Failure to understand and meet set product and service standards continues to lock out Small and Medium Enterprises from lucrative deals in intra-regional trade, according to experts
This coupled with other tariff and non-tariff barriers including lack of access to information on trade regulations, is being blamed for curtailing the small and medium businesses from participating in cross border trade.
According to the African Organisation for Standardisation (ARSO) and the East African Business Council (EABC), SMEs could also lose out in the 1.2 billion African Continental Free Trade Area (market) unless the challenges are addressed.
SMEs account for up to 80 per cent of businesses in the region, creating up to 60 per cent of jobs and contributing about 50 per cent of the region’s GDP.
ARSO, an African Union standards body has identified gaps in basic and general standards, agriculture and food products, building and civil engineering, textile and leather and automobile, among others.
Small businesses have been struggling to comply measures such as sanitary standards, protection of public health, environment and phytosanitary measures and technical regulations, which not only lock them from regional markets, but also lucrative international markets mainly in the European Union.
“We need to start having good agricultural practices...good manufacturing practices, before we even think of taking our products to the market,” ARSO Secretary General Hermogene Nsengimana said.
EABC chief executive John-Bosco Kalisa however noted that while there is need to support SMEs meet standards, some are being used technically to lock out some businesses and protect markets by individual countries.
Kenya, Uganda and Tanzania have for instance had tit-for-tat blockages on movement of some goods in recent years, which affected businesses.
“Sometimes these standards are being used as a weapon….we must eliminate these barriers and align others such as customs processes and rule of origin to enhance trade under EAC and the AfCFTA,” Kalisa said.
The two spoke in Nairobi yesterday during the signing of an MoU between ARSO and EABC to promote adoption of international and regional standards by SMEs.
The MoU aims to create a collaborative framework to identify and mobilise SMEs, particularly those targeting youth and women, with a focus on agri-business and other sectors including the AfCFTA trade priority areas.
They are keen to build the capacity of small businesses on adoption and implementation of international and regional standards over a three-year period.
The EAC has so far harmonised about 2,000 standards to support trade but intra-regional trade remains at a low of 20 per cent.
The region targets at least 40 per cent intra-EAC trade by 2030.
