FAO, AU Launch Initiative to Boost Intra-African Trade

Oluchi Chibuzor

The Food and Agriculture Organisation of the United Nations (FAO) and the African Union Commission’s Department of Agriculture, Rural Development, Blue Economy and Sustainable Development (AUC-DARBE) have launched a guide towards boosting intra-African agricultural trade under the new African Continental Free Trade Area (AfCFTA) agreement.

This is coming on the expectation that increased agricultural trade between African countries could drive sustainable development and play a pivotal role in the transformation of its food systems.

The AfCFTA which began trading on January 1, 2021, is the largest free trade area in the world in terms of the number of countries covered, as it represents a market of 1.2 billion consumers.

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.

In a joint statement from FAO’s Assistant Director-General and Regional Representative for Africa, Abebe Haile-Gabriel; African Union Commissioner Josefa Sacko, and AfCFTA Secretary-General Wamkele Mene, 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.

“A key priority 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,” it added.

According to the statement, 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.

Africa is a net food-importing region of commodities such as cereals, meat, dairy products, fats, oils and sugar, importing about USD 80 billion worth of agricultural and food products annually. A small share of Africa’s total agricultural trade is with other African countries. Intra-African agricultural trade is estimated to be less than 20 percent.

The Framework will help policy-makers and the private sector develop strategies, policies and programmes to promote intra-African agricultural trade and 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 per cent of over 5,000 tariff lines and to liberalise services. It is estimated that tariff liberalisation in the transition phase could generate welfare gains of up to USD 16.1 billion, and growth in intra-African total merchandise trade of 33 percent, up from 15 percent.