The Future of Intra-African Trade
“My vision is a team in Monrovia making their service available to one billion people across the continent, as opposed to five million people in Liberia,” says Dare Okoudjou, CEO of cross-border payment network MFS Africa.
Historically, cross-border trade has been a challenge in Africa. But in January 2021, trade formally commenced for the newly minted African Continental Free Trade Area (AfCFTA). Signed by 54 of Africa’s 55 countries, the agreement eliminates tariffs on 90% of goods, creating the largest free trade area since the World Trade Organization (WTO) was founded.
The AfCFTA opens the door to pan-African trade, long seen as a crucial step in unlocking the continental economy. But for Okoudjou’s vision to become reality, concrete, cross-border connections must be forged between business, finance, and government. Physical and digital pathways must be created to enable the flow of goods between nations.
That’s why MFS Africa attended the Intra-African Trade Fair (IATF) in November 2021, as part of Afreximbank’s Evolve initiative – an industry-first scale-up program for ten of Africa’s fastest growing digital businesses.
“One of the things I discovered in Evolve is how willing governments are to engage and talk, helping the private sector grow.”
Evolve participants were selected in a rigorous process to identify ten African businesses demonstrating clear potential to scale up into pan-African giants. They had to be well past the start-up stage of maturity, and already trading beyond their domestic market. Over the last year, Afreximbank worked with these companies to introduce them to funding opportunities, new markets, and potential partners.
The culmination of the process was a showcase event at the IATF. Each company was given five minutes to present to a room full of African luminaries spanning government, finance, and business, followed by a ten-minute Q&A, and networking. The event afforded Evolve participants higher-level access than they could usually achieve in one place.
Moulaye Taboure, CEO of ecommerce platform Anka says, “One of the things I discovered in Evolve is how willing governments are to engage and talk, helping the private sector grow.” Omar Hagrass, CEO of Egyptian logistics platform Trella expands, “Having access to these individuals is so important for enabling our business. Initiatives like this are so important for empowering African trade.”
Thanks to the event, Evolve participants are negotiating new sales pipelines, new lines of credit, and even discussing the potential for partnerships.
“It’s important that businesses share their learnings with each other so that as new companies come up, they’re able to pick up from where we left off.”
High-level introductions were important to the participants but connecting with other entrepreneurs was just as significant. Akindele Philips, CEO of agtech platform Farmcrowdy, says the program helped his company overcome a key barrier to expanding beyond its native Nigeria. “Initially it was tough identifying people in other regions we could work with. But we found that collaborating with other businesses has enabled us to get this done.”
James Paterson, CEO of drone-based agtech company Aerobotics agrees. “To move into new markets, you really need partners on the ground. Initiatives like Evolve and partners like Afreximbank are vital to empowering trade throughout the continent.”
And as these companies expand, they will take others with them. Every Evolve participant is focused on supporting smaller businesses to some extent. It is estimated that the combined SME network of these ten Evolve businesses is over 600,000 SMEs across Africa.
This impact is key to Evolve, explains Naa Akwetey, Senior Vice President for Strategy and Business Development at medical logistics company mPharma, “It’s important that businesses share their learnings with each other so that as new companies come up, they’re able to pick up from where we left off.”
Historians will look back and say intra-African trade unlocked the next century.
Recognizing that digital is an essential component of Africa’s growth, Afreximbank, in collaboration with the African Union Commission (AUC), has established a digital policy working group. This new platform was launched in April 2022 in Cairo, and comprises of digital scale-ups, mature digital ventures with a continental footprint, and representatives from the AfCFTA and AU member states.
The working group will guide digital and ecommerce policy at a crucial time in the growth of Africa’s ecosystem and infrastructure, supported by scaleups from Afreximbank’s Evolve initiative, including Anka, Farmcrowdy, SunCulture, mPharma, Wasoko, and Kobo360.
Initially the group will focus on digital policy areas which hold the most potential for transforming and supporting Africa’s development, including regulatory passports, taxation, movement of talent, and how to recognize and protect the key role of scaleups on the wider business landscape.
With representation from a variety of industry sectors, the digital policy working group could make a huge difference in connecting the continent.
“The reality is that right now, consumers across Africa are paying way more than they need to, because production is so localized,” says Daniel Yu, Global CEO of logistics platform Wasoko. “If we can remove those borders, we’ll be able to unlock far greater value for the African population.”
In fact, says Samir Ibrahim, CEO of agtech company SunCulture, the impact could be even greater. “Historians will look back and say intra-African trade unlocked the next century.”
If the AfCFTA has opened the door to pan-African trade, programs like Evolve are how the continent walks through. Obi Ozor, CEO of logistics platform Kobo360 says, “I’m hoping other agencies copy the work Afreximbank is doing, through Evolve and other initiatives. It is critical to start bringing stakeholders together.”
With the showcase event at the IATF, these ten scale-ups have already made a giant first step.
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