News publication African Business and the Pan-African Private Sector Trade and Investment Committee (Paftrac) have jointly launched the third yearly Paftrac Africa CEO Trade Survey, which showed that 40.3% of African financial services industry participants want to develop a single African currency akin to the euro.

“This will exponentially increase the speed of transactions, as well as cut down on the difficulties in going from one currency to another while engaging in cross border trade, both for operators as well as for their financial counterparts,” financial services provider Afreximbank policy consultant Patrick Utomi said while presenting the findings at the survey’s launch on November 21,

In addition to multiple currencies hindering African economic growth – at least from the financial sector’s point of view – a more open pan-African banking system was called for by 42.79% of respondents.

The data shows that business leaders are generally upbeat about Africa’s economic prospects, but also wary of the risks posed by rising inflation and debt burdens on the Affrican Continental Free Trade Area’s (AfCFTA's) implementation and the trade climate.

The findings also indicate a need for more cooperation and dialogue between the private sector and policymakers to boost trade facilitation and innovation.

The survey, which serves as a useful private sector barometer on intra-African trade and investment, helps provide a gauge of private-sector sentiment on trade and investment within Africa.

The survey gathers the opinions of more than 1 000 senior executives from firms operating across the continent. It covers topics such as the effects of the AfCFTA, the current and future trends of African trade flows, and the trade-related ambitions and obstacles of the respondents.

The 2023 edition of the survey was conducted in partnership with the AfCFTA Secretariat, Afreximbank, AUDA-NEPAD, Botho, International Islamic Trade Finance Corporation and the International Trade Centre.

In the latest survey, a majority of the respondents were small- to medium-sized enterprises (SMEs). Most of the companies surveyed had been in operation between one and five years, employing on average of between one and 50 people.

"This speaks to the fact that a majority of businesses across Africa are SMEs – about 80%," Utomi said.

The survey found that rising inflation was rated by respondents as likely to have the most significant impact on Africa's economy, with rising debt levels coming in second, high interest rates coming in third, and global security issues fourth.

"[Rising inflation] has a big impact on businesses, especially those that have to deal in foreign exchange and cross-border trade," Utomi explained.

Despite these headwinds, he said that most businesses in Africa still appeared to be upbeat regarding the effects of the AfCFTA on their business, with more than 50% believing that the AfCFTA will have a positive effect.

The survey, which spanned the agriculture, manufacturing, mining, transportation, logistics and pharmaceutical sectors across Africa, revealed the widespread challenge faced by businesses in securing adequate financing, revealing it as the predominant factor hindering operations and growth.

“This was overwhelmingly the one factor that was affecting businesses the most. And it goes to show that if financing does not exist, then anything else you're speaking about in terms of cross-border trade and AfCFTA is nothing more than rhetoric,” Utomi said.

Within the agriculture sector, respondents identified financing schemes, or the lack thereof, as the primary obstacle, closely followed by a deficiency in research and domestic innovation. Additionally, stakeholders in the agriculture sector called for the establishment of more agricultural clusters and special economic zones, viewing these as potential solutions to boost production.

In the transportation and logistics sector, finance emerged as the most significant stumbling block, with 25% of respondents expressing that scaling their businesses is unattainable without improved access to finance. Other factors affecting the industry include challenges related to industrial policies, human capacity and capital, and the need for the development of electronic marketing platforms. Notably, the transport and logistics sector is witnessing a growing impact from technology, emphasizing the urgency of addressing these challenges to keep pace with the evolving landscape.

Utomi noted some of the policy recommendations made by Paftrac following the conclusion of the survey.

Among these is that governments should aim to boost value-added production and exchange within Africa based on factor endowments and comparative advantages. Additionally, more information and guidance should be provided to African business leaders, especially SMEs, on AfCFTA opportunities. Cross-border aggregators should be incentivised to connect producers and consumers and increase the regional trade share.

Moreover, the public sector should collaborate more with the private sector and development institutions to support businesses with credit training, investment, and trade-friendly policies and regulations.

Finally, the implementation and impact of the AfCFTA should be monitored and evaluated, with any challenges and gaps addressed as soon as possible.