The AfCFTA offers particular potential for agricultural products. Since then, many Member States have also ratified the Agreement. The African Development Bank invites you to a virtual panel discussion themed Intra-Africa Trade in the Age of COVID-19 – Issues, Challenges and Way Forward as part of the wider Cultivate Africa dialogue.. Unfortunately, the African Continental Free Trade Agreement (ACFTA) did not kick off on 1 July as originally scheduled, due to the coronavirus crisis, but … Africa’s prospects for greater regional trade are also highlighted by its consumer market of nearly one billion people, the rising number of affluent consumers and the increasing mobility of investment capital,” the AEO says. Between 2018 and 2019, South Africa’s trade with the rest of Africa declined; the same holds true for South Africa’s world trade. The Action Plan for Boosting Intra-Africa Trade, as endorsed by the AU Summit, contains seven major clusters, the implementation of whose programmes and activities is aimed at addressing the key constraints and challenges of intra-African trade and at significantly enhancing the size and benefits of the trade for the attainment of sustainable economic growth and development. Nairobi, Kenya, 8 October 2019 – A senior Economic Commission for Africa (ECA) expert says boosting intra-Africa agricultural trade is crucial to spur economies on the continent and ensure there is food security across nations. Diversification should also lead to increased sophistication of export products. Most of Africa’s primary exports undergo little processing before they are re-exported, the report argues, citing  cocoa beans from Côte d’Ivoire and Ghana and crude oil and petroleum products from Nigeria as examples. What is less known about the AfCFTA is that its scope exceeds that of a traditional free trade area, which generally focus on trade in goods, to include trade in services, investment, intellectual property rights and competition policy, and possibly e-commerce. It also endorsed an Action Plan for Boosting Intra-Africa Trade (BIAT). As such, intra-Africa trade is just 15%. Against this backdrop, the AfCFTA is expected to enable countries to break into new African markets as they both diversify by export destination and type of goods produced. 2012. Alternatively, the share of intra-African trade would increase by nearly 40 percent to over 50 percent, depending on the ambition of the liberalization, between the start of the implementation of the reform (2020) and 2040.2. Increased investment in intra-African trade would produce a positive catalytic effect to Africa’s growth story. This will make Africa the largest free trade area in the world. “What You Export Matters.” Journal of Economic Growth12 (1): 1–25. While intra-Africa trade in agriculture has been growing over the years, the levels remain significantly below the potential. “Exports and Export Diversification in Sub-Saharan Africa: A Strategy for Post-Crisis Growth.” Brookings Institution. Intra-African trade? The AfCFTA has come into force on 30 May 2019. This 4-page infographic provides a visualisation of intra-Africa trade in 2017. The World Bank population-weighted Gini index shows that inequality rose steeply between 1988 and 1998 and declined only moderately by 2013. August 23, 2017. https://agra.org/doubling-productivity-and-incomes-of-smallholder-farmers-in-africa/. Other questions to be explored include: Analysis of sectoral quality shows that some richer and more open countries have well established manufacturing exports, such as South Africa and Morocco. Particular attention should be attached to trade facilitation and building productive capacities. Contrary to popular notion, the heterogeneity of national exports helps intra-African trade as the spread of products across the continent allows for more trade between regions with large food demands. Citing data produced by its economists and peer institutions, the report said trade among African countries expanded from 10% in 2000 to about 16% in 2014, reflecting the continent’s recent economic upturns. BIAT offers a framework for addressing key constraints to intra-Africa trade and diversification under seven clusters: trade policy, trade facilitation, productive capacity, traderelated infrastructure, trade finance, trade information, and factor market integration. Dec 11, 2020. These include meeting the needs of the new concept of regionalism which requires a broader approach to reducing administrative and transaction costs and overcoming market segmentation; which pose challenges that require scaling up infrastructure investment to improve connections between and within African countries. the indicative date of 2017. Moreover, detailed Intra and Extra African Union trade statistics are needed to evaluate the effectiveness of the measures taken by African leaders to boost Intra African trade, which have a high impact for the economic development of the continent. African countries have taken a major step in this direction with the establishment of the African Continental Free Trade Area (AfCFTA). Get the best of world News delivered to your inbox daily . Trade diversification of exports is important as it allows countries to build resilience to movements in demand, due to economic downturns in importing countries but also price dips. 2018. And yet, while trade might be the path to development, the statistics in Africa aren’t too impressive. Now that the vaccine is here… Dec 11, 2020. The African Continental Free Trade Area will lead to the creation of a single continental market of more than 1.3 billion people, with a combined annual output of $2.2 trillion. Between 1990 and 2014, as most fastgrowing countries in the world diversified their economies, most African countries instead relied on rents from extractive industries. This is not an opportunity to be missed and 2019 will be a defining year. Furthermore, although the AfCFTA can address many important demand-side constraints to trade, particularly those linked to market size, supply-side constraints must also be addressed. ECA’s modeling projects that by 2040, the AfCFTA will increase intra-African trade in agricultural products by between 20 and 30 percent, with the highest gains in sugar, vegetables, fruit, nuts, beverages, and dairy products.5 The agreement is expected to expand access to markets at the regional and international levels, thus generating state revenue, increasing farmer income, and expanding both farmer and country capacity to invest in modernizing the agricultural sector through processing and mechanization. Stress and mental health check for leaders . It was created by the African Continental Free Trade Agreement among 54 of the 55 African Union nations. It is projected, through the sole removal of tariffs on goods, to increase the value of intra-African trade by between 15 percent (or $50 billion) and 25 percent (or $70 billion), depending on liberalization efforts, in 2040, compared to a situation with no AfCFTA in place. We investigate both the aggregate and gender‐specific impacts. Botswana and South Africa export the most sophisticated goods while Rwanda and Uganda have made the greatest improvements over the past three decades. Intra-African trade is key to sustainable development – African Economic Outlook, Macro-economics Policy, Forecasting and Research, Independent Development Evaluation (IDEV). Currently, trade barriers mean that poor farmers in rural areas are denied access to markets in neighboring countries that would deliver higher returns. In part, this is a result of the European colonization across Africa in the 19 th and 20 th centuries. In 2021, IATF’s theme will focus on the newly-launched African Continental Free Trade Area (AfCFTA) - a single market for goods and services across 55 countries, aimed at boosting trade and investment. Last week, 44 African nations came together and signed the Continental Free Trade Agreement (CFTA). The share of intra-African exports as a percentage of total African exports has increased from about 10 percent in 1995 to around 17 percent in 2017, but it remains low compared to levels in Europe (69 percent), Asia (59 percent), and North America (31 percent). While intra-Africa trade in agriculture has been growing over the years, the levels remain significantly below the potential. This historic Summit Decision is aimed at deepening Africa’s market integration and using trade to serve more effectively as an instrument for the attainment of rapid and sustainable socio-economic development. If successfully implemented, the agreement will create a single African market of over a billion consumers with a total GDP of over $3 trillion. AfCFTA will be a game changer for stimulating intra-African trade. The implementation of the treaty was originally supposed to occur on July 1, 2020, but was postponed due to COVID-19 restrictions. In particular, Africans must be equipped with the skills needed to engage in skill-intensive manufacturing industries such as apparel and machinery. Although global poverty has fallen, prosperity has not been fully shared. The AfCFTA as a result should stimulate demand for intra-African food imports, supporting a predominantly women-led sector. United Nations Economic Commission for Africa. Analysis by the African Export-Import Bank (Afreximbank) shows that one of the reasons why intra-African trade is at 16% of total African trade, on average, is the lack of access to trade … According to the African Development Bank (ADB), intra- Africa exports amount to only 16.6% of total trade. This apprehension is not without cause. The African Development Bank invites you to a virtual panel discussion themed Intra-Africa Trade in the Age of COVID-19 – Issues, Challenges and Way Forward as part of the wider Cultivate Africa dialogue. The AfCFTA will make vast improvements in catching intra-African trade up with the numbers of the rest of the world. In these countries, knowledge transfers to other export sectors can unlock the potential of established or emerging industries. Trade facilitation is key to reducing non-tariff trade costs, and is important for ensuring inclusive benefits since landlocked countries and small, informal, and female traders are usually more burdened by inadequate trade facilitation. trade flows in Africa becomes significantly important due to the very low levels of intra-African trade. https://doi.org/10.1007/s10887-006-9009-4. Dec 11, 2020. However, to achieve this, the AfCFTA will require flanking policies and a strong focus on achieving tangible outcomes from its sister initiative, the Boosting Intra-African Trade (BIAT) Action Plan. “Doubling Productivity and Incomes of Smallholder Farmers in Africa.” AGRA: Growing Africa’s Agriculture. The AfCFTA is complemented by other continental initiatives, including the Protocol on Free Movement of Persons, Right to Residence and Right to Establishment, and the Single African Air Transport Market (SAATM). United Nations Economic Commission for Africa. The Africa Nexus: Intra-Trade and Investment as drivers of African Development. Songwe, Vera, and Deborah Winkler. In the case of commodity exporting countries it supports a shift from an over dependence on commodities to higher-value added products and services.3 Economic diversification allows for more inclusion of small and mediumsized enterprises and helps encourage innovation as more markets open. While intra-Africa trade in agriculture has been growing over the years, the levels remain significantly below the potential. 2018. Widely spoken about in intra-African trade conversations are the challenges that women traders face. In 2015, African countries spent about $63 billion on food imports,4 largely from outside the continent. Additionally, building productive capacities through re-skilling programs will be crucial to ensuring that displaced workers and vulnerable persons are able to participate in welfare-enhancing African countries must develop effective policies and strategies for exports, and identify new opportunities for diversification, industrialization, and value chain development. On the other hand, over 60% of total African trade is with countries that are oceans away from the continent. Figure 6.1 shows that, except for Rwanda, Senegal, and Sudan, African economies did not diversify their exports. While today African countries are now independent, the colonial legacy lingers in the transport infrastructure. The AfCFTA will improve export sophistication across the continent by enabling more countries to integrate regional and global value chains and consequently increase the quality of exports. 10 Sep 2020. The question, therefore, becomes whether the pandemic could be used as an opportunity to expand intra-African trade in agriculture and create as well as expand regional supply chains. In March 2018, African countries signed a landmark trade agreement, the African Continental Free Trade Area Agreement (AfCFTA), which commits countries to remove tariffs on 90 percent of goods, progressively liberalize trade in services, and address a host of other non-tariff barrier. To the best of our knowledge there are no studies exploring the intra‐African trade–youth unemployment nexus in Africa. Although trade within the continent remains low and has not changed significantly over time, the 2016-2017 period saw an 8% increase in intra-Africa exports, with intra-Africa exports reaching 16% of Africa’s world exports in 2017. Dec 11, 2020. Women constitute 70 per cent of Africa’s informal cross-border traders, and according to a 2019 study by UN Women titled Opportunities for Women Entrepreneurs in the Context of the AfCFTA , African women traders often confront corruption, insecurity and sexual harassment. This means that of all total trade on the African continent, only 15% is between African countries. In contrast, most East Asian economies were able to diversify exports at a rapid pace and converge to the levels of China and Korea (Figure 6.2). Key driver of growth in Africa the Continental Free trade Area ( AfCFTA ) is a Free trade in. 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