FAO, AU champion expansion of Africa’s intra-agricultural trade in new AfCFTA framework

AFRICA – The African agricultural and food market is expanding quickly as indicated by World Bank projections that show that the value of the industry is expected to more than triple to reach USD 1 trillion by 2030, compared to 2010.

This according to FAO provides an opportunity to not only boost trade in food and non-food agricultural commodities and services within the continent but also enhance food security in Africa.

So far regional integration is gaining momentum as evidenced by progress in the creation of customs unions and the initial steps in setting up a common external tariff at the regional level in a number of regional economic communities (RECs) such as the East African Community (EAC) and the Economic Community of West African States (ECOWAS).

However, Africa is a net food-importing region of commodities such as cereals, meat, dairy products, fats, oils and sugar, importing about US$ 80 billion worth of agricultural and food products annually.

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A small share of Africa’s total agricultural trade is with other African countries and is estimated to be less than 20 percent.

While Africa continues to remain a marginal player in the global scene, accounting for only 2.7 percent of world trade in goods and 5 percent of world agricultural trade.

The establishment of the African Continental Free Trade Area (AfCFTA) further reinforces the gains achieved in regional integration and opens new market opportunities for farmers and other economic operators.

To this end 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 AfCFTA agreement.

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.

“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.”

FAO Assistant Director-General and Regional Representative for Africa Abebe Haile-Gabriel, African Union Commissioner Josefa Sacko, and AfCFTA Secretary-General Wamkele Mene

Focus of the blueprint guide

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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.

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.

A key priority on the framework 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

“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,” 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.

The Framework is also aimed to help policy-makers and the private sector to develop strategies, policies and programmes to promote intra-African agricultural trade.

In addition it guides on 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.

African countries have undertaken commitments to remove tariffs on 90 percent of over 5,000 tariff lines and to liberalize services.

It is estimated that tariff liberalization in the transition phase could generate welfare gains of up to US$ 16.1 billion, and growth in intra-African total merchandise trade of 33 percent, up from 15 percent.

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