Local startups seek funding to tap into AfCFTA

There is a need for funding and enhanced access to finance for young entrepreneurs with startups so as to increase both production and quality as a way of tapping into the African Continental Free Trade Area agreement (AfCFTA).

Local young entrepreneurs made the request recently during the closing of a private sector conference organized by the East African Business Council (EABC) aimed at furthering the engagement and bringing on board the primary implementers of the continental agreement.

“There is still the issue of getting funds to be able to increase both quality and production to be able to tap into the African Continental Free Trade Area agreement. The private sector needs to first grow and increase exports.

The business people also need to group themselves together. The profits can increase if investors make efforts and export together huge volumes. Exporting small quantities is costly,” said Gilbert Mbonimba, a member of the EAC Youth Ambassadors Platform (EACYAP).

Avocado-based products exports

Marie Rosine Kwizera, an employee for Avocare-a young, innovative Rwandan company that produces premium, cold-pressed, extra virgin avocado oils and products- said that by increasing production, the company can increase avocado-based products exports to other countries.

The startup company is addressing post-harvest losses by adding value to avocado harvest.

“We have been exporting to Ghana, France, Tanzania and others. We need our products to be visible in many countries. We had no information about the African Continental Free Trade Area agreement.

By gaining knowledge about the opportunities, we also need more finance to increase production. For instance we have not yet tapped into the Kenya market.

We are still a small factory and we need more big modern machines to increase production capacity of avocado products from avocado,” she said.

While some startups are adding value to avocados before exporting, the National Agricultural Export Development Board (NAEB) is also supporting the exports of Avocados especially Hass and Fuerte varieties.

In 2020/21, he said Rwanda exported $1.6 million avocados. This has increased to $4.5 million in 2021/22.

Avocado production has increased from 1,000 tonnes to 2, 500 tonnes in 2021/22.

The production is set to double this year and generate $8 million from exports according to NAEB.

While some consignments of coffee and tea were exported to Ghana under the pilot phase of the AfCFTA initiative on Guided Trade, the potential of such expanded markets is yet to be grasped by traders.

Priority sectors for trading under AfCFTA include agro-processing, agriculture, textile, pharmaceuticals, automotive industry, finance, tourism, transport, and communications, among others.

“We produce over 1,000 litres of avocado oils per month and we need to increase production five-fold,” she said.

Kwizera urged financial institutions, governments and organizations that provide grants to unlock finance to young entrepreneurs with startups.

Rwanda Private Sector Federation (PSF) has called on the government to set up a one stop center facility that will enable industry players to access required documentation to fully participate in the African Continental Free Trade Area.

“We will keep on monitoring the processes and encourage traders to report to authorities any inconvenience they meet while trading across the countries where Non-Tariff Barriers exist. It is from there that as policymakers, we can engage each other to eliminate them,” said Antoine Kajangwe, Director General of Trade and Investment in the Ministry of Trade.

Rwandan businessman Dennis Karera, who is the East African Business Council (EABC) Vice Chairman, urged all international partners to put funds in the implementation of AfCFTA.

“We are also discussing linking business councils with regional trading blocs,” he said.

Recently, John Bosco Kalisa, the CEO of the East African Business Council, said there is a need to establish and roll out a “Youth in Business Fund” to enhance access to financing for youth-led businesses and enterprises to be able to tap into AfCFTA opportunities.

The proposed fund to support youth in Business and help them leverage AfCFTA opportunities needs at least $ one billion initial capital to start operating, he said.

Published on: The New Times

Publication date: 24/01/23

Link: https://www.newtimes.co.rw/article/4423/news/technology/local-startups-seek-funding-to-tap-into-afcfta