AfCFTA’s Mene focuses on supporting SMEs to propel digital trade in Africa.

Wamkele Mene, the Secretary General of the African Continental Free Trade Area (AfCFTA), stated on Wednesday, January 22, that access to financing and investment in digital public infrastructure should empower young Africans’ innovative spirit and their capacity to start their own businesses through Africa’s digital economy.

“We believe that Africa’s digital economy is a very important aspect of overall intra-Africa trade,” he stated while speaking at the World Economic Forum with the subject “Collaboration for the Intelligent Age.” It tackles the problem of payment, one of the daily struggles we all face. On January 20, in Davos, Switzerland, the 2025 Annual Meeting of the World Economic Forum (WEF), which is undoubtedly the biggest assembly of the world’s most powerful business and political leaders, began.

According to Mene, flying directly between countries is currently more convenient than sending money directly. He stated that the AfCFTA Protocol on Digital Trade will leverage the adoption of emerging technologies, including SMEs, and draw investment in digital public infrastructure. He also mentioned the need for a smooth, interoperable payment system that tackles the unemployment problem.

The 11 sections of the protocol on digital trade, a comprehensive framework created to facilitate digital trade throughout Africa, cover a wide range of topics, including emerging technologies, market access, data governance, business and consumer trust, digital trade inclusion, government regulation transparency, and capacity building.

SMEs account for the majority of Africa’s GDP, but cross-border trade is disproportionately expensive. Big businesses and multinationals are fine since they have instant access to markets, but SMEs require trade finance assistance.

In order to mobilize resources and increase the availability and affordability of trade credit, he continued, organizations such as the Africa credit Corporation, AfreximBank, and African Development Bank can fill this gap.

“To mobilize resources and lower the cost of money for trade in Africa, we must collaborate with commercial banks and development finance institutions,” he stated.

Mene pointed out that in order to power Africa’s digital economy by 2040, the continent will require roughly 400 data centers, an investment that will create jobs for young people.

In February, heads of state are scheduled to ratify the final document of the digital commerce agreement.

According to Africa Finance Corporation CEO Samaila Zubairu, raising money for SMEs and young entrepreneurs is a series of deliberate actions aimed at transforming African primary economies to add value to products and, consequently, create jobs that will eventually contribute to the economy through savings and investments, which will then be used to raise venture capital for SMEs.

In order to address Africa’s infrastructure shortage and difficult operating environment, sovereign African states founded the Africa Finance Corporation, a pan-African multilateral development financial institution, in 2007.

“We must be deliberate in halting the export of raw materials, processing what we have, and creating high-quality jobs that would give youth high-quality wages and opportunities for innovation,” he stated.

“If you don’t have domestic resources, there cannot be development,” he added, adding that this can be combined with capitalizing commercial banks by providing them with a wide range of investment opportunities.

The average private loan rate in 19 African nations, according to data gathered by the International Monetary Fund, is 25%, while in Southeast Asia it is only 9%.

The main cause of the problem, according to Leila Fourie, Group CEO of the Johannesburg Stock market (JSE), the biggest stock market in Africa, is the sovereign rating, which has a tendency to inflate the risks in comparison to the actual default rate.

“The way foreign investors view a nation will influence their decision to invest there or not. Investors frequently won’t contribute money to expand the economy if there is excessive risk indexing and a lack of policy certainty, she continued.