Africa: Harnessing AfCFTA in Repositioning Africa's Agricultural Sector

9 May 2024
The Accra Times (Accra)
opinion By Chiamaka Adinnu

The African Continental Free Trade Area (AfCFTA) represents a unique opportunity for African countries to leverage free trade and overcome the challenges hindering this sector's growth and development.

Africa's agricultural sector is characterized by both immense potential and significant challenges. Despite the abundant natural resources on the continent, this sector remains underdeveloped, with a high import dependency value of $75 billion for 100 million metric tons of cereals annually.

The continent has the highest prevalence of chronic hunger, with about 278 million citizens exposed to acute hunger. Africa's longstanding challenges, such as limited market access, fragmented value chains, inadequate infrastructure, and finance, are barriers to reaching its full potential in the global agricultural standing. The African Continental Free Trade Area (AfCFTA) represents a unique opportunity for African countries to leverage free trade and overcome the challenges hindering this sector's growth and development.

One of the key challenges facing Africa's agricultural sector is its fragmented value chain. The fragmented value chain results from the lack of coordination and integration among its agricultural actors, including the farmers, input suppliers, processors, distributors, and retailers. The fragmentation hinders the efficient flow of agricultural products from farm to market and undermines Africa's agricultural sustainability.

- Advertisement -The AfCFTA aims to create a single market for goods and services across Africa, thus reducing trade barriers and facilitating the free movement of goods across borders. African leaders can leverage the AfCFTA to enhance supply chain connectivity through policy coordination and effective implementation of harmonized regulations. Such policy coordination can only be facilitated with regular consultations and joint decision-making processes among African leaders.

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African farmers have limited access to regional markets to sell their produce. The restricted market access is primarily a result of the inadequacies of its transportation infrastructure. The AfCFTA can catalyze addressing Africa's infrastructure issues. The free trade agreement is a fertile ground for public-private partnerships to facilitate infrastructure development. Under this agreement, African member countries seeking to enhance trade and connectivity can work jointly to prioritize and invest in roads, railways, ports, and other transport networks.

42 out of 54 African countries are net food importers. Africa's dependence on food imports is due to the low investment in the agricultural sector. The limited investment minimizes agricultural innovation and restricts farmers' access to finance and inputs, resulting in low agricultural productivity. Such restricted access mainly affects smallholder farmers, who form the backbone of Africa's agricultural sector and account for the majority of the food production within the continent. Smallholder farmers cannot adopt modernized agricultural practices and tools for improved yield without credit access.

- Advertisement -The free trade agreement provides a unique opportunity for African governments to work with the private sector and mobilize resources for agricultural investment and innovation. The AfCFTA member states can establish specialized agricultural financing and credit facilities to provide smallholder farmers with credits and other necessary agricultural inputs. Leaders of African governments can also partner with agricultural extension service organizations and institutions to provide digital tools and training for farmers across the continents.

Africa's trading landscape is markedly challenging, with high tariffs and burdensome customs procedures. According to a 2023 report by the International Monetary Fund, import tariffs on intra-African trade are comparatively higher than in other regions, averaging about 6 percent. The challenging trading environment hinders intra-regional trade and confers excessive advantages to other regions, exacerbating the continent's trade imbalances.

African governments must prioritize the full implementation of the AfCFTA, which entails reductions in tariff and nontariff barriers among African countries. They should establish control measures, such as a committee, to monitor and enforce the tariff reduction commitments and ensure compliance with the trade agreement. The successful implementation, backed by improvements in the trading environment, can lead to a substantial boost in African export services.

Implementing the AfCFTA holds promise for addressing Africa's agricultural challenges but will require markedly coordinated efforts from member countries. With the right policies and measures, African countries can jointly harness the free trade agreement to reposition the continent's agricultural sector's global standing.

Chiamaka Adinnu is an Editorial Assistant at African Liberty pursuing a master's in Food Safety and Quality Engineering.

Read the original article on Accra Times.

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