Boosting intra-African trade will power post-COVID-19 recovery and foster food security – says Aissatou Diallo

Aissatou Diallo: Sierra Leone Telegraph: 03 September 2022:

The COVID-19 pandemic is disrupting Africa’s development trajectory. It is exacting a substantial socio-economic toll and putting the survival of half of the continent’s micro, small and medium-sized enterprises (MSMEs) at risk. Four in five African businesses are witnessing a dramatic reduction in sales.

As African countries restart their economies and phase out COVID-19 restrictions, the ripple effects of the Ukraine crisis increase daily. The effects are particularly acute in terms of food security, given the continent’s reliance on food imports from the region of conflict.

In addition, the rising cost of fertilizers and the impact of climate change are exacerbating food shortages.

These shocks have slowed progress towards achieving SDG2, which is zero hunger by 2030.

A 2021 joint publication by FAO, the United Nations Economic Commission for Africa (UNECA), and the African Union titled Africa: Regional Overview of Food Security and Nutrition indicated that over one-fifth of the continent’s population faced hunger in 2020. That is about 281.6 million people—46.3 million more than the figure for 2019.

Due to current harsh economic realities in countries, the International Monetary Fund is encouraging governments worldwide to subsidize the cost of food and energy for their poor. Such a social intervention presents a huge fiscal challenge for many African countries.

What then is the solution?

An effective solution is to boost intra-African trade, which has the potential to pave the way to food security.

Africa has enough food to ensure its citizens do not face hunger; however, the challenge is how to ensure that trade contributes significantly to food security.

According to the UNECA, the AfCFTA is expected to boost intra-African trade in goods and services by up to 25 per cent by 2040, in part through increased activities of MSMEs, help from business-support organisations and sturdy policy frameworks.

To ensure food availability and tackle price volatility, a need exists to connect agricultural markets, maintain producer incentives in surplus zones and boost cross-border trade.

African countries must welcome the opportunity to strengthen intra-regional trade and firm up measures for a seamless exchange of goods and services and for food sufficiency. To help achieve these goals, the International Trade Centre (ITC) launched the One Trade Africa (OTA) in 2020.

One Trade Africa

The OTA is a five-year programme designed to help African MSMEs leverage market opportunities generated by the African Continental Free Trade Area (AfCFTA).

According to the UNECA, the AfCFTA is expected to boost intra-African trade in goods and services by up to 25 per cent by 2040, in part through increased activities of MSMEs, help from business-support organisations and sturdy policy frameworks.

The trade pact eliminates at least 90 per cent of tariff lines on goods produced within Africa over the next 5 to 15 years. That will be a boon for businesses, including those engaged in intra-African agricultural trade.

Currently, the average tariff on agricultural products traded between African countries is 17.1 per cent, whereas exports to Organisation for Economic Co-operation and Development (OECD) countries are at 15 per cent.

With the AfCFTA, intra-African exports in agriculture and food products are projected to increase between 20 and 35 per cent by 2040.

At its core, the OTA promotes policies that facilitate trade and boost the competitiveness of MSMEs through enhanced digitization. And a focus on the cross-cutting dimensions of green and sustainable trade as well as gender and youth is the right approach. We must help women and youth take advantage of available regional and global trade opportunities.

The OTA is supporting MSMEs in many ways. For example, in partnership with the Africa Export and Import Bank (Afreximbank), a “How to Export” training programme is being implemented. The programme was piloted in Côte d’Ivoire, Nigeria and Rwanda, and has since benefited more than 5,000 MSME operators in at least 30 countries. Beneficiaries have access to an OTA online resource centre on the AfCFTA.

To expand its reach to all 55 countries in Africa, the online training, initially conducted in English and French, is being expanded to include Arabic and Portuguese.

In addition, the OTA partnered with the UNECA to design many national and regional AfCFTA strategies, while the design of an AfCFTA Youth in Business Platform is in the pipeline.

By facilitating about 100 business connections—and counting—the OTA is bringing entrepreneurs to engage and discuss business partnerships, opportunities and best practices. At the 2021 Intra-African Trade Fair in Durban, South Africa, for example, the OTA sponsored the participation of entrepreneurs from Sierra Leone, Senegal, and Guinea.

In the future, the OTA will laser-focus on helping the African private sector thrive in a post-COVID-19 world. That is a recognition of the unique role of African businesses in powering economies.

And we must remember that a fully and effectively implemented AfCFTA is a safe investment in Africa’s future.

About the author

Ms. Diallo is ITC Senior Coordinator for AfCFTA, LDCs.

Africa Renewal

1 Comment

  1. Ms Aissatou Daillo’s article have highlighted all the sico/economic opportunities that exist in the African continent , and some of the challenges facing the continent that took a direct hit from the effects of the COVID19 pandemic , the War in Ukraine and the environmental impact of of Greeenhouse gases, in the continent that have left many millions dead and destitute especially in the Horn of Africa , the Shahel and Southern African countries like Zimbabew and the Rifth Valley of Kenya. The dominoes effect can be seen in the wars in the Sahel , the on going war in Tigray, Ethopia , the DRC , and the CAR .And is all tied to the biggest elephant in the room she left out :Corruption and lack of transparency and accountability from our corrupt African leaders and the respect of the rule of law and Free speech .We can all see and point to the shining city patched on top of the hill , but how we get there is a whole different kettle of fish .Thanks to our corrupt African leaders .Seems to me our continent and it’s people are forever condemned to suffer despite having all the natural resources under the sun .The article also highlighted some of the difficulties that African countries face in promoting intra-African trade , and the hoops and huddles placed on the path of African investors wanting to invest in neighboring countries ,but found themselves frozen out in the cold and can’t compete in a well established and sometimes rigid international markets because of the extortion tarrifs and trade barriers erected against African products as well as goods and services .The worst enemies of Africa are Africans themselves .Foreign entities makes more commercial headways in Africa than the indigenous peoples .The whole African economic system is set up to fail to benefit outsiders . And they always have the African Bigmen ,or the useful idiots that look after their backs .In 2012 the World Bank put out a report that ” highlights the opportunities for African countries to trade in goods , services and investment with itself .Fragmentation with Africa’s borders is bad for efficiency and equity.The report notes that barriers to regional trade fall most heavily and disproportionately on the poor and women .It calls for effective regional integration is more than simply removing tarrifs , it is about addressing in -the ground constraints that paralyze the daily operations of ordinary producers and traders .”
    “Simultaneous action is required at both the supra-National and international level .Bringing together regulation to define harmonized or to agree to mutral recognition of qualifications of professions .” We just have to imagine the benefits of allowing African doctors, nurses , teachers , engineers and lawyers , practice anywhere in the continent , regardless of the African country they come from .But the responsibility for implementation lies with each county .” or better still if Nigerian Famers can export their rice to Sierra Leone .No Chines rice is better .What a load of hogwash .

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