UNDP Positions Eswatini to Benefit from E-Commerce in the African Free Trade Area

April 21, 2021

UNDP positions Eswatini small businesses to benefit from E-Commerce in the African Free Trade Area.

By Mantoe Phakathi

UNDP Eswatini is exploring opportunities for e-commerce for Micro, Small and Medium Enterprises (MSMEs) under the newly-established African Continental Free Trade Area (AfCFTA), a brainchild of the African Union (AU). Founded in 2018 with the aim of boosting Africa’s trading position in the global market, trading under the AfcFTA started in January 2021.

To fulfil its mandate of supporting the Government of the Kingdom of Eswatini to eradicate poverty by creating sustainable jobs, UNDP Eswatini is eyeing AfCFTA to allow local MSMEs access to the continental market.

Partnership Agreement for COVID Recovery through Enhanced Trade

This follows the signing of the partnership agreement between the United Nations Development Programme (UNDP) and the AfCFTA Secretariat on March 29, 2021. The partnership agreement was signed by UNDP Regional Director for Africa, Ms. Ahunna Eziakonwa, and AfCFTA  Secretary General, H.E. Mr. Wamkele Mene, who was accompanied by Ambassador Fatima Mohammed Kyari, Permanent Observer of the AU to the United States.

The aim of the partnership agreement is to promote trade as a stimulus for Africa’s socioeconomic recovery from the COVID-19 crisis, and as a driver of sustainable development, particularly for women and youth in Africa, in line with the SDGs and Agenda 2063, Africa’s development blue print.

The agreement between the two parties came shortly after Ms. Eziakonwa’s virtual mission to the Kingdom of Eswatini on March 22-26  where she met with different partners including senior government officials such as the Acting Prime Minister, Senator Themba Nhlanganiso Masuku. She also participated in the launch of the new Country Programme Document (CPD) for the Kingdom of Eswatini 2021-2025.

Addressing MSME Trade Barriers to Empower African Businesses

In light of these developments, UNDP Eswatini’s Resident Representative, Ms. Rose Ssebatindira, convened an engagement meeting between the country office and the Africa E-Trade Group (AeTrade) to discuss possible collaborations that could allow Eswatini traders access to the continental market under AfCFTA.

“At a global level, we’re already in partnership with the trade agreement and my team and I are very keen to see how this translates at a country level,” said Ssebatindira during the virtual meeting held on April 14.

AeTrade was formed 11 years ago by a group of Africans in the diaspora who collaborated with the AU in 2018 by signing a Memorandum of Understanding for a partnership to help businesses in the informal sector transition to formality in all 54 member states through digital means.

As noted by the UNDP staff, MSMEs in Eswatini, like their peers in other countries on the continent, face numerous structural barriers when trading within Africa, including high tariffs,  cumbersome customs processes, unreliable payment systems, breach of contracts and poor adherence to standards.

AeTrade works on  addressing these barriers. AeTrade Chief Executive Officer and Chairperson, Mr. Mulualem Syoum, told the UNDP Eswatini that streamlining and digitizing services will enhance trade within the continent. He said there should be a focus in the digital infrastructure to allow connectivity for the ease of doing business.

“Africa is the richest continent in the world, but we need the infrastructure to make the most of it,” he said, adding: “This will allow Africans to manage their own resources rather than having to export raw materials.”

He said the aim is to create 22 million jobs by enabling 600 000 entrepreneurs from African countries to access regional, continental and global markets.

Connecting African Traders through the Sokokuu Market Place

Responding to the infrastructure challenge, AeTrade has created a practical online trade tool, Sokokuu Market Place. According to AeTrade Acting Chief Operations Officer, Ms. Treasure Maphanga, Sokokuu aims to enrol 2 500 MSMEs each year with a target of reaching 350 000 African subscribers.

Besides removing trade barriers and enabling the free movement of goods and services, AeTrade aims to introduce a digital lending platform within Sokokuu to give MSMEs affordable financing, said Maphanga.

“A digitally-connected Africa is here,” said Maphanga, who is also the Executive Director for the AU Trade Group Regional Headquarters for Southern Africa based in Eswatini. “This is an opportune time because COVID-19 has ignited digital trade such that being online is no longer a luxury but a development imperative.”

A Model for Africa: Opportunities for E-Trade in Eswatini

Eswatini could be used as a model for other African countries through a potential partnership of mobilising resources to build the capacity of vendors enrolled in Sokokuu, said Maphanga.

Speaking at the same event, UNDP Strategic Advisor to the Regional Director for Africa, Ms. Joy Kategekwa, concurred, adding that Eswatini could benefit from AfCFTA by focusing on value addition and building the capacity of women and youth to become export entrepreneurs.

“UNDP country offices can help by surrounding themselves with partners who are helping the women and youth who are trying to export,” she said.

With a new Country Programme Document (CPD) in place, Kategekwa urged UNDP Eswatini to explore ways of positioning AfCFTA in the new five-year programme.

Ssebatindira echoed this, highlighting that AfCFTA provides a golden opportunity as the country is about to roll out the new CPD through new development programmes and projects.

“We have powerful partners and a lot of content and the challenge is how to narrow it down to what we can actually do,” she said.  

(Mantoe Phakathi is the Communication Specialist at UNDP Eswatini)