Policy Brief No. 1 2024 - From Vision to Reality: Boosting SMEs through Factoring in the AfCFTA Era

An audit of AfCFTA progress Indicative of its resolve and determination to bring the vision to reality, the African Union has declared 2023 to be the “Year of the AfCFTA” with a sub-theme of “Acceleration of the AfCFTA Implementation”. [...] For SME purposes and taken together, the GTI, the AF and its components, and the SFF plan to develop and finance trans-regional business networks and value chains through matchmaking for productive opportunities; and hence, identify baskets of goods and services that complement and support trade among the state and private parties involved. [...] 2 SMEs and the importance of factoring The above operational background and the potential gains for SMEs that ensue from its implementation underscore the imperative of financial inclusion as a driver for ensuring that the gains from the AfCFTA are dynamic, lasting, and sustainable. [...] In this new incarnation phase of the AfCFTA and in the context of the continent's economic recovery challenges in the wake of the COVID-19 pandemic, liquidity and a reliable cash flow will be the lifeblood of SME's future in Africa. [...] ● The capacity-building dimension: located in the Afreximbank Factoring Unit and in conjunction and with the support of the ACBF, the challenge is to create a “factoring/SME sociology” of support systems that promote an enabling environment for sharing knowledge, expertise, lessons, and legal and regulatory information about the benefits of factoring for SMEs.