THE African trade agreements have been cited as among major initiatives that can help boost agricultural imports and exports as well as curb the adverse effects of climate change by including actionable provisions, according to the latest Africa Agriculture Trade Monitor (AATM).
However, the report has underscored that the East African Community (EAC) has one of the highest ratios of agriculture to GDP among the regional economic communities examined, as well as the highest introversion index, indicating a high intensity of intraregional trade.
Such is owed largely due to zero customs duties on intraregional flows and high extra regional tariffs as well as improvements in logistic performance.
Published by AKADEMIYA2063 and the International Food Policy Research Institute (IFPRI) at the 13th Africa Food Systems Forum (AGRF), the 2023 AATM calls for concerted regional- and continental-level action toward sustainable trade flows and more environment-friendly trade policies.
The report has also delved into the negative impacts of the Russia-Ukraine war on fertilizers and food trade and recommends action to lessen the effects of the shocks on African countries and consumers.
The report finds that Africa’s regional trade agreements (RTAs) do not exert a significant impact on its agricultural trade. The analysis attributes this to “shallow” trade agreements that focus on tariff reductions only, with limited impact on the agri-food market.
The research highlights opportunities to include provisions on non-tariff measures and enhance their legal enforceability to accelerate intra-African agri-food trade. The report also calls for RTAs to include climate-related provisions to boost the contribution of trade to combating the negative impacts of climate change.
Executive Chairperson of AKADEMIYA2063, Dr Ousmane Badiane revealed that amid global shocks like Ukraine and COVID-19, as well as the climate crisis, which is emerging as the biggest threat to Africa’s agricultural trade development, trade policy is indispensable to leveraging agrifood trade as the lynchpin of Africa’s recovery and growth.
“The 2023 AATM analyzes opportunities to “deepen” trade agreements to increase intra-African trade while prioritizing import diversification by tapping into the continent’s natural endowments and the deployment of new and greener technologies to lessen the impact of global shocks like the Ukraine crisis. With the African Continental Free Trade Area (AfCFTA) agreement underway, there will be added value in policy reforms to streamline and harmonize agriculture-relevant frameworks toward increased food security and a larger agrifood global market share for Africa,” he said.
The report’s analysis draws lessons from Africa’s current engagements for application to future frameworks to enhance continental integration. For instance, enforceable provisions on non-tariff measures (NTMs), such as well-designed rules of origin and sanitary and phytosanitary (SPS) measures in trade agreements, can increase exports of agricultural products by up to 26 per cent, potentially through increasing market confidence and raising demand.
On the other hand, Director General at the International Food Policy Research Institute (IFPRI) Dr Johan Swinnen noted that the Ukraine crisis set in motion substantial price increases and significant supply chain disruptions for critical sectors such as fertilizers and food, particularly wheat and vegetable oils, given the high reliance on both Ukrainian and Russian imports.
“This year’s AATM includes important recommendations for making Africa less vulnerable to such supply shocks, such as stronger social safety net programs to build the resilience of vulnerable households, increasing production on the continent to minimize import dependency, as well as diversifying imports” Dr Swinned said.
Intra-African agricultural trade increased significantly since the early 2000s; however, figures from 2021 showed that it remained below its peak value of 16.1 billion US dollars recorded in 2013.
An analysis of the nutritional content of intra-African trade indicates that the top agricultural product traded within the continent is pure sucrose, which accounts for 4 percent of intra-African agricultural trade, while a closer look at the cotton value chain suggests that African countries are primarily competitive in unprocessed products.