A new report by the Pan-African Manufacturers Association (PAMA) has revealed that the realisation of the African Continental Free Trade Area (AfCFTA)'s full potential depends significantly on strategic interventions that promote the growth and active participation of Africa's Small and Medium-scale Industries (SMIs).
Titled "African Continental Free Trade Area: Impact and Opportunities Assessment for Africa's Small and Medium-scale Industries (SMIs)," the report underscores the critical role SMIs play in Africa's economic landscape. It notes that SMIs contribute approximately 80–90 per cent of employment, including those in the informal sector, and are vital for inclusive growth, poverty reduction, and economic stability.
"These promises and outcomes of SMIs align with the shared aspirations that drive the AfCFTA framework, which aim to establish a single continental market to promote Africa's economic stability and prosperity," the report states.
PAMA, a continental business membership organisation founded in 2018, champions the cause of manufacturers across Africa and supports the industrial transformation agenda of the African Union's Agenda 2063. It is currently led by Nigeria's Engr. Mansur Ahmed (Interim President) and Mr. Segun Ajayi-Kadir (Interim Co-Secretary).
The newly released report presents findings from a research survey involving 207 respondents across key manufacturing sub-sectors — including food and beverages, textiles, plastics, rubber, and chemicals. The survey explored levels of awareness, trade practices, and readiness of SMIs to participate in AfCFTA.
It revealed that while 96 per cent of respondents expressed readiness to engage in intra-African trade, several constraints persist, including infrastructure deficits, low production capacity, limited access to finance, and knowledge gaps concerning AfCFTA protocols.
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"Without targeted interventions, especially in trade facilitation, export clustering, and regulatory awareness, the benefits of AfCFTA risk being under-realised," the report warns.
Key Recommendations
To address these challenges, the report outlines several critical policy interventions:
- Infrastructure and Logistics Investment: Enhancing transport, energy, and digital infrastructure to ease the movement of goods and services across borders.
- Simplified Customs and Regulatory Processes: Streamlining trade documentation and reducing bureaucratic hurdles to improve ease of doing business.
- Financial Support Mechanisms: Expanding access to finance for SMIs, particularly for export-oriented production and scaling.
- Export Clustering Models: Encouraging collaborative export strategies among SMIs with similar products and low production volumes.
- Capacity Building: Providing training and resources to improve understanding of trade protocols, compliance, and market competitiveness.
Furthermore, the report stresses the importance of ensuring a level playing field through robust regulatory frameworks and enforcement mechanisms to prevent unfair competition from larger multinational entities.
A Call to Action
While acknowledging existing challenges, the report calls on policymakers, regional economic communities, development institutions, and industry stakeholders to prioritise the needs of SMIs. It argues that with the right support, SMIs can be empowered to compete effectively in AfCFTA's expanded market and serve as engines of industrial transformation across the continent.
"The AfCFTA holds immense potential to drive economic transformation and industrial growth in Africa — provided that SMIs are fully integrated into the framework," the report concludes. "Targeted interventions and collaborative efforts can unlock the full benefits of a unified African market."
