The African Continental Free Trade Area (AfCFTA) aims to overcome the fragmented nature of current regional trade agreements in Africa to form the world’s largest free trade area by connecting almost 1.3B people across 54 African countries with a combined GDP valued at USD 3.4 trillion. Agriculture output would increase in 15 countries and 60% of African countries would see growth in the value of their agricultural output. Under AfCFTA agriculture would grow faster in all parts of Africa except for North Africa, which would shift toward manufacturing and services. Due to this shift in North Africa, agricultural output in Africa would contract by 0.5% (USD 8B) compared to the 2035 baseline.
African countries export the majority of their agricultural commodities off continent with the EU, US, UK, Russia, and China being popular destinations. African countries still have work to do to establish free trade agreements with their major trading partners especially China, Russia and the US. The webinar highlighted opportunities in several countries such as Nigerian cocoa exports to the Netherlands which is currently exported without a free trade agreement in place which subjects exports to unfavourable import tariffs.
The purpose of food safety regulations is to ensure that domestic and imported food products are safe, sanitary, nutritious, wholesome, and properly labelled. In all countries, food is governed by a complexity of laws and regulations which set out the government’s requirements to be met by food producers and food chain operators to ensure food safety and quality. Three large markets for African agricultural products are the EU, the US, and China. Food exports to the US are governed by regulations set out by the US Food and Drug Administration (FDA). Exports to the EU are regulated by the European Food Safety Authority (EFSA). China has enforced new rules on safety of imported and exported food from January 1, 2022. The new rules provide more details on the customs authority’s requirements on overseas food safety assessment and inspection, registration and filing of importers and exporters, product labelling, and food safety risk management.
Good agricultural practices with regards to soil and crop management can increase productivity and yield for a wide variety of crops on the African continent. During the soil preparation phase, checking and correcting soil pH for the intended crop is a vital first step. Access to high quality seeds or plant material can greatly increase the yield and ease management of the crop. The use of mineral fertilisers in combination with organic inputs can boost the growth and health of crops and further increase yield. Similarly, the appropriate use of agrochemicals can help combat pests and diseases, boost plant health and increase yield. Lastly, access to good farm and crop management practices and knowledge is vital to attaining high yielding crops.
Question 1: What Are the Main Challenges and Barriers Facing the Agricultural Trade Industry in Africa?
Charl: One barrier is the general lack of reefer equipment and containers and lack of space availability on reefer vessels. In South Africa for example, during peak citrus season container availability is an issue as well as the capacity at ports to receive and load the volume of fresh produce in a timely manner. South Africa also struggles with high winds which impact the ability of surface to ship cranes to operate which lead to port inefficiencies.
Mevis: Another major challenge is access to knowledge, resources and training especially for smallholder farmers which make up a substantial portion of African agriculture. It is a challenge to adopt good agricultural practices to gain access to resources that help farmers take advantage of beneficial trade agreements to get their products to lucrative export markets.
Question 2: What Are the Main Innovations and Solutions That Have Been Implemented to Address the Challenges?
Charl: It is very difficult to account for the weather, especially severe weather conditions. The best solution is to monitor the weather using technology and start negotiating with producers and exporters to plan container loads in between high gust days.
Mevis: Technological advancement across the continent especially in the logistics and freight industry as well as communication and trade facilitation. There has been significant investment in technology surrounding agriculture and lots of agriculture technology startups in recent years.
The Q&A session discusses the following questions:
The slides can be viewed here.