EAC SMEs gain digital gateway to 300m regional market
For SMEs in Uganda and other EAC countries, the partnership could make it easier to identify verified trading partners, access information about potential markets and obtain trade finance and payment solutions through a single digital ecosystem.
Emeka Onyia, Director, Digital Business and Innovation, Afreximbank (second left), and Ahmed Farah, CEO, East African Business Council (EABC) presenting the agreement. (Courtesy photo)
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East African small and medium enterprises (SMEs) are set to gain easier access to the region’s 300-million-consumer market following a partnership between the African Export-Import Bank (Afreximbank) and the East African Business Council (EABC).
According to the statement by Afreximbank released on Monday from Nairobi, the two organisations have signed an Africa Trade Gateway (ATG) Agency Agreement to connect businesses to buyers, suppliers, financial institutions and other services needed to expand across borders.
The partnership also gives East African enterprises an additional digital route into the wider African Continental Free Trade Area (AfCFTA) market of about 1.3b consumers.
The agreement was signed at the inaugural East Africa CEO and Investment Forum in Nairobi, Kenya, as businesses increasingly turn to digital platforms to overcome some of the challenges associated with cross-border trade.
For SMEs in Uganda and other EAC countries, the partnership could make it easier to identify verified trading partners, access information about potential markets and obtain trade finance and payment solutions through a single digital ecosystem.
The EABC has been promoting digital trade among its members and supporting enterprises to join the platform.
Ahmed Farah, the EABC chief executive officer, said the organisation is combining its regional business network and export-readiness support with digital tools to help enterprises take advantage of opportunities created by AfCFTA.
He said the partnership would also connect enterprises to business-to-business matchmaking and trade finance solutions to facilitate intra-African trade under the AfCFTA.
Opening markets for SMEs
For SMEs, one of the potential benefits of the partnership is access to verified buyers and suppliers beyond their domestic markets.
Many smaller businesses have products that could be sold regionally but face difficulties identifying reliable customers, suppliers and financing partners in other countries.
Through the Africa Trade Gateway, enterprises can access services covering trade finance, payments, compliance, logistics and market intelligence, alongside connections to potential trading partners.
This could give Ugandan SMEs producing agricultural commodities, manufactured goods, fast-moving consumer goods and other African-made products an additional channel for finding customers in the EAC and beyond.
Haytham El Maayergi, Afreximbank executive vice-president for Global Trade Bank, said establishing trusted business connections remains a challenge for companies seeking to trade across borders.
“Trade is built on connections, but for many businesses, identifying trusted partners and accessing the right services to trade across borders can be a significant challenge,” El Maayergi said.
For SMEs, such connections can be important because expanding into a new market often requires more than having a product to sell. Businesses also need information about potential customers, payment mechanisms, logistics, compliance requirements and access to working capital.
The digital gateway brings these services together, potentially reducing some of the information and connectivity barriers that can discourage smaller enterprises from pursuing regional markets.
Connecting East Africa to Africa
The agreement also expands EABC’s participation in a growing network of trade-supporting institutions working with Afreximbank to connect African businesses to markets beyond their immediate borders.
Afreximbank’s flagship Africa Trade Gateway was launched in June 2023 and now operates in more than 45 African countries.
The platform connects 45 trade-supporting institutions, 110 commercial banks and 25,000 verified companies, with an opportunity pipeline valued at about $4.5 billion across commodities, minerals, oil and gas, fast-moving consumer goods and other African-made products.
For Uganda, the partnership could provide an additional avenue for SMEs that have products but lack the contacts, market information or financing needed to enter larger African markets.
The wider objective is to move digital trade beyond simply providing information towards facilitating actual transactions by connecting enterprises with buyers, suppliers, financial institutions and other services required to complete cross-border business.