Trade is an important avenue through which countries transform their economies and raise standards of living. For African countries, trade in agricultural products offers great potential to boost incomes for farmers, processors and other agricultural value chain actors.
- Leonard Mizzi, Head of Unit DEVCO C1- Rural Development, Food Security, Nutrition Chair
- Isolina Boto Manager, CTA Brussels Office
- Ousmane Badiane Director for Africa, IFPRI
“Increasing the ability of African countries to participate in regional and global trade helps to improve well-being of consumers, raise incomes of farmers, build resilience of food markets, and ultimately it also helps to boost economic growth and reduce poverty,”
“Increasing the ability of African countries to participate in regional and global trade helps to improve well-being of consumers, raise incomes of farmers, build resilience of food markets, and ultimately it also helps to boost economic growth and reduce poverty,” Ousmane Badiane, IFPRI Africa Director.
- It examines Africa’s recent performance in different markets and identifies changes in the composition and direction of trade.
- The Report is a collaboration between the International Food Policy Research Institute (IFPRI) and the Technical Centre for Agricultural and Rural Cooperation (CTA).
- It builds on the work of the Regional Strategic Analysis and Knowledge Support System (ReSAKSS) and the African Growth and Development Policy Modelling Consortium (AGRODEP) on trade, both facilitated by IFPRI under its work in support of the African Union Commission’s Comprehensive Africa Agriculture Development Programme.
- Despite recent growth in agricultural trade deficits, there are promising signs of export diversification, both in commodities traded and trade partners, as well as increasing intra-African trade in agricultural commodities.
- Intra-regional trade in Africa is increasing rapidly the report notes, by 12% a year between 1998 and 2013, but is still low compared with other regions such as Europe and Asia.
- There is a need for governments to act to raise productivity along the value chain, reduce trade costs, and eliminate barriers to trade in order to boost both global and intra-regional trade.
- Tthe European Union as the continent’s dominant trading partner, accounting for 40% of exports and 30% of imports, but Asia is catching up rapidly.
There are promising signs for export performance from many countries, with African exporters increasing their competitiveness in global markets for three-quarters of commodities studied.
Many new export commodities, such as wool, soybeans, soybean oil, live trees and plants, and cocoa preparations, showed strong gains in competitiveness, suggesting the potential for diversifying exports by expanding trade in these areas.
In nearly all West African countries national production was more volatile than regional production during the 1980–2010 period, implying that intra-regional trade would be able to reduce the volatility of food supplies at the regional level.
Increasing the volumes of intra-African trade in agricultural products has the potential to boost industrialization and enhance competitiveness.
Enabling policies that enhance intra-regional trade such as the Continental Free Trade Area (CFTA) will be crucial to open up the continent to new investors and better opportunities for its entrepreneurs.
Key factors limiting Africa’s trade in agricultural products include:
- the poor quality of physical infrastructure, inefficient customs processes and high harassment costs, inconsistent regional standards and regulations, and non-tariff trade barriers including stringent food safety and traceability requirements in importing countries.
- Support to domestic agricultural producers in OECD countries also reduces Africa’s trade.
- African countries have limited control over trade policy in other countries, the study notes, but they should continue to take part in global efforts to lower trade barriers.
- In addition, much can be accomplished by addressing the domestic constraints to expanding trade.
- allocating greater public expenditures to agriculture and to agricultural research and development in particular, harmonising regulations and decreasing barriers to intra-regional trade,
- and providing an enabling environment for value chain development by strengthening market institutions and investing in infrastructure. At the global level, efforts are needed to meet strict food safety and traceability requirements.