Are small businesses in Nigeria ready for the AfCFTA?

As African countries gear up to take advantage of the African Continental Free Trade Area (AfCFTA), small businesses in Nigeria are encouraged to build capacity and enhance competitiveness in the larger African market. With the AfCFTA set to create immense opportunities for regional trade integration, it is crucial for Nigerian small and medium enterprises (SMEs) to be well-equipped and prepared for the upcoming changes. Isi Ijewere, a business analyst, highlights key strategies that can help Nigerian businesses thrive in the evolving trade landscape. One of the critical aspects that SMEs need to address is their structural setup and readiness for expansion. In Nigeria, SMEs constitute a significant portion of the business landscape, representing about 90% of all business establishments. The combined GDP of Nigerian SMEs amounts to approximately $350 to $400 billion, while the total GDP of African nations surpasses $1 trillion. With the advent of the AfCFTA, the potential for scaling up Nigerian SMEs to operate on a $3.4 to $3.5 trillion sector is promising. This shift signifies an immense opportunity for small businesses in Nigeria to tap into markets across the African continent and experience exponential growth. However, to capitalize on these prospects, SMEs must first assess their readiness levels and address any identified weaknesses. Ijewere emphasizes the importance of identifying and resolving challenges proactively to ensure sustainable success in the competitive African market. Forming strategic collaborations emerges as another crucial tactic for small businesses aiming to expand their presence across various African markets. Given the financial constraints often faced by SMEs, collaboration with similar entities in different countries can provide a pathway for mutual growth and market penetration. By establishing partnerships, small businesses can aggregate resources, share expertise, and collectively meet the demand within diverse markets. This collaborative approach not only enhances competitiveness but also opens doors to new opportunities and market access. Moreover, in the agriculture sector, tackling post-harvest losses presents a significant challenge that can impact cross-border trade activities. To address this issue, innovative solutions such as implementing cold chain strategies have been introduced in Nigeria. Leveraging cold storage facilities to preserve perishable goods and maintain product quality during transportation plays a pivotal role in improving trade prospects for agricultural produce. Focusing on core strengths is also identified as a key strategy for small businesses to optimize business outcomes. The AfCFTA presents an opportunity for organizations to streamline their operations and concentrate on areas where they have a competitive advantage. By identifying and leveraging their strengths, SMEs can enhance efficiency, reduce operational costs, and deliver high-quality products and services to their target markets. This strategic shift allows businesses to specialize in their core competencies, which ultimately leads to improved productivity and market positioning. Additionally, by capitalizing on Nigeria's expansive market reach, SMEs can engage in local production collaborations and exchange partnerships with international counterparts looking to enter the Nigerian market. The abundance of opportunities within the Nigerian market serves as a valuable asset for businesses seeking to expand their operations and establish fruitful relationships both domestically and internationally.