Question

3. a) Discuss how the underpinning policy objectives of the Continental Free Trade Area (CFTA) in Africa and the European Single Market in the European Union affect the ability for small and medium-sized enterprises to grow.

b) Using the example of Nigeria, describe the long-term effects of entrepreneurship education at secondary education level.

Answer 1

Continental Free Trade Area (CFTA)has been signed by 54 of the 55 African Nations . CFTA will help the small and medium enterprises (SME) in Africa to grow in the following way:

1. Easy access to entire African market for all SME segment without any duties or barriers to trade like tariffs makes businesses more competitive.

2. Ability to expand within the African Union becomes easy as they no longer need to worry about regulatory hurdles.

3. Ease of import and export for all goods being produced in Africa will raise the economic levels and reduce poverty.

4. The treaty makes African nations less dependent on imports from EU and other continents and their ability to negotiate with other countries is increased.

5. Development of various industries which require products from various nations which need to be assembled for example cotton value chain, automotive etc.

European Single Market in the European Union has allowed for following benefits to SME sector:

1. Seamless supply chain for all small companies who act as suppliers to global automobile and engineering companies as there are no border checks and customs to be paid. This has reduced inefficiencies and reduced costs.

2. EU negotiates with other countries as one block and gets better deals and conditions for its SME segment.

3. EU has once currency Euro for most member nations which reduces the currency risk and makes trade more easy.