Rwandan women, and youth-led businesses have been asked to take advantage of the new African Continental Free Trade Area (AfCFTA) Adjustment fund as an opportunity to tap into the continental market.
The AfCFTA Adjustment Fund ($10 billion) was signed between the AfCTA Secretariat and African Export-Import Bank (Afreximbank) and the government of Rwandan on 10 March 2023 in Kigali.
The fund is expected to help countries to implement agreed protocols and support African companies to retool for effective participation in the new trading regime that commenced in 2021.
Dennis Karera, the Vice Chairman East African Business Council (EABC), said that this new fund has not yet been tapped into but it is key to unlocking potential of local business to trade under the AfCTA.
“The fund disbursement was delayed since July but now it is confirmed to be available right here in Kigali. Therefore, Rwandan youth and women in business, if well prepared to take up the adjustment fund because they are the greatest beneficiaries,” Karera said.
Karera made the remarks this August 21, 2023 at the opening of a two-day national sensitization workshop for Small and Medium Enterprises (SMEs) women and youth in business on the AfCTA protocols and their relevance to business in the EAC region.
The workshop gathered women and youth entrepreneurs in the sectors of agribusiness, fashion, manufacturing, and service who were selected from various parts of the country.
Since AfCTA trading began on January 1st, 2021, the EABC in collaboration with the Afri-Exim Bank have embarked on building private sector capacity and knowledge about the AfCFTA to ensure that they are not left out given that 3 out of 6 EAC Partner States have commenced trading through the AfCFTA under the Guided Trade Initiative.
The workshop rationale is to ensure that the SMEs are aware of the status of the negotiations, and implementation of the AfCFTA as well as what the protocols mean to their businesses as they prepare to trade with the rest of their counterparts in Africa as key players and partners in the entire process.
Karera said that the EABC is currently tackling the problem of knowledge gaps seen in small and medium business understanding and engaging trade under the agreement.
The AfCFTA document and its protocols are about 200 pages written in English and this calls for interpretation and creating awareness to be able to move from paperwork to action.
“As we enter the trade phase we need the agreement understood through multiple seminars and training so that people understand the challenges and how to build on those challenges to trade,” Karera said.
Karera stated that this awareness will bridge the current trade gaps where Africa currently accounts for only about 2% of global trade, with only 17% of African exports being intra-African.
The AfCFTA presents an opportunity to enhance intra-African trade; however, member states still need to finalize different aspects of the Agreement, such as tariff offers and rules of origin.
Fred Mugabe, Director General of Entrepreneurship and Industry Promotion at the Ministry of Trade and Industry in Rwanda (MINICOM) said that following the negotiation of 90% tariff liberalization, Rwanda has begun to reap economic benefits from the AfCFTA market however numerous tariff and non-tariff barriers (NTBs) that impede regional cross-border trade.
The ministry officials showed that Rwanda started enabling the private sector to access information on the agreement. For instance, the establishment of the AfCFTA trade portal, an NTBs portal to report cases, a cross border complaint system, and an AfCFTA one stop center inside the Rwanda Development Board (RDB) to provide all support in one place.
Jeannette Umutoniwase, the proprietor of Inzira Dreamz Network (in Bugesera)- a made in Rwanda startup that sells in three African countries and the USA said there is no single African AfCFTA platform where accurate and all products information on the continent can be found – for example the Alibaba and Amazon.
“We need a platform that connects all of us as a center of trade,” Umutoniwase said.
In response, MINICOM officials said that they are establishing a digital trade made-in-Rwanda product platform which will be linked to AfCTA digital platform under construction
The EABC also revealed that they will soon launch the Product Management Information System (PMIS) that will be merged with the available e-soko platform to provide info on EAC products, pricing, standards among others, to bridge the current information gaps.