AOA Professional Services

Author: Olatunji Abdulrazaq

  • 2022: 3 Must-Dos for MSMEs

    2022: 3 Must-Dos for MSMEs

    Micro, Small and Medium-sized Enterprises are no doubt the core engine of growth in every economy. As we go into the last part of the first quarter of the administrative year, it is important to remind key business decision-makers that the time for planning and it is time to start executing.

    No doubt, the effect of the Covid19 pandemic is still very much present as new variants keep showing up, thus, MSME must strive to be flexible with an innovative approach to doing business to stay competitive.

    Here are three must-dos for MSMEs in 2022 if you want to stay afloat:

    1. Support Customer/Buyer Behaviour

    Increasingly, customers now choose how to spend their money. They are now paying for values. Thus, it is time to ask yourselves, what are the values that are important to our customers and how is our brand aligning with them. For example, a logistics business must work on timely delivery and integration of different payment methods that allow the business to thrive on the go among others.

    In addition, there has been a mindful perspective towards how customers now see businesses, particularly as they relate to brand values. It is then important that MSMEs showcase considerable touchpoints in their business model to engage in smart and intelligent systems that aid effective buying behaviour.

    2. Invest in Automation

    Do not try to carry out all business operations yourself, manually. Gone are those days, dear business owner. It is important that you allow technology to drive most parts of your business operations such as documentation, human resource management, bookkeeping etc.

    Depending on the nature of your business, it is important you leverage technology – particularly the function of automation to drive deliverables.

    Aside from reducing the cost of operations drastically, it equally fosters more efficiency than the manual system. For instance, instead of manually tracking employees’ time attendance at work, payroll management etc.; software like AOAHUB automates the process easily and still provide you with a detailed report with which you can make informed decision underlying HR & Payroll.

    3. Improve Employee Branding With Work-Life Balance

    As hard as it seemed to identify critical indicators of work-life balance, it is important to engage employees in a way that guarantees personal and career satisfaction to get the very best input of work from them too. Initiatives such as Work From Home (WFH) that were accelerated by the pandemic should be a considerable factor in today’s work structure. It is believed that remote working is the future of work, regardless of criticisms of its absolute feasibility.

    In addition, facilitate employees’ training either in form of coaching or mentoring. A well-trained and equipped employee-employer system breeds an efficient and productive workforce. Help your staff members, acquire in-demand skills related to their role and have a system that allows them to healthily put what they have learnt into practice.

    DISCLAIMER:

    The material contained in this publication is provided for general information purposes only and does not contain a comprehensive analysis of each item described. Before taking (or not taking) any action, readers should seek professional advice specific to their situation. No liability is accepted for acts or omissions taken in reliance upon the contents of this alert.

    AOA Professional Services is an indigenous tax, regulatory and advisory service firm driven by the values of professionalism and partnership. For further information on the subject matter, reach out to our Teleconsulting Desk

  • AfCFTA: Administration of Rules of Origin

    AfCFTA: Administration of Rules of Origin

    Rules of origin are the basis required to ascertain the home source of a product. Their importance is derived from the fact that duties and limitations in several cases depend upon the source of imports.

    With the African Continental Free Trade Area (AfCFTA) bringing together 1.3 billion people in 55 African countries to create the world’s largest free trade area as measured by the number of participating Member States, the Economic Development in Africa Report 2019 notes that the rules of origin could be a revolutionary for Africa as long as they are simple, transparent, business-friendly and predictable.

    In essence, rules of origin will enable goods to move duty-free within a free trade area (FTA) as long as these goods qualify as originating within the FTA.

    It is required to set up a committee on rules of origin under the AfCFTA agreement to annually review the implementation of the rules, and their provisions and submit reports and recommendations to a committee of senior trade officials.

    Rules of origin are the foundations for the successful implementation of preferential trade liberalization, the critical policy tool needed to make any Free Trade Area (FTA) functional and are of necessary importance in creating opportunities for African Least Developed Countries (LDCs) to boost trade.

    UNCTAD recommends that rules of origin should be kept simple, transparent, business-friendly, predictable and not costly or complex to comply with as companies may instead forego these preferences and choose to trade with partners outside the AfCFTA.

    “The AfCFTA is a landmark achievement in the continent’s history of regional integration and is expected to generate significant gains. But it is the rules of origin that will determine whether preferential trade liberalization under the AfCFTA can be a game-changer for Africa’s industrialization”.

    UNCTAD Secretary-General Mukhisa Kituyi

    President Muhammadu Buhari has assured the Manufacturers Association of Nigeria (MAN) that the federal government will take relevant measures to enhance access to foreign exchange for the importation of raw materials and machines that are not available locally. The President also said that Nigeria would expedite the process of setting up the Designated Competent Authority that will superintend the administration of Rules of Origin and Commission as well as the automation for issuance of electronic Certificate of Origin.

    Rules of origin are used:

    • to apply measures and instruments of commercial policy such as anti-dumping duties and protective measures;
    • to decide if imported products shall receive most-favoured-nation (MFN) treatment or preferential treatment;
    • for trade statistics;
    • for the use of labelling and marking requirements; and
    • for government procurement.

    DISCLAIMER:

    The material contained in this publication is provided for general information purposes only and does not contain a comprehensive analysis of each item described. Before taking (or not taking) any action, readers should seek professional advice specific to their situation. No liability is accepted for acts or omissions taken in reliance upon the contents of this alert.

    AOA Professional Services is an indigenous tax, regulatory and advisory service firm driven by the values of professionalism and partnership. For further information on the subject matter, reach out to our Africa International Helpdesk

  • 3 Ways To Leverage Digital Disruption

    3 Ways To Leverage Digital Disruption

    An intriguing update that shook the business waves at the start of the year was that Stanbic IBTC was closing down 50% of its physical branch in Nigeria solely because the bank wants to go fully digital as a step toward prioritising full-scale digital banking.

    Disruption is inevitable for every business and at some point, digital disruption will come for every organization regardless of size. Those who prepare for it will be flexible enough to thrive in a time of disruption, but the organization that overlooks it is surely handshaking exit as a business.

    1. Be Human-Centric

    No organization can exist without its’ people. Customers, investors, vendors, employees and a list of other persons affected by the operations of an organization are crucial to a business’s survival. Regardless of digital disruption, your people should come first. Technology being the centre point of digital disruption should be seen as an ENABLER of processes and not the process itself.

    Make your people the focus of every tool and strategy intended to drive disruption and not the other way round. Be sure that your chosen method of leveraging digital disruption solves the challenges of your people. That way, disruption is sure to foster business growth. But how do you do this? Check Number Two.

    2. Be Data Conscious

    In times of disruption, disregarding data is equal to failure. it is the foundation of every strategy and methodology to be used to control disruption to your business’ favour. Do not overlook even the smallest of data. Customer interaction, buyer journey, employee reactions, investor comments etc. are all sources of critical data essential to personalizing the experience of your people during a disruption.

    Be sure to be on top of trends as well as government policies. These too are avenues for micro-moments that shape how disruption can be adopted. Collecting and analyzing this data triggers your business for proper adoption.

    3. Automate

    Digital disruption is all about using technology to drive business processes. today we have different kinds of technology doing this. From Blockchain to Software-As-A-Service (SaaS), ERP Systems etc. They all have one thing in common, and that is to help us do business more efficiently and effectively.

    However, with digital disruption comes tonnes of activities and processes to be managed. There is no way direct human interaction can sufficiently deliver a worthwhile experience. Hence, automation becomes inevitable. Automating business processes such as Bookkeeping, HR, Payroll Management, Investor Relationship, Compliance etc. with tools like AOAHUB makes digital disruption the equity harnessed for your organizational growth.

    DISCLAIMER:

    The material contained in this publication is provided for general information purposes only and does not contain a comprehensive analysis of each item described. Before taking (or not taking) any action, readers should seek professional advice specific to their situation. No liability is accepted for acts or omissions taken in reliance upon the contents of this alert.

    AOA Professional Services is an indigenous tax, regulatory and advisory service firm driven by the values of professionalism and partnership. For further information on the subject matter, reach out to our Teleconsulting Desk

  • AfCFTA & PASPPS: Accelerating Africa’s Trade

    AfCFTA & PASPPS: Accelerating Africa’s Trade

    The AfCFTA, African Export-Import Bank, and other partners on 13th January officially launched a unified payment system for the African market. This is the Pan-African Payments and Settlements Systems(PAPSS). Its primary goal is to boost Intra-African trade significantly by making cross-border payments less reliant on third party currencies.

    PAPSS allows a customer in one African country to pay in their currency, while a seller in another country receives payment in their currency. With PAPSS, this would facilitate the African Continental Free Trade Agreement (AfCFTA) aim to bring together the 54 African countries to trade under a single market with liberalized tariffs and the removal of the non-tariff barriers to cross-border trading.

    The commencement of PAPSS would solve reliance on third currencies- US Dollars, Euros and the British Pounds for the clearing and settlement of cross-border payments and transactions which in turn leads to high costs and long transaction times. At the moment, 42 currencies are being spent on the continent and only a couple of those currencies have any value outside the countries where they are tender.

    Before PAPSS, for example, a buyer in Nigeria who intends to buy goods from a seller in South Africa will be required to pay the seller in a third currency from outside the continent- either the US dollar, the Euros or the British Pounds, pay the extra charges to have the agreed sum processed and sent to the seller in South Africa and have to wait several days for transactions to clear.

    Aside from time constraints, the method of currency conversion adds to the value of doing business and actually, the money has got to leave Africa before being sent back to South Africa. With the start and functioning of PAPSS, the same business would only pay in Nigerian Naira for the goods, while the seller will receive South African Rand.

    The PAPSS serves as the clearing, processing and settlement agent in the transaction for MSMEs in Nigeria and other emerging economies facing high import and export expenses, as well as unknown transaction delays due to limited correspondent bank relationships, foreign currency availability, and cross-border transaction rail capacity would be addressed with a commercially viable modern solution in the continent.

    In conclusion, Pamela Coke-Hamilton, executive of the International Trade Centre, said:

    “In these uncertain times, African countries now have a commercially viable tool which will address a critical barrier for MSMEs to trade competitively. ITC is preparing enterprises to profit from PAPSS, creating new opportunities for growth in cross-border e-commerce and sustainable trade.”

    DISCLAIMER:

    The material contained in this publication is provided for general information purposes only and does not contain a comprehensive analysis of each item described. Before taking (or not taking) any action, readers should seek professional advice specific to their situation. No liability is accepted for acts or omissions taken in reliance upon the contents of this alert.

    AOA Professional Services is an indigenous tax, regulatory and advisory service firm driven by the values of professionalism and partnership. For further information on the subject matter, reach out to our Africa International Helpdesk

  • Want A Successful Administrative Year? Consider these 4 things

    Want A Successful Administrative Year? Consider these 4 things

    The new year inspires renewed energy and excitement for what could happen. It’s a fresh start and the perfect time to reflect on the past and plan for the future – to set goals and figure out how to meet them. Even though Y2022 has begun, it’s not too late to kick things off rightly to help ensure growth for your business.

    Here are four things you must consider if you want a successful administrative year:

    1. Review Previous Year Performance

    Look back at the previous year. Assess what went well and what did not, and find takeaways from both. The mistakes and successes. Review your business plan and make updates. Quick posers to doing that: Were there big moves you wanted to make last year but did not? Did you want to expand your team? Expand your reach and presence? Take a hard look at where you’ve been, and perhaps where you wanted to go but could not, so you can better know where you should be heading.

    2. Build Projection

    Projections are a guide of two benefits – Roadmap & Motivation. As you develop projections for the year, consider the broader economic conditions and how they might impact your market. Of course, keep in mind that projections are guides. It’s impossible to know what will happen, so ground your projections in as much data and objectivity. Knowing the latest business trends and economic news will arm you to handle the constantly changing environment. Advisably, do this with research and preferably speak to a consultant who can bring experience and criticism that bolster what you have.

    3. Mind The Budget

    It can be difficult to keep track of all expenses, especially while juggling many areas of the business, but it’s crucial. Businesses can maximize kobo in numerous ways – from tracking tax-deductible, business expenses and minimizing long payment terms, to making monthly instead of annual insurance payments. Meanwhile, you must make smart decisions about your budget and not just about cost-cutting. Your budget is to make sure your spending fosters sustainable growth & development.

    As Benjamin Franklin rightly said:

    “Beware of little expenses. A small leak will sink a shop”.

    4. Improve on Communication & Feedback

    Effective communication is critical to business success. Encourage your employees, customers/clients & shareholders to share their thoughts about the past. Provide several ways they can communicate with you, from the regular team and one-on-one meetings to an online chat platform. Have an open-door policy and be open to receiving honest feedback and ideas. Set the tone for consistent and transparent communication. It will help you realize what needs to be improved and what is to be sustained. In addition, improved communication can help to define work-life balance for employees which in turn boosts productivity.

    DISCLAIMER:

    The material contained in this publication is provided for general information purposes only and does not contain a comprehensive analysis of each item described. Before taking (or not taking) any action, readers should seek professional advice specific to their situation. No liability is accepted for acts or omissions taken in reliance upon the contents of this alert.

    AOA Professional Services is an indigenous tax, regulatory and advisory service firm driven by the values of professionalism and partnership. For further information on the subject matter, reach out to our Teleconsulting Desk

  • AfCFTA: The Need to Review Double Taxation Arrangement

    AfCFTA: The Need to Review Double Taxation Arrangement

    A Tax Treaty otherwise called an Avoidance of Double Taxation Agreement (ADTA) or Double Taxation Agreement (DTA) could be described as an agreement between two or more countries (otherwise known as the Contracting States or parties) to make sure that a resident of one or both of the contracting countries does not suffer from paying tax twice on the same income in both jurisdictions or unduly benefit from not paying appropriate taxes in any of the countries through tax evasion or avoidance. The Agreement covers taxes on income and capital only and does not extend to consumption taxes such as Value Added Tax or Sales Taxes.

    Over the last few decades, the number of bilateral tax treaties has increased dramatically. The United Nations Model Double Taxation Convention Between Developed and Developing Countries (“UN Model Convention”) and the Organisation for Economic Co-operation and Development’s Model Tax Convention on Income and on Capital2 (“OECD Model Convention”) provide models for countries to use in negotiating the terms of their treaties and are regularly updated. For purposes of both the UN and OECD Model Conventions, it is assumed that any rules for the application of the provisions of those Model Conventions are a matter for the domestic law of the contracting states. Consequently, there are no general rules in the Model Conventions or in the Commentaries concerning how the provisions of the treaty should be applied.

    Speaking at the launch of “Dangers of Double Tax Agreement in Financing Development: a case study in Ghana,” Mrs. Ofori-Kwafo said the report emphasized the need to adopt a harmonized DTA model, which would take into consideration diversities in the African economies.

    She said in view of that, Tax Justice Network Africa (TJNA), in collaboration with its members of South and Eastern Africa Trade Information and Negotiation Institute (SEATINI Uganda), Civil Society Legislative Advocacy Centre Nigeria (CISLAC), Ghana Integrity Initiative (GII), Policy Forum Tanzania and Centre for Trade Policy and Development (CTPD) Zambia with support from Open Society Foundation (OSF) had conducted a joint study on the Dangers of DTAs in Financing Development in Africa with case studies of Ghana, Nigeria, Tanzania, Uganda, and Zambia.

    In general, the tax authorities of a country should apply the provisions of its tax treaties to prevent tax avoidance and evasion. This requires careful consideration of the inclusion of anti-abuse rules in tax treaties and the adoption of domestic anti-avoidance rules that can be applied to treaty abuses. However, in addition to ensuring that the appropriate anti-avoidance rules are in place, the tax authorities must have the capacity to interpret, apply and enforce those rules concerning treaty abuses.

    Given the African Continental Free Trade Agreement (AfCFTA), there is, therefore, the need for a thorough review and renegotiation of the Double Taxation Agreement to resolve challenges regarding tax evasion and avoidance in the continent.

    DISCLAIMER:

    The material contained in this publication is provided for general information purposes only and does not contain a comprehensive analysis of each item described. Before taking (or not taking) any action, readers should seek professional advice specific to their situation. No liability is accepted for acts or omissions taken in reliance upon the contents of this alert.

    AOA Professional Services is an indigenous tax, regulatory and advisory service firm driven by the values of professionalism and partnership. For further information on the subject matter, reach out to our Africa International Helpdesk

  • AfCFTA: Potentials & Challenges for MSMEs in Africa

    AfCFTA: Potentials & Challenges for MSMEs in Africa

    In 2018, 54 of the 55 countries that make up the African Union (AU) established the African Continental Free Trade Area (AfCFTA). It was created by the African Continental Free Trade Agreement to be a free trade area to fast-track economic development on the African Continent, especially through the small and medium-sized enterprises (SMEs).

    The AfCFTA has opened a $3.4 trillion borderless market created to present an opportunity and rekindle hopes for African recovery through trade in a post-Covid-19 world. As nations continue to battle a pandemic that does not respect national borders, the Intra-African trade is currently low at 14.4 percent of total African exports. The United Nations Conference on Trade and Development (UNCTAD) estimates that the AfCFTA could boost intra-African trade by about 33 percent and cut the continent’s trade deficit by 51 percent.

    The latest Economic Development report shows that about 34 percent of African households live below the international poverty line ($1.9 per day), and around 40 percent of the total wealth is owned by approximately 0.0001 percent of the continent’s population. Then the pandemic has exacerbated inequalities and vulnerabilities of marginalized groups, resulting in an additional 37 million people in sub-Saharan Africa living in extreme poverty.

    A key question is how economic growth through regional integration can contribute to poverty reduction, cut inequality, and foster inclusive development, which is the main objective of the African Union’s Agenda 2063. Reports have shown that the continent’s current untapped export potential amounts to $21.9 billion, equivalent to 43 percent of intra-African exports. An additional $9.2 billion of export potential can be realized through partial tariff liberalization under the AfCFTA over the next five years.

    So what are we saying here?

    • With the AfCFTA, the market potential is huge but there is an equally huge challenge, which is that of a wide poverty line in the continent.
    • MSMEs are at the centre of leveraging the potential of the market and also solving the problem of poverty through job creation.
    • MSMEs would also help reduce over-reliance on foreign goods while enhancing the production of locally made goods which would boost infrastructure within the African Continent.

    According to the National Bureau of Statistics (NBS) and the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), SMEs in Nigeria account for about 96 percent of registered Nigerian businesses, employ about 75 percent of the national labour force, and contribute 48 percent to the country’s Gross Domestic Product (GDP). A 2020 survey of 1,804 MSMEs across Nigeria by the Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture (NACCIMA) showed that more than 50 percent of those surveyed were most concerned about the threat posed by imported cheaper goods competing with local products due to the AfCFTA, while only 20 percent were aware of the existence of the AfCFTA.

    In conclusion, it’s not just policies and procedural shortcomings that have resulted in limited cross-border trade volumes in Africa. Medium Small and Middle-Scale Enterprises (MSMEs) and other stakeholders in Africa must look deeper into why intra-African trade has been slow to gain traction, leading to Africa’s ongoing heavy reliance on imports and taking advantage where necessary to grow their business and market share in Africa.

    DISCLAIMER:

    The material contained in this publication is provided for general information purposes only and does not contain a comprehensive analysis of each item described. Before taking (or not taking) any action, readers should seek professional advice specific to their situation. No liability is accepted for acts or omissions taken in reliance upon the contents of this alert.

    AOA Professional Services is an indigenous tax, regulatory and advisory service firm driven by the values of professionalism and partnership. For further information on the subject matter, reach out to our Africa International Helpdesk

  • Brand & Branding

    Brand & Branding

    A Brand! What comes to mind when you read, see or interact with the term as an MSME? Is it your logo? Or the colours of your business? Well, for most business owners, it is as much as the posers while others believe it includes your website, social media presence, etc. But is that all that it is?

    It may interest you to know that a brand is far much more than the aforementioned. In fact, for the most part, a brand is more abstract than concrete. A brand of any business is about anything – physical or not – that distinguishes a business from another. Beyond all that has been mentioned above, it will include your culture, value, and even corporate positioning in the minds of every stakeholder in your business; not just your customers but also your employees, regulatory bodies, etc.

    In short, branding is the process of building a brand and honestly it revolves around everything you are as a business and it also influences your success or failure as an enterprise.

    For most MSMEs, the focus is usually on their actual product or service, and with this comes a tendency to neglect the importance of developing a branding image. Branding is a medium that helps you to sketch your image in the minds of your customers. It separates you from the other businesses in the industry, nation, and the whole world.

    Your business will see a significant development when it is deliberate about building a brand. What do people know about your business? Is the perception good or bad? Are you law-abiding? Can your business be trusted enough in any transaction? You can see that it is far bigger than just logos, colours, and websites?

    Revenue and growth are the focus of most MSMEs. How does branding impact these? The following statistics provide the answers.

    “Your brand is the single most important investment you can make in your business.“

    Steve Jobs

    DISCLAIMER:

    The material contained in this publication is provided for general information purposes only and does not contain a comprehensive analysis of each item described. Before taking (or not taking) any action, readers should seek professional advice specific to their situation. No liability is accepted for acts or omissions taken in reliance upon the contents of this alert.

    AOA Professional Services is an indigenous tax, regulatory and advisory service firm driven by the values of professionalism and partnership. For further information on the subject matter, reach out to our Teleconsulting Desk

  • Outsourcing: What, Why & When?

    Outsourcing: What, Why & When?

    Every business – Small, Medium, or Large-sized – wants to grow. When the growth happens, it becomes the responsibility of the whole team to sustain the business’ competitive edge. Hence, the need to focus on strategic and technical competence arises while doing away with the company’s non-core functions.

    Here is where outsourcing comes into the picture. With plans to shape the future of business activities in place, keeping up with all the activities a company requires to exist internally takes up time, increases costs, impedes flexibility, efficiency, and performance,

    For most businesses, the best bet is to outsource some functions which are not core of their competence to profound professionals in a way that fosters productivity, reduces cost, and increases task delivery time as against having to do these tasks internally.

    According to Chuks Cohn – Founder & CEO of Varsity Tutors – businesses should outsource:

    • Tasks that are critical to operations but not a vital component of strategy such as Accounting, Tax Remittances, Talent Acquisition, etc.
    • Non-Core functions such as Digital Marketing, Website Development, Cleaning Services, etc.

    But when should you outsource some of your operational functions?

    Knowing when to outsource can provide the best results for your business. This is because using a vendor with the specialist skills that you do not have in your business can speed up delivery, ensure productivity, identify margin opportunities, and flag down risks. In turn, these help businesses focus on their competitive strengths and technical competence.

    Lydia Adams – Vice President, M&C Personiv – suggested that your business should outsource when you:

    • Need to lower costs.
    • Need to focus on your business-critical functions.
    • Need to free up time for strategic development.
    • Need to have profound professionals execute special tasks for the growth of your business such as due diligence, restructuring, business process improvement, etc.
    • The business is growing fast in terms of market share and demand just like the way Apple leverages outsourcing for efficiency.

    “If you deprive yourself of outsourcing and your competitors do not, you’re putting yourself out of business.”

    Lee Kuan Yew – Former Prime Minister of Singapore

    DISCLAIMER:

    The material contained in this publication is provided for general information purposes only and does not contain a comprehensive analysis of each item described. Before taking (or not taking) any action, readers should seek professional advice specific to their situation. No liability is accepted for acts or omissions taken in reliance upon the contents of this alert.

    AOA Professional Services is an indigenous tax, regulatory and advisory service firm driven by the values of professionalism and partnership. For further information on the subject matter, reach out to our Teleconsulting Desk

  • AfCFTA: The Ease of Doing Business in Africa

    AfCFTA: The Ease of Doing Business in Africa

    The African Continental Free Trade Area (AfCFTA) agreement will create the largest free trade area in the world measured by the number of countries participating. The pact connects 1.3 billion people across 55 countries with a combined gross domestic product (GDP) valued at US$3.4 trillion. The combined gross domestic product (GDP) of AfCFTA economies is valued at US$3.4 trillion.

    With the potential to lift 30 million people out of extreme poverty, achieving its full potential will depend on putting in place significant policy reforms and trade facilitation measures.

    World Bank Report

    The agreement will encourage trade relations in Africa by removing tariffs for over 90% of goods traded between member countries. Expectedly, it will lead to the free movement of people within the continent, thereby enabling a single market for air and road transportation.

    The just-concluded Intra-African Trade Fair (IATF2021) hosted by South Africa in Durban also revealed that the AfCFTA is poised to boost commerce across Africa, with $40 billion of trade and investment deals. According to the UN Economic Commission for Africa (UNECA), the AfCFTA agreement has the potential to boost intra-African trade by more than 50% from the low level of 13%.

    AfCFTA provides an opportunity to improve trade facilitation more widely in the continent at borders and along corridors between African countries. The trade facilitation agreement would provide the framework and access to knowledge to guide such improvements, and AfCFTA provides the political momentum and additional commitment mechanism to support broad implementation.

    In addition, the AfCFTA benefits member countries by lowering costs for consumers and producers, reducing administrative red tape, and reducing compliance costs. Of course, the reduction in tariffs will be of benefit to lower the prices of imported goods for consumers, as well as for producers using intermediate inputs.

    In some member countries like Nigeria, Minister of Industry, Trade and Investment, Adeniyi Adebayo, has said the President Muhammadu Buhari administration is adopting a legislation-backed policy to promote the ease of doing business in the country. He added that the revised Companies and Allied Matters Act (CAMA) 2020 and the Petroleum Industry Act 2021 have repositioned the country as an investment destination of choice in Africa. The minister further said that the African Continental Free Trade Area Agreement (AfCFTA) implementation plan is undergoing adoption by the Ministries, Departments, and Agencies (MDAs). According to him, the move is geared at ensuring that existing policy frameworks maximize benefits to the advantage of Micro, Small, and Medium Enterprises (MSMEs).

    In conclusion, the trade will grow substantially with the following stats:

    • The volume of total exports will increase by almost 29% by 2035.
    • Intracontinental exports increase by over 81%.
    • Exports to non-African countries increase by 19%.

    “It is clear that we must find an African solution to Africa’s problems, and that this can only be found in African unity. Divided, we are weak; united, Africa could become one of the greatest forces for good in the world.”

    (Dr. Kwame Nkrumah)

    DISCLAIMER:

    The material contained in this publication is provided for general information purposes only and does not contain a comprehensive analysis of each item described. Before taking (or not taking) any action, readers should seek professional advice specific to their situation. No liability is accepted for acts or omissions taken in reliance upon the contents of this alert.

    AOA Professional Services is an indigenous tax, regulatory and advisory service firm driven by the values of professionalism and partnership. For further information on the subject matter, reach out to our Africa International Helpdesk