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The AfCFTA impact on the growth of fresh produce intra-african trade

The recent International Fresh Produce Association (IFPA) Southern Africa Conference held from 17 to 18 August in Cape Town was an occasion to discuss the impact of the African Continental Free Trade Area (AfCFTA) on intra-african exports of fresh produce. Fresh produce represent one of the category of goods most traded between African States, accounting for more than 60 percent of the total trade in such goods (Ethiopia leading the rank). The remaining share of African production in such items is exported mainly to the EU (27%) and Asia (11%), as shown in the figure below.

The above figures, however, do not take into account informal cross-border trade of such products, which is difficult to quantify.

The panelists noted that the fresh produce intra-continental trade has the potential to increase significantly, on condition that the barriers such product currently encounter, both at tariff and non-tariff level, will be reduced. In fact, most of African countries currently find it easier to export fresh produce to other countries and customs territories outside the continent, rather than to other African States. This happens because in such markets they enjoy better entry access and lower barriers, often favoured by advantageous preferential trade agreements, like the Economic Partnership Agreements (EPAs) that the European Union has in place with some African countries or groups of countries.

Simultaneously, another trend can be observed: Africa still remains a net food importer, despite its vast agricultural potential and favourable climatic conditions that make it capable to meet internal consumption needs. Imports of fresh produce have grown significantly in the last decades, at a rate that is the fastest in world. However, this is also due to the constant and quick growth of its population, which translates into an increased demand of food by the various African States. Indeed, over the past decade, fresh vegetable imports into Africa rose by 16%, higher than the global average of 10%. Restrictive trade policies imposed by African countries have also contributed to such increase. For instance, the import bans of some types of vegetables introduced by Botswana and Namibia at the beginning of this year to protect their local producers, will most probably cause a reorientation of a part of fresh produce exports from their neighboring countries (like South Africa) to other destinations external to Africa, which will compel these countries to rely in future increasingly on imports of the same products from outside the continent.

The latest Africa agriculture trade monitor (2021), the annual report published by the International Food Policy Research Institute (IFPRI) seems to confirm these findings. Non-Tariff Barriers (NTBs) on fresh produce and food products in Africa are reported to be in general as very high. The report also notes that most of this trade mainly occurs within countries located within the same Regional Economic Communiy (REC), while exchanges between countries situated within different RECs are still poor.

The AfCFTA is able to change this scenario, as the dismantling of tariff barriers between African countries is expected to produce an increase in the demand on these products from States orbitating within free trade areas and customs unions different from those ones of which producing countries are members. If realised, this objective will reduce the African food dependance from extra-African countries or customs territories, with a positive impact on the continental trade balance.

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