The African Union (AU) is encouraging small businesses across Africa to adopt technology, research, and development to drive significant growth. African startups are urged to capitalize on the opportunities offered by the African Continental Free Trade Area (AfCFTA), with sectors like agriculture, manufacturing, ICT, minerals, and creative industries identified as having immense potential.
AU’s call for innovation in African businesses
The AU is calling on startups and micro, small, and medium-sized enterprises (MSMEs) across the continent to leverage innovation for sustainable growth. Albert Muchanga, AU Commissioner for Economic Development, Trade, Tourism, Industry, and Minerals, made this appeal at the third AU Forum on Micro, Small, and Medium Enterprises, held from September 9 to 13 in Windhoek, Namibia.
The forum, one of Africa’s largest gatherings of MSMEs, is themed « Empowering Financial Inclusion and Educational Innovation for African Startups and MSMEs ».
Innovation as a key driver of SME growth
Muchanga emphasized the need for African MSMEs to expand beyond the micro and small business stages. He highlighted that the AfCFTA provides unprecedented access to a single market of over 1.3 billion people, offering both regional and global growth opportunities.
According to Muchanga, « Innovation is the cornerstone of future growth and business expansion ». He urged MSMEs to prioritize research and development (R&D) to stay competitive on a global scale. By focusing on R&D, businesses can create unique products, improve services, and address critical issues, leading to sustainable and large-scale growth.
AfCFTA : Unlocking global opportunities for SMEs
The AU Commissioner encouraged entrepreneurs to explore beyond domestic markets and take advantage of the AfCFTA. This agreement reduces tariffs, minimizes trade barriers, and streamlines logistics, enabling MSMEs to engage in cross-border trade more effectively.
Muchanga pointed out that « Global market penetration is no longer a distant dream for African startups », highlighting the potential for African businesses to establish trade partnerships worldwide, including with major markets like China.
Key sectors for growth
The forum spotlighted several sectors with significant growth potential for African SMEs, including agriculture, manufacturing, ICT, minerals, and creative industries. These sectors align with the AU’s Agenda 2063, a 50-year plan aimed at promoting sustainable development and economic empowerment.
By focusing on these strategic areas, the AU aims to boost economic growth, job creation, and long-term sustainability. For example, innovation in agriculture can enhance productivity, create value-added products, and improve food security. In manufacturing, new technologies like automation and digitalization can drive efficiency and output. The ICT sector offers endless opportunities for innovation, from mobile apps that improve financial inclusion to cloud solutions that streamline operations.
Capacity building and networking
The forum also served as a platform for knowledge sharing and collaboration, featuring panel discussions and workshops on topics such as green financing, balancing quality and innovation, and promoting digital and financial education. These sessions provided MSMEs with practical insights on effective innovation, sustainable growth, and improved access to financing.
Strengthening SMEs through educational innovation
Educational innovation was a key focus, with a call for African institutions to invest in digital and financial literacy initiatives. Digital skills are crucial for businesses looking to leverage e-commerce platforms and explore new markets, while financial literacy supports informed decision-making in investment, savings, and credit access.
The future of African SMEs depends on their ability to innovate, adapt, and seize the opportunities provided by the AfCFTA. With the right support, capacity building, and financial empowerment, African startups are well-positioned to drive economic growth and job creation across the continent.
