Africa: Lift barriers, increase trade – Economy – Al-Ahram Weekly

The 2020 Africa Agriculture Trade Monitor (AATM), published by the International Food Policy Research Institute (IFPRI), has recently been released, providing an analysis of continental and regional trends in African agricultural trade flows and policies.

According to the AATM report, the third in a series of flagship reports, policy reactions among the world’s leading food and agricultural producers during the coronavirus pandemic since the beginning of the year have caused disruptions in world supply chains and threatened food-security systems in food import-dependent countries.

Furthermore, measures to contain the virus have magnified the negative impact of the crisis on intra-continental trade flows and the livelihoods of millions of people across Africa.

But opportunities lie in the crisis, as the foreword to the report points out. Among these is a strong political will to improve intra-African integration with the ratification of the African Continental Free Trade Area (AfCFTA) agreement.

This agreement, launched in July 2019, aims to eliminate tariff and non-tariff measures on goods, improve continental integration, and speed up customs procedures that remain a serious barrier to trade performance in Africa.

According to the report, countries should not let the pandemic stop progress towards economic integration. It said that agreements like the AfCFTA could provide not only a solid basis for long-term economic development, but also a means of effectively fighting future pandemics by facilitating the cross-border trade of food and medical goods.

According to the report, virtual negotiations on the AfCFTA could begin in the coming days and set a new start date for its implementation, possibly before 1 January 2021.

A second opportunity lies in an agreement by African states to establish trade corridors and reduce duties to enable the transit of essential goods that are fundamental to combating the pandemic. These short-term measures could also clearly increase intra-African exports, the foreword to the report said.

The Southern African Development Community (SADC) and the Common Market for Eastern and Southern Africa (COMESA) are the largest economic players within the continent, said the report, followed by the Economic Community of West African States (ECOWAS), the Arab Maghreb Union (AMU), and the Economic Community of Central African States (ECCAS).

“The current export patterns within the different African regions are sufficiently dissimilar to suggest there is room to expand intra-regional trade within the continent,” the report said, calling for more coordinated efforts to create a more integrated market and reduce the negative effects of non-tariff barriers and behind-the-border barriers.

African agricultural exports showed an upward trend between 2003 and 2018, said the report. Furthermore, the African countries increased exports to new destinations such as Brazil, Russia, India, China, and other Asian countries, including Saudi Arabia, Vietnam, the United Arab Emirates, Turkey, Malaysia, and Pakistan. Cocoa beans, cashew nuts, tobacco, coffee, oranges, cotton, sesame seeds, black tea, cocoa paste, and fresh grapes were the 10 most exported agricultural products.

Exports to the EU fell from 45 per cent of the total in 2005-2007 to 36 per cent in 2016-2018. However, in current dollar terms, EU imports of Africa’s agricultural products saw a sustained upward trend, despite the decrease in share, and the EU has remained the top destination for African agricultural exports. The same goes for the US and intra-African destinations, which also grew in value, though their share remained unchanged at five and 20 per cent, respectively.

According to the AATM report, Africa’s agricultural exports have increased steadily over the past 20 years within the continent, but more so within its various regional economic communities. For example, SADC and COMESA member states retained 84 per cent and 66 per cent of their intra-Africa exports within their respective regions in 2016-2018, and ECOWAS, AMU, and ECCAS also retained 79, 60, and 46 per cent, respectively.

Moreover, the share of exports within each regional economic community was significantly larger than the share of world agricultural exports. This could be explained by the geographic proximity, cultural similarities, historical trading relationships, and preferential trade agreements, it said.

The report tracks increased exports of food products such as maize and wheat, but also processed foods such as soups, broths, and food preparations, “reflecting growth in processed food consumption, along with demographic shifts, growing urban food demand, and changing lifestyles and habits in rural…

Read More: Africa: Lift barriers, increase trade – Economy – Al-Ahram Weekly

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