The Food and Agriculture Organization (FAO) and the African Union (AU) have launched a guide to boost intra-African agricultural trade under the new AfCFTA agreement. The Framework for Boosting Intra-African Trade in Agricultural Commodities and Services is a blueprint for expanding agricultural trade between African countries. It aims to unlock the potential of the agricultural sector to contribute to sustainable and inclusive growth for Africa.
Meanwhile, the AfCFTA began trading on January 1, 2021. It 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.
As such, the FAO indicated that the increased trade represents a paradigm shift away from business as usual. Adding that it is an important part of the collaborative work towards boosting food security and nutrition for all Africans.
The publication is titled “the Framework provides a timely catalyst for the transformation to more efficient, inclusive, resilient, and sustainable agri-food systems”. The joint authors noted that the framework will promote sustainable development and prosperity in Africa.
Annual Agriculture imports
Also, the FAO noted that the pursuit of industrial transformation policies and programs remains a key priority. This is because it will support the private sector to add value to African exports. The authors noted that value addition will help “compete with imports from outside Africa and expand opportunities for job creation”.
Moreover, the FAO noted that Africa is a net food importer of commodities such as cereals, meat, dairy products, fats, oils, and sugar. The continent imports 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. The FAO stated that intra-African agricultural trade is estimated to be less than 20 percent.
Meanwhile, he World Bank indicated that African agricultural and food market is expanding quickly. As such, the Bank’s projections show that the value of Africa’s agriculture and agribusiness industry will reach USD 1 trillion by 2030.
Turning commitments into actions
The Framework will help policy-makers and the private sector to develop strategies, policies, and programs to promote intra-African agricultural trade. It will also aid the development of agricultural value chains. The FAO noted that, this will help stakeholders, such as farmers, small and medium agri-businesses, women, and youth, can reap the benefits of the AfCFTA single market.
Moreover, action areas include trade policy, trade facilitation, productive capacity, trade-related infrastructure, trade finance, and factor market integration. Other areas include cross-cutting issues such as 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. According to the FAO, “it is estimated that tariff liberalization in the transition phase could generate welfare gains of up to USD 16.1 billion”. Also, the AfCFTA will translate into the growth in intra-African total merchandise trade of 33 percent, up from 15 percent.
The AfCFTA comes after African Heads of State and Government committed in 2014 to triple intra-African trade in agricultural commodities and services by the year 2025. This was part of the Malabo Declaration.
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