What Rwandan SMEs expect from $10bn AfCFTA Fund in 2025

Rwandan small and medium-sized enterprises (SMEs) have called on the African Continental Free Trade Area (AfCFTA) Adjustment Fund to finance agro-processing projects especially those led by women and youth. ALSO READ: What is holding back Made-in-Rwanda products? Established in 2023 to assist African governments and private actors to trade under preferential tariffs on the continent, the fund will begin disbursements in 2025 with a main focus on manufacturing activities. The fund , which is domiciled in Rwanda, aims to support governments and the private sector in adjusting to liberalisation, fostering growth, and enabling them to seize the opportunities presented by the AfCFTA market. In March 2023, the AfCFTA Secretariat and African Export-Import Bank (Afreximbank), signed the Host Country Agreement for the AfCFTA Adjustment Fund with the Republic of Rwanda. ALSO READ: AfCFTA: Five challenges limiting youth from engaging in trade The fund has already mobilised up to $1bn in liquid capital and aims to raise an additional $10 billion, with support coming from governments and the private sector. It is a form of blended finance, including grants and concessions. The government has demonstrated readiness in resource mobilization and public-private partnerships to maximize the benefits of the AfCFTA Adjustment Fund, which has been capitalised with $1 billion by the African Export-Import Bank. The East African Business Council (EABC), in collaboration with the European Union Technical Assistance Facility (EU-TAF) is training SMEs in Rwanda on AfCFTA Guided Trade Initiative, Adjustment Fund, and Value Chain Integration. The outcome could help Rwandan SEMs tap into AfCFTA market and increase exports as Rwanda’s merchandise exports to Africa reached $306 million in 2023. Blandine Nyirajyambere, who runs a company that grows fruits and vegetables and adds value to tomatoes to produce wine , salsa and ketchup said they have not yet tapped into AfCFTA market due to lack of enough capital to increase production. ALSO READ: How African youth can propel the success of AfCFTA We are growing fruits and vegetables on limited land, 1.5 hectares, and thus low production. We need to increase production on six hectares but require more capital. we need agro-inputs. We need funding to add value to more fruits and vegetables, apart from tomatoes, to be able to tap into the AfCFTA market. we need to establish big factories, she said. Marie-Rosine Kwizera, an employee at Advocare, a company that produces cold-pressed extra virgin avocado oils and other products, says increasing production will allow the company to expand its avocado-based product exports to other countries. We have been exporting to Ghana, France, Tanzania, and other countries. We want our products to be more visible in many markets. We were previously unaware of the African Continental Free Trade Area agreement, she explained. Juliet Nyiranizeyimana, who owns a company that adds value to agricultural produce, said that the African Continental Free Trade Area fund should also help farmers get climate resilient seeds. Fruit seeds such as passion fruit seeds are expensive. They are currently being attacked by diseases. We need resistant seeds. The fund should inject funds in agro-processing and packaging materials factories. Post-harvest loss handling is paramount to agriculture products exporters.The products are rejected on the international market due to lack of post-harvest handling facilities, she said. Experts say there is a need to improve the capacity of the private sector in the East African Community (EAC) to take advantage of the opportunities brought about by the liberalised trade in Africa through the AfCFTA arrangement. Africa currently accounts for only about two per cent of global trade, with only 17 per cent of African exports being intra-African. ALSO READ: Why the AfCFTA Protocol on women and youth in trade is indispensable Many SMEs in Africa encounter numerous tariff and non-tariff barriers that impede cross-border trade. The African Continental Free Trade Area fund to help address such barriers consists of three sub-funds: The Base Fund, the General Fund, and the Credit Fund. The Base Fund will use contributions from AfCFTA state parties as well as grants and technical assistance to address tariff revenue losses, infrastructure deficits to facilitate trade growth and possible supply chain disruptions that would result from the implementation of the AfCFTA Agreement. The General Fund will finance the development of trade-enabling infrastructure while the Credit Fund will be used to mobilise commercial funding to support both the public and private sectors enabling them to adjust and take advantage of the opportunities created by the AfCFTA. Jacqueline Ingabire, General Manager of Freight Forwarders Rwanda Ltd, said that there is a need for investing in standards of the products to be able to benefit from the fund. There are set up standards to be able to export on the African market.” Diverse industries such as manufacturing, agro-processing, SMEs, creative industries, and transport from the region’s business community and government representatives have been discussing strategies for maximizing the potential of the AfCFTA through the Guided Trade Initiative (GTI) and integrating East African Community (EAC) priority value chains into the AfCFTA trading arrangement. Geoffrey Kamanzi, Policy Manager for Trade in Services at the East African Business Council (EABC), underlined the AfCFTA’s role as a transformative opportunity for Africa's economy. He urged SMEs to explore the benefits of the AfCFTA Guided Trade Initiative and the Adjustment Fund, which are designed to support the private sector's integration into continental trade. With a combined GDP of $3.4 trillion and 1.3 billion consumers, the AfCFTA is poised to boost Africa’s economies and position the continent as a key player in global trade. Rwandan traders, among others, should also learn about the AfCFTA, as Rwanda’s merchandise exports to Africa reached $306 million in 2023, up from $286 million in 2022, according to the EAC Trade and Investment Report 2023, he said. Freddy Murigande, Trade Negotiation and Cooperation Specialist at the Ministry of Trade and Industry, highlighted AfCFTA’s crucial role in Africa’s economic development. He called for Rwanda's active participation in the Guided Trade Initiative alongside other EAC Partner States, which is currently facilitating the export of products such as tea and coffee to new markets through the AfCFTA trading arrangement. “The AfCFTA presents a vast market, but to benefit from its opportunities, we must overcome logistical barriers and explore regional value chains to maximise this potential,” he explained. He also encouraged the private sector to actively engage in AfCFTA-driven trade and explore funding opportunities through the AfCFTA Adjustment Fund to boost competitiveness.

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What Rwandan SMEs expect from $10bn AfCFTA Fund in 2025