This study explores the challenges, opportunities, and preparedness of Small and Medium-sized Enterprises (SMEs) in Ghana in relation to their participation in the African Continental Free Trade Area (AfCFTA). Utilizing the DESTEP (Demographic, Economic, Socio-cultural, Technological, Ecological, and Political/Legal) framework, the study reveals a comprehensive picture of the multifaceted environment faced by these SMEs as they venture into free trade under the AfCFTA.

In-depth interviews with SME owners and managers across diverse sectors revealed a complex landscape of both significant challenges and potentially transformative opportunities. Challenges range from attracting and retaining skilled labor, navigating economic volatility and securing finance, dealing with socio-cultural differences, accessing advanced technology, complying with diverse environmental regulations, and navigating complex political and regulatory environments. Despite these challenges, respondents also identified exciting opportunities, including tapping into new markets, leveraging economies of scale, spurring innovation through cultural exposure, adopting sustainable practices, and benefiting from reduced trade barriers and improved market access.

In preparation for these complexities, SMEs have demonstrated strategic actions such as bolstering financial planning and risk management strategies, adapting business practices to accommodate socio-cultural differences, investing in technological infrastructure, adopting environmentally-friendly practices, and deepening their understanding of regulatory requirements.

The findings underscore the importance of a detailed understanding of the DESTEP factors for SMEs intending to participate in free trade agreements and contribute to the growing body of knowledge on SME internationalization in developing economies. This study could inform policy-making and strategic business decisions, ultimately fostering the successful integration of Ghanaian SMEs into the AfCFTA and beyond.