Across the African continent, small and medium enterprises (SMEs) are the lifeblood of economies. They employ millions, drive innovation, and power cross-border trade in ways that policymakers often underestimate. Yet, when it comes to conversations around tax and trade—especially in the era of the African Continental Free Trade Area (AfCFTA)—their voices are still too often missing from the table.
This week, I want us to focus not on frameworks or technical tax models, but on the lived realities of African entrepreneurs who are trying to grow businesses across borders and struggling under the weight of fragmented, confusing, and sometimes punitive tax systems.
The Everyday Tax Frictions No One Talks About
One of the most striking things I’ve heard from entrepreneurs is not that they don’t want to pay taxes—it’s that the system makes it difficult to comply.
Imagine this: A small fashion brand in Accra gets an order from Nairobi. They’re excited—this is growth. But suddenly, they’re thrust into a maze of forms, unfamiliar customs classifications, and unclear tax obligations. They’re told they might qualify for a VAT exemption under AfCFTA, but no one can explain how to access it. They’re bounced between border agents, tax offices, and third-party brokers.
Weeks later, the goods are still stuck. The customer is frustrated. The entrepreneur is exhausted. And next time? They might not even bother.
This story plays out every day across Africa.
- SMEs face multiple VAT regimes, with little clarity on input refunds
- Customs systems are inconsistent and under-resourced
- Documentation requirements are duplicative and rarely digitised
- And often, border taxes are collected informally, raising costs without accountability
The result is a reality where SMEs either absorb these inefficiencies—or give up on formal trade altogether.
The Psychological Cost of Tax Confusion
Beyond the financial burden, there is a psychological tax: frustration, fatigue, and the quiet erosion of trust in public systems.
Entrepreneurs often tell me:
- “I want to be formal, but no one explains the rules.”
- “The system feels like it’s built to punish, not support.”
- “Even when I follow the process, I still get penalised.”
This sentiment matters. Because when people feel that the tax system is against them—not working for them—they disengage. They underreport. They remain in the informal sector. Not out of rebellion—but out of exhaustion.
The Disconnect Between Policy and Practice
On paper, the AfCFTA includes commitments to support SMEs. Many tax authorities across the continent have policies to improve access, digitise systems, and simplify registration.
But the on-the-ground reality is different:
- Many border points still rely on manual processing
- There’s a disconnect between national tax bodies and customs
- Information isn’t translated into languages or formats that SMEs can use
- And feedback loops between traders and policymakers are nonexistent
We cannot build an inclusive trading bloc if our tax systems remain this disconnected from the people they are meant to serve.
What SMEs Are Actually Asking For
The good news? Most SMEs aren’t asking for tax exemptions or special treatment. They’re asking for clarity, fairness, and dignity.
Here’s what they say they need:
- Simplified tax processes – Clear, step-by-step guides that explain what to do, when, and why.
- Language accessibility – Materials and support in local languages—not just English or French.
- Digital platforms that work – Systems that reduce human error, speed up processing, and provide real-time updates.
- Responsive support – Helplines that pick up, officers who understand SME realities, and complaint mechanisms that work.
- Formalisation without fear – Incentives to register without the risk of immediate penalties or backdated taxes.
These aren’t radical asks. They’re basic design requirements for a functioning system.
The Gendered Layer of the Challenge
We must also acknowledge that a large percentage of SMEs across Africa are women-led. And these women face additional layers of exclusion:
- Less access to tax education
- Limited digital literacy in some regions
- Higher vulnerability to harassment at border points
- And cultural norms that deprioritise their businesses
Any reform that ignores the gendered experience of taxation will reinforce existing inequalities.
Why This Moment Matters
AfCFTA is not just about opening borders—it’s about rethinking how we enable enterprise across the continent. And taxation is a huge part of that.
Right now, we have an opportunity to redesign systems:
- To shift from punishment to partnership
- From paperwork to platforms
- From complexity to clarity
But we can’t do this without SMEs in the room. Not just as case studies—but as co-creators.
A People-Centered Tax Reform Agenda
Here are five policy shifts that would bring tax systems closer to the people:
- Mandate SME representation in national tax dialogue forums
- Co-design tax platforms with end users (traders, women, youth)
- Simplify and harmonise documentation across regional blocs
- Invest in tax literacy campaigns, using radio, WhatsApp, and community leaders
- Create safe spaces for feedback—and respond to it transparently
These are not quick fixes. But they are powerful steps toward restoring trust—and building systems that serve.
Final Thoughts
Tax and trade are not abstract policy areas. They’re daily realities for people trying to survive and build.
If we want AfCFTA to be more than a headline, we must listen to what small businesses are saying. We must understand their frustrations, honour their resilience, and bring them into the reform process as partners—not problems.
Because when SMEs thrive, Africa thrives.
And when tax systems work for the smallest among us—they begin to work for all of us.