to effectively utilise the opportunities that will be created by this trade agreement to develop our local production capacity and achieve our industrial aspirations.
“MSMEs form the backbone of the private sector and contribute more than 90% of our GDP. With more than 40 million MSMEs in existence, employing close to 75% of the Nigerian workforce, the impact of AfCFTA on the Nigerian economy will be significant,” he said .
Adebayo noted the challenges faced by MSMEs in trying to scale their business and capture a larger share of the market, which included access to funding, access to markets, ability to attract quality talent, relatively high cost of operations and the burden of regulatory compliance.
“Our vision is to eliminate these barriers to growth and improve their chances at succeeding in a post-AfCFTA economy. Accordingly, we have established the MSME policy to drive the growth and competitiveness of Nigerian MSMEs.
“We also concluded a landmark USD 1 billion syndicated term loan through the Bank of Industry (BOI) to provide affordable loans to MSMEs. Also, we have developed the MSME Portal to provide MSMEs with wider access to the market and the opportunity to be matched with customers.
“The outcomes documented in this report will play a key role in determining the strategies that Nigerian businesses will need to take in order to thrive post-AfCFTA. The Federal Government will continue to do our part in supporting MSMEs on this journey,” he said.