As assessment of Africa’s trade performance in world markets
Following on from the first Africa Agriculture Trade Monitor (AATM) released in 2018, the 2019 report is the second flagship document to assess the emerging and long-term trends and drivers behind Africa’s regional and global trade in agricultural products.
A joint initiative of the International Food Policy Research Institute (IFPRI) and CTA, the 2019 AATM aims to examine two key points: 1) the effectiveness of regional trade initiatives in boosting economic integration and intra-African trade; and 2) the potential impact of broader integration on the continent’s trade performance in the context of emerging protectionism. The publication is thus timely, following both the recent launch of the African Continental Free Trade Area (AfCFTA) initiative in May 2019, which is expected to increase intra-African trade by 52% by 2022, and in light of the rising protectionist tensions between China and the US.
“The report makes clear that the AfCFTA is central to addressing many of the policy challenges associated with economic integration and agricultural trade that African countries face today,” says Ousmane Badiane, IFPRI’s director for Africa. “By reducing all trading costs, AfCFTA has the potential to spur growth through intraregional trade expansion, thus improving food security, diversifying the production base, and helping African producers to move up value chains,” he continues.
While the AfCFTA is seen as a ‘game changer’ that will deliver deeper regional integration and spur economic growth through the elimination of tariff and non-tariff barriers on most goods, among other developments, the report warns that Africa stands to lose out if the current protectionism policies and other trade barriers become more widespread globally. On the other hand, according to the authors of Chapter 5, the China-US trade war could work in Africa’s favour if the continent can take advantage of the changing patterns in global agricultural markets, and tensions remain confined to China and the US.
With regards to getting insight into Africa’s agricultural trade, access to – and the quality of – international statistics from this sector is reportedly limited. To address this problem and provide policymakers and development practitioners with an accurate estimate of trade in Africa, and worldwide, the publication’s authors created an analytical database based on the United Nations Commodity Trade Statistics Database. The data provides information on bilateral trade for 195 countries or groups of countries from 2005 to 2017.
Overall, while intraregional trade is still low compared to other regions of the world, according to the AATM findings, Africa has great potential to expand, especially with investments in trade-related infrastructure and improvements in policy. And, while growth in Africa’s agricultural imports has continued to outpace export growth, the agricultural trade deficit has been on the decline since 2012. The report highlights how the AfCFTA has the potential to accelerate regional and continental trade integration and foster industrialisation, thus improving food security, diversifying the production base and helping African producers move up the value chains.
Africa Agricultural Trade Monitor 2019
By A Bouët & SP Odjo
ReSAKSS, 2019; 189 pp.
In this issue
Edward Mabaya, manager of agribusiness development at the African Development Bank, explores what is needed to scale digital projects in Africa’s food market to achieve development on the continent.
by Sophie Reeve
Smallholders in Kenya are receiving training in good soil practices and the application of 100% organic inputs to scale up soil restoration and reduce plant stress under changing climatic conditions.
by Olivia Frost
Climate change is a global crisis; millions of people are already suffering and the impacts are getting worse. Policies to mitigate and adapt to climate change are increasing but many argue that the window for action is closing and decision-makers need to do more, with greater urgency.
by Sophie Reeve
New policies, free trade areas and digital projects are changing Africa’s regional food trade and opening up market linkages for actors of the agricultural value chain across the continent.
A Nigerian start-up is using artificial intelligence (AI) to guarantee markets for smallholder farmers and improve procurement efficiencies for large buyers.
Smallholder farmers in Africa continue to face numerous hurdles accessing credit or loans to increase their production. Amongst other factors, partnerships are key to addressing this, but governments need to take the lead, state experts from the sector.
Sesi Technologies is working to tackle poverty and hunger by providing African farmers with affordable technology to help them increase productivity and reduce losses. Co-founder, Isaac Sesi, speaks about his passion for technology and the importance of encouraging more women and young people into the sector.
Malawian agriprenuer, Ngabaghila Chatata, is co-founder and managing director of Thanthwe Farms, an innovative agribusiness, which aims to be a leading producer of high-value horticultural produce in Malawi and across Africa.
Manka Angwafo, founder and managing director of grain handling company, Grassland, outlines the challenges of taking a business to scale, particularly for women, and offers advice to other women entrepreneurs about scaling up.
Diariétou Gaye, World Bank Director of Strategy and Operations for the Africa Region, looks at the findings of the report ‘Profiting from Parity’ on the potential of women entrepreneurship for the continent.