Experts at the 47th Brussels Development Briefing on the topic of “Regional Trade in Africa: Drivers, Trends and Opportunities” all agreed that Africa’s largest market opportunity lies within the continent. The event, which was held at the ACP Secretariat on Friday 3 February 2017 attracted an audience of close to 200 people, who joined the organisers to discuss the progress made in integrating Africa’s regional markets, and to explore suggestions for overcoming barriers to intra-African trade. Key findings from the African Agricultural Trade Status Report (AAFTR) 2017 by CTA and IFPRI were also presented at the Briefing. The event was co-organised by CTA, the International Food Policy Research Institute (IFPRI), the European Commission / DEVCO, the ACP Secretariat, and CONCORD.
“When you come to look at intra-African trade, you can see the contrast between raw products exports to the rest of the world, and greater value added exports within Africa” said keynote speaker Dr. Mukhisa Kituyi, Secretary-General of UNCTAD, who weighed in on some of the most topical issues that are facing the continent’s trade landscape. Given the uncertain economic climate of Africa’s major international export destinations, Dr Kituyi was keen to emphasise the resilience that African economies can develop through enhanced intra and inter-regional trade.
The potential of intra-African trade to deliver greater value addition and productivity for the agricultural sector was repeated by a number of the distinguished panellists. However, in order for this to be realised, the scale, diversity and fluidity of cross-border transactions has to be significantly augmented.
In his presentation on trends in Africa’s regional trade, Dr Ousmane Badiane, Director for Africa at IFPRI noted that in terms of agricultural products, although African countries are the destination of only 20% of African exports, there has been a notable increase in the competitiveness of its regional markets, which augurs well for domestic agribusiness. This is on top of the opportunities arising from changes in demand and consumption due to the demographic transitions Africa faces. For example, the most rapid growth in intra-regional agricultural trade West Africa has been higher-value goods such as fish and animal products as well as vegetables and food oils.
Various recommendations on easing cross border trade were shared by the panellists, including Dr Badiane who argued that removal of “harassment costs” would have the biggest effect on intra-regional trade. This was echoed by Annette Mutaawe who demonstrated a number of initiatives supported by TradeMark East Africa to achieve just that. These include technology innovations, such as a mobile phone platform which allows women small scale producers to access available trucks to take their goods to market. This comes in addition to support for East African government agencies dealing with customs and transportation in order to streamline procedures, reduce costs and delays in moving goods across borders.
“Agriculture produce is perishable – if you’re not able to take it through the borders quickly, that’s a huge problem. We found that there is a huge opportunity for women entrepreneurs to do business”.
Annette Mutaawe, TradeMark East Africa
Access to finance remains a predominant concern for Africa’s farmers, agribusinesses and small and medium enterprises, as well as for governments to fund large infrastructure-related projects that could ease the costs of trade between countries. It is in this context that Ishmael Sunga, CEO of the Southern African Confederation of Agricultural Unions (SACAU) and Nana Osei-Bonsu CEO of Ghana’s the Private Enterprise Federation (PEF) gave examples of successful PPPs – both public-private partnerships and private-private partnerships – as a way for producers to strengthen their presence in the marketplace and their negotiating power vis-à-vis other players in the value chain, notably banks and offtakers. The African Development Bank’s Josephine Mwangi spoke to the need to reduce the risk in agricultural investment, an area that the bank is already working on through its FEED Africa initiative and mobilisation of funding to finance Africa’s agricultural transformation.
Greater intra-African agricultural trade will depend not only on the actions of businesses and governments, but also on regional and partner institutions who can provide catalytic action on a wider scale. At the regional level, organisations such as Alliance for Commodity Trade in Eastern and Southern Africa (ACTESA), which is part of the COMESA regional block, have created an enabling environment through partnerships and investments that promotes intra-regional trade in fertilisers and other inputs.
The European Commission used the Briefing as an opportunity to make a strong presentation of its support for regional trade in Africa. According to Sandra Gallina, Director for Sustainable Development at DG Trade, in terms of the Economic Partnership Agreements (EPA) “there are gains that can be made within EPA regions, as well as between EPA groupings through the opportunity to cumulate… this regional preference is what we see in the intra-regional EPA game as massively important.” This spoke directly to concerns about the implications of the EPAs for regional integration in the ACP, particularly for Africa. In his closing remarks, Roberto Ridolfi, Director for Sustainable Growth and Development at DG EuropeAid, presented ongoing and future engagements by the European Commission to support electrification and agribusiness financing for Africa (ElectriFI and AgriFI respectively). Both these instruments aim to reduce the risk of investing into these two priority areas for Africa’s regional development, and make it easier to leverage funds from both private and public sources. Ridolfi further stressed that aid instruments must be used to leverage private finance in order to scale up successful businesses, and agreed on the need to develop an online platform which consolidates all the information on the various EC programmes supporting trade.
CTA’s director, Michael Hailu, also expressed a wish to see regional trade in Africa leading to the creation of more jobs and opportunities in rural areas, and for increased private sector involvement. In terms of future activities, CTA will be engaging with DG Devco in a preparatory exercise in April or May, which will feed into the EU-Africa Business Forum that takes place during the European Development Days 2017 (June in Brussels). A declaration by business leaders and CEOs will be presented to the EU-African Union Summit, which is scheduled to take place in Abidjan in November 2017.
Find out more
- Explore the Brussels Development Briefing 47 and sign up to receive emails on future events
- Learn more about regional trade in ACP countries in the Spore magazine
- Read the Executive Summary to the African Agricultural Trade Status Report 2017