FAO, African Union Commission launch a guide to boost intra-African agricultural trade under AfCFTA

By The Inspirer staff writer

The Food and Agriculture Organization of the United Nations (FAO) and the African Union Commission’s Department of Agriculture, Rural Development, Blue Economy and Sustainable Development (AUC-DARBE) have launched a guide to boosting intra-African agricultural trade under the new African Continental Free Trade Area (AfCFTA) agreement.

The launch event took place on April 15, 2021 in Accra, Ghana.

The Framework for Boosting Intra-African Trade in Agricultural Commodities and Services is a blueprint for expanding agricultural trade between African countries and aims to unlock the potential of the agricultural sector to contribute to sustainable and inclusive growth for Africa.

The Framework will help policy-makers and the private sector to develop strategies, policies and programmes to promote intra-African agricultural trade and the development of agricultural value chains, so that stakeholders, including farmers, small and medium agri-businesses, women and youth, can reap the benefits of the AfCFTA single market.

Action areas include trade policy, trade facilitation, productive capacity, trade-related infrastructure, trade finance, factor market integration and cross-cutting issues including the strengthening of trade and market information systems.

According to a joint press release from the two entities, increased agricultural trade between African countries can drive sustainable development and play a pivotal role for the transformation of the food systems.

The AfCFTA began trading on 1 January 2021 and is the largest free trade area in the world in terms of the number of countries covered. It represents a market of 1.2 billion consumers.

Increased trade represents a paradigm shift away from business as usual and is an important part of the collaborative work towards boosting food security and nutrition for all Africans.

FAO Assistant Director-General and Regional Representative for Africa Abebe Haile-Gabriel, African Union Commissioner Josefa Sacko, and AfCFTA Secretary-General Wamkele Mene jointly stated in the publication’s foreword that the Framework provides a timely catalyst for the transformation to more efficient, inclusive, resilient and sustainable agri-food systems, sustainable development and prosperity in Africa.

“A key priority is the pursuit of industrial transformation policies and programmes that support the private sector to add value to African exports, compete with imports from outside Africa and expand opportunities for job creation,” they said.

Africa is a net food-importing region of commodities such as cereals, meat, dairy products, fats, oils and sugar, importing about USD80 billion worth of agricultural and food products annually. A small share of Africa’s total agricultural trade is with other African countries. Intra-African agricultural trade is estimated to be less than 20 percent.

African countries have undertaken commitments to remove tariffs on 90 percent of over 5,000 tariff lines and to liberalise services. It is estimated that tariff liberalisation in the transition phase could generate welfare gains of up to USD16.1 billion, and growth in intra-African total merchandise trade of 33 percent, up from 15 percent.

The AfCFTA cames after African Heads of State and Government committed in 2014 to triple intra-African trade in agricultural commodities and services by the year 2025 as part of the Malabo Declaration.

Taping into Africa’s agribusiness potential

According to the World Bank, Africa’s food systems which were valued at US$313 billion a year as of 2013, could triple to $1 trillion by 2030 if governments and business leaders radically rethink their policies and support to agriculture, farmers, and agribusinesses, which together account for nearly 50 percent of Africa’s economic activity.

A World Bank report – Africa Can Help Feed Africa: Removing barriers to regional trade in food staples – which was released in 2012 indicated that Africa’s farmers can potentially grow enough food to feed the continent and avert future food crises if countries remove cross-border restrictions on the food trade within the region.

The World Bank pointed out that the continent would also generate an extra $20 billion in yearly earnings if African leaders can agree to dismantle trade barriers that blunt more regional dynamism.

The Bank’s report also pointed out that rapid urbanisation will challenge the ability of farmers to ship their cereals and other foods to consumers when the nearest trade market is just across a national border.

As per the African Development Bank (AfDB), there is a need to invest US$45 billion per year to harness the power of agriculture and move up the value chain to create jobs and wealth. At present, AfDB estimates that only US$7 billion is invested in the sector.