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African borders: Building big businesses in Africa

Every June 7th, the African Union (AU) marks the African Border Day: a day set aside to celebrate and highlight the work of the African Union Border Programme (AUBP) in uniting and integrating Africa. At this time, the importance and socioeconomic impact of borders on Small and Medium Enterprises (SMEs), cannot be overemphasised. Particularly for high growth businesses providing essential services within and beyond borders.

Borders are more than mere lines on papers or physical structures that limit citizenship and movement. From an investment and financial perspective, borders – and ensuing consequences – are critical in the development of the African continent and its ability to achieve the Sustainable Development Goals. Currently, regulatory and currency hurdles inhibit the execution of effective pan-African strategies as the kaleidoscope of each country’s unique policies and regulations present an uphill task for businesses hoping to scale and serve the continent’s one billion-plus population. SMEs, already underfunded, under-resourced and stretched, are hamstrung by costs, hoops, and hurdles of expanding and trading across borders.

To build sustainable businesses at scale, Africa requires a robust ‘local’ supply chain across and between its states and common regulations and currencies. This uniformity can be achieved through the active promotion of regional trade and integration enabling businesses to implement a pan-African strategy without recourse to global supply chains. Thus creating local value chains that extend markets across countries. 

A rethink of the continent’s borders is essential for the effective transnational movement of people, businesses, and products. Agreements and policies, like the Africa Continental Free Trade Area (AfCFTA), are a step in the right direction. The prayer is that when it eventually takes off, it will result in the broader export and use of innovation to boost the growth and development of African businesses and economies.

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