Enhancing capabilities of youth and women led MSMEs on digital Intra-African market opportunities under the AfCFTA

In Zambia although RTAs and accompanying policies exist to promote regional trade, at the micro level the translation of these policies has not had the desired effects on Cross Border Traders and MSMEs. CBTs and MSMEs still face barriers that hinder women and youth led MSMEs in particular from harnessing opportunities under regional trade. 

The main objective of Regional Trade Agreements (RTAs) is to stimulate economic growth in participating countries through increased trade, economies of scale, knowledge, and technology transfer. The African Continental Free Trade Agreement (AfCFTA) establishes the world’s largest free trade area by number of countries and constitutes a significant milestone towards the realization of the African Union’s Agenda 2063 for the socio-economic transformation of the continent. Zambia, through the UN, has supported trade facilitation by supporting the Zambian Government to develop, in a fully consultative manner, a 3-year national Strategy on the implementation of the AfCFTA and Roll out plan of activities. At the micro level the following key barriers continue to hinder women and youth led MSMES  from accessing regional trade opportunities namely information gap on market opportunities, information and knowledge on trade related issues such as scope and implications of AfCFTA and other trade agreements; language barriers beyond borders; difficulties in accessing productive inputs (including sourcing cost-efficient inputs from within national/regional markets) and financial resources, especially cross border financial solutions and regulatory barriers to trade. Evidence from the Africa Borderlands Centre (ABC) Experiment conducted in collaboration with the Zambia Accelerator Lab with the Cross Border Traders (CBTs) based in Livingstone revealed that most CBTs that were trading with South Africa, Botswana, Namibia and Zimbabwe reported having no access to information on benefits that could be actualized under the regional trade agreements such as SADC, COMESA and AfCFTA.  This issue is further compounded by lack of information in local languages and designated focal points to consult with CBTs at the borders on these issues, deepening cases of corruption, and harassment particularly for women. Further although 95% had access to feature phones barriers to participating in regional trade using digital platforms included low digital literacy, weak linkages with online logistics and delivery solutions.  

The Zambia Accelerator Lab has been an agile incubator of ideas and local solutions surfaced after rigorous processes of sensing, exploring, testing, and building partnerships to position identified solutions for growth. The Accelerator Lab model aims to promote scalable solutions within the country office by linking tested innovative approaches to strategic offers that compliment Government efforts. In line with UNDP’s Renewed Strategic Offer in Africa - Youth and Women Empowerment through regional integration, and Country Programme Document, Output 2.2, this year the Accelerator Lab Zambia launches an ambitious effort at designing a cross country experiment based on a portfolio of innovative solutions that reduce the barriers informal businesses face in accessing regional markets, accessing opportunities under Regional Trade Agreements (RTAs) and adoption of digital tools that promote trade particularly for women and youth led MSMEs. The Accelerator Lab will leverage the Network through collaborations with AccLab Namibia and build on previous portfolios that surfaced youth and women led businesses through the National Innovation Initiative (NII) [1], Experimentation Programme (EP) [2] and building on lessons from the ABC CBT Experiment [3]. This portfolio aims at cocreating and designing key interventions(inclusive of digital) needed to realize an inclusive Africa Continental Free Trade Area (AfCFTA), that benefits women and youth led businesses, targeting MSMEs in Lusaka and CBTs operating on the Zambia-Namibia-Botswana borderland areas.  [1] The National Innovation Initiative (NII) was established in 2020, it is a joint initiative to map out existing innovations across Zambian communities aimed at supporting the most promising initiatives with the highest potential for social and economic impact. Since 2020 the NII has surfaced over 3000 innovations across the country and supported 110 in agro-processing, climate change, energy, fin, edu and health tech. These pre commercialisation stage innovators that have bankable business proposals developed through business development training and will be the target of this portfolio.  [2] The Experimentation programme is part of the Innovators journey- a pathway to scale by supporting innovators wit R&D to support the commercialization and investment for scale. The programme has supported 15 innovators with R&D and certification support. These pre commercialisation stage innovators that have bankable business proposals developed through business development training and will be the target of this portfolio. [3] The ABC CBT experiment entitled Improving livelihoods for informal cross border traders and borderlands trading communities was conducted in Livingstone, Zambia. The project was aimed at assessing the adoption of digital innovations financial/savings management by Cross Border Traders (CBTs) for Victoria falls and Kazungula boarders, results from the baseline highlighted that the Innovation Village Savers improved cross borders pooled savings by providing a transparent platform to manage their pooled savings. The CBTs highlighted barriers to trade such as lack of information, access to digital platforms and logistics.

What is required to unleash the potential of Zambian youth & women led MSMEs/ CBTs for digital Intra-African market opportunities under the AfCFTA

What are the barriers do MSMEs producing local products face in accessing regional markets and opportunities under the AfCFTA? What challenges do CBTs face in accessing opportunities under AfCFTA? How would a digital platform support regional trade and would it be a solution to trade barriers MSMEs and CBTs in Zambia face to improved trade under AfCFTA?

The Portfolio heavily relies on using the AccLab user centered key services to synthesize existing information on the challenge and to cut across silos by creating platforms that bring together various players within the sector to find solutions and design interventions that can be tested to promote regional trade. This will call for the use of sensemaking, co- creation, participatory design and once the cross-country experiment is designed a proof of concept will be implemented. Leveraging the National Innovation Initiative (NII) solutions catalogue, existing digital solutions will be mapped and identified for possible implementation if it addresses the identified barriers.

Written policies will provide the guiding frameworks that should be prevalent on the ground that we can measure progress against. All other methods listed will be used by the team to validate barriers/challenges and will support in generating data for the proof of concept.

Potential Country Office Supplier Development Programme, UNDP AfCFTA regional programme, Ministry of MSMEs and MCTI