ABSTRACT: The emergence of Phase 2 of the African Continental Free Trade Area Agreement (AfCFTA) raises the stake for improved business environment for firms in Africa. Although the AfCFTA is expected to unlock business expansion and sustainable development, the fate of micro, small and medium-sized enterprises (MSMEs) is still mired in doubts. It has been contended that MSMEs will expand exponentially through the uptake of preferences and exploiting expanded market access opportunities across borders. Conversely, there is contention that MSMEs may not fare well in cross-border trade and investment because of compliance costs and unpalatable doing business environment. This article assesses the dynamics and contends that there should be national and regional strategies to address the constraints facing MSMEs. Arguably, this will facilitate productive participation of MSMEs in the optimization of opportunities afforded by the AfCFTA and their capacity to contribute to sustainable development.