Photo: © FAO

28 June 2019, Accra – Despite Africa’s vast agricultural potential, the continent has remained a net importer of agricultural products in the last three decades.

Today, many African countries import basic foodstuffs such as dairy products, edible oils and fats, meat and meat products, sugars, and cereals especially wheat and rice to meet the consumption needs of their nationals.

”This situation essentially is of enormous concern particularly for a continent endowed with vast unexploited arable land,” said Jean Senahoun, FAO Senior Economist at the Regional Office for Africa.

He noted that although, the importation of food increasingly plays an important role in ensuring food security on the continent, the over reliance must be addressed to ensure that the continent is left with adequate revenue for other capital investments.

The 2018 edition of the FAO Africa Regional Overview of Food and Nutrition Security reports that Africa had a balanced agricultural trade when both exports and imports were at about USD 14 billion in 1980s, but by 2010, its agricultural imports exceeded exports by about USD 20 billion.

The report further stressed, ’’today, Africa’s food and agricultural import bill averages USD 72 billion per year growing annually at 3.6%.’’

The recently established African Continental Free Trade Area (AfCFTA), a flagship programme of the African Union, is seen as move to significantly accelerate growth and sustainable development through a doubling of overall intra-African trade by 2022, and triple trade in agricultural goods by 2023.

According to Senahoun, the signing of the AfCFTA by 44 African countries is an important milestone.  “This AfCFTA is expected to soon come into force after 22 countries have ratified the agreement and will ultimately create a single market of up to 1.2 billion people, which will generate substantial economic gains.”

FAO’s Commitment to boost Intra-African trade

As a demonstration of FAO’s commitment to intra-regional trade, the organization and African Union Commission (AUC) recently launched a Technical Cooperation Project (TCP), “Support for Boosting Intra-African Trade in Agricultural Commodities to Advance Implementation of the African Continental Free Trade Area Agreement’”. The agreement is in line with FAO’s vision of playing the lead role towards achieving the Sustainable Development Goals (SDGs) on the continent.

The commitment includes harnessing market and trade opportunities at local, regional, and international levels by creating and enhancing policies, institutional frameworks and support systems to triple the volume of intra-African trade in agricultural commodities and services by 2025.

FAO has over the years partnered with the AUC, especially through the Department of Rural Economy and Agriculture (DREA) in promoting inclusive and efficient agricultural systems.  The partnership aims at meeting

the Malabo Commitment of accelerated agricultural growth and transformation for shared prosperity and improved livelihoods.

Prevailing Situation and Trends in Intra-African Trade

Most of Africa’s trade is with countries outside the region. Overall, intra-African trade (or trade amongst African countries) is about 10 to 20 percent of the total and this figure has grown only slowly over time, the report said.

At sub-regional level, intra-regional trade is about 5 percent for Common Market for Eastern and Southern Africa (COMESA), 10 percent for the Economic Community of West African States (ECOWAS) and Southern African Development Community (SADC), and less than 2 percent for Central Africa.

At the continental level, South Africa, Nigeria and Côte d’Ivoire account for 20, 10, and 7 percent, respectively, of total intraregional trade. These countries play a particularly important role in intra-regional trade. For example, in the Community of Sahel-Saharan States (CEN-SAD), 28 percent of imports come from Nigeria and another 22 percent from Côte d’Ivoire. 

Trade and Food Security

The African regional overview report stressed that trade affects each of the dimensions of food security through its impact on incomes, prices and inequality, stability of supply, linking food-deficit areas with food-surplus areas, as well as food safety, variety and quality of food products, all of which help determine the food security and nutrition of individuals.

Economic growth has been essential for driving down poverty rates, and although it is difficult to establish a clear link between trade and income growth, many agree that economies that are more open tend to grow faster. Strong economic growth helped reduce the global poverty rate from 46 to 27 percent between 1990 and 2005.

The income and poverty effects of agricultural productivity growth are strongest in countries where agriculture is a large part of the economy and employs a large share of the labour force. Growth in agriculture is estimated to reduce poverty more than three times faster than growth in non-agricultural sectors.