The African Continental Free Trade Area (AfCFTA) agreement, which entered into force in May 2019, promised to unlock the full potential of Africa’s agricultural sector and accelerate sustainable economic growth and food security throughout the region. However, recent crises, from the conflict in Ukraine to the aftershocks of the Covid-19 pandemic and the accelerating impact of climate change, have given rise to significant setbacks for continental food security and prosperity.
Still, governments and policymakers can rely on recent data to fully leverage landmark continental trade agreements, such as the AfCFTA, to facilitate trade flows while simultaneously diversifying imports to mitigate the effects of current and future global shocks.
A new report published by AKADEMIYA2063 and the International Food Policy Research Institute (IFPRI) analyses continental and regional trends in African agricultural trade flows and policies, with a special focus on the East African Community (EAC), the cotton value chain, and the impact of the Russia-Ukraine war on African countries.
An increase in intra-African trade
In particular, the report finds that intra-African agricultural trade has increased significantly since the early 2000s. Nonetheless, intra-African trade represents a relatively small share of Africa’s total agricultural trade.
Data indicates faster growth in imports from the rest of the world than from intra-African sources. Hence, while there has been an absolute increase, market share has remained flat, suggesting that the continent has yet to capture a growing slice of the rapidly growing demand. This should be the ultimate focus of and measure of success for the AfCFTA.
The report also finds that Africa’s regional trade agreements (RTAs), which mostly focus on tariff reductions alone, have had a limited impact on stimulating the agrifood market.
The AfCFTA, for example, stipulates that countries must reduce tariffs on 90% of the intra-regional trade in goods within five years for non-Least Developed Countries (LDCs), and 10 years for LDCs. Notwithstanding this provision, the 2023 Africa Agriculture Trade Monitor (AATM) finds many agricultural products are currently excluded from these binding commitments, including live animals, meat, fish, milk, and dairy products, as well as vegetables, coffee, and tea.
This implies that the vast majority of agricultural products are not currently benefiting from tariff reductions, frustrating the AfCFTA’s efforts to boost continental agricultural trade and food security.
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More sophisticated trade policies are needed
The current global context underscores the strategic importance of tapping into rising demand across the continent and capitalising on cross-border trade to boost food supplies, raise agricultural incomes, and stabilise domestic markets. More sophisticated trade policies will be indispensable to leveraging agrifood trade as the lynchpin of Africa’s recovery, resilience, and growth. There will indeed be growing urgency for African governments to show greater ambition in AfCFTA implementation by progressing beyond tariff reduction alone across a narrow set of commodities and adopting more actionable, enforceable tools to meaningfully stimulate agricultural trade across the continent.
According to the AATM report, governments can expand agricultural trade by deepening trade agreements to help stimulate further agri-food trade within and beyond the continent. This can be achieved by incorporating actionable provisions, notably non-tariff measures (NTMs), which are more likely to enhance intra-African trade in agriculture and foster the creation of regional value chains.
Incorporating provisions on NTMs in the AfCFTA, including well-designed rules of origin, as well as sanitary and phytosanitary (SPS) measures, could potentially increase exports of agricultural products across the continent by up to 26%, driven by the likelihood of increased market confidence and subsequent raised demand.
The climate challenge to crops
Across the African continent, temperatures are rising significantly faster than the global average. The region is set to bear the brunt of climate change’s impact, which is emerging as the biggest threat to Africa’s agricultural trade development. Between 1991 to 2021, temperature rises reached 0.3°C per decade, with higher temperatures exposing Africa’s agricultural sector to greater risk of production loss, and consequently, undermining ongoing efforts to improve food security.
However, the research finds that agricultural trade policy can play an important role in addressing climate change through the inclusion of environmental provisions in RTAs. For instance, provisions on upholding environmental law, environmental cooperation, impact assessments and more, can help halt or reverse environmental degradation sometimes associated with trade.
The incorporation of environmental provisions into RTAs has increased substantially, particularly in the last few decades. Of the 775 RTAs established between 1947 and 2021, for instance, 671, or 87%, included at least one type of environmental provision as part of the agreement.
Many intra-African RTAs do include such environmental provisions – including the Common Market for Eastern and Southern Africa (COMESA), the Economic Community of West African States (ECOWAS), the East African Community (EAC), and the Central African Economic and Monetary Community (CEMAC). But in few cases are these ultimately legally enforceable.
Enforceable environmental measures
It should therefore be a priority for African governments to ensure not just the inclusion, but also the enforceability of environmental provisions, in order to help agricultural trade contribute to broader climate and environmental goals, while supporting economic growth and food security.
The adoption of the AfCFTA was a landmark moment for Africa and promises to help expedite economic growth and opportunities across the continent. Going forward, tangible enforceability, pace of implementation, and increased ambition should be critical areas of attention in order to fully reap the benefits of the AfCFTA.
Adopting more sophisticated non-tariff measures, coupled with environmental and climate provisions, will therefore not only help deepen agricultural trade, but will equally future-proof food security and growth in Africa.
The deployment of these measures will make Africa less vulnerable to major supply shocks and contribute to increasing production on the continent to reduce import dependency, while driving import diversification. Ultimately, by deepening agricultural trade, African countries can ensure that the continent can sustainably and resiliently feed itself amid recent and emerging global uncertainties.
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