Africa’s move to promote trade as a stimulus for the continent’s socio-economic recovery from the Covid-19 crisis has a potential boost.
The African Union Commission and the Food and Agriculture Organisation (FAO) have produced a guide to help countries enter the continent’s new single market.
The guide, Framework for Boosting Intra-African Trade (BIAT) in Agricultural Commodities and Services, is in consonance with the objective of the African Continental Free Trade Area (AfCFTA).
AfCFTA, which commenced trading on 01 January, 2021, is the world’s largest free-trade area, creating a market of 1.2 billion people and the eighth economic bloc in the world.
It is understood that as Africa trades more with itself, it will be essential to target critical hurdles faced in exporting within the continent such as SME export competitiveness, rules of origin, and technical and product safety standards.
Africa is a net food-importing continent of commodities such as cereals, meat, dairy products, fats, oils and sugar. The continent imports about $80 billion worth of agricultural and food products annually.
A small share of Africa’s total agricultural trade is understood to be with other African countries, and intra-African agricultural trade is estimated to be less than 20 percent.
This guide, according to the organisations, aims to unlock the potential of the agricultural sector to contribute to sustainable and inclusive growth for the continent.
FAO and the AU Commission also noted that 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.
‘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’, the organisations jointly stated in the publication’s foreword.
‘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’.
African countries have undertaken commitments to remove tariffs on 90 percent 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 $16.1 billion, and growth in intra-African total merchandise trade of 33 percent, up from 15 percent.
Recently, AfCFTA and the United Nations Development Programme (UNDP) signed a strategic partnership to promote trade.
The partnership, according to the development partners, will be a driver for sustainable development, particularly for women and youths in Africa, and it will be in line with the sustainable development goals (SDGs) and Agenda 2063 common vision for the continent.
Photo source: Meaduva