The African Continental Free Trade Area (AfCFTA), due to launch in January 2021, is likely to be a watershed for African regional and international agri-food trade, a new report has found.
The AfCFTA will be one of the largest free trade areas in the world since the establishment of the World Trade Organization (WTO), covering a market of more than 1.2 billion people and up to US$3 trillion in combined GDP. The agreement also creates the opportunity to increase intra-African trade by more than 50 per cent, adding an estimated US$76 billion in income to the rest of the world.
“Lagging far behind other major regions of the world like the EU in terms of trade between individual countries, the African Union and its member states have made a commitment to foster the links between domestic markets across the continent” said Ousmane Badiane, co-chair of the Malabo Montpellier Panel, which authored the report.
“This new trade deal comes at an opportune time for the continent to support fast-transforming economies and meet a surging domestic demand fueled by a rapidly growing population and urban middle class.”
The trade area comes into force as the Africa population continues to grow, rising from 1.2 billion people to an estimated 2.2 billion by 2050, creating exponential demand. Yet the continent already relies on food and agricultural imports worth approximately US$72 billion per year, growing by 3.6 percent each year of late.
And in the midst of the COVID-19 pandemic, estimates show that Africa’s trade volumes are projected to decrease by eight per cent for exports and about 16 per cent for imports during 2020.
Agricultural experts at the Malabo Montpellier Panel analyzed the potential opportunities for African national governments and its eight regional economic communities to trade more effectively in this new paradigm, including ways to leverage informal cross-border trade. Informal trade accounts for 30 to 40 per cent of total trade within the Southern African Development Community (SADC), and as much as 86 per cent of Uganda’s official exports.
The Panel’s recommendations include improving information and data on crossborder trade, particularly on informal cross-border trade, for instance data on its scale, quality of products, and patterns of trade flows. This would support simplifying regulations, providing training on food hygiene, enhancing access to finance, and addressing entrepreneurship skills.
“Many of those reliant on cross-border trade for their livelihoods are women, who have been disproportionately affected by restrictions, border closures and curfews enforced due to Covid-19, alongside gender-based discrimination and violence,” said Ishmael Sunga, member of the Malabo Montpellier Panel and Chief Executive Officer of the Southern African Confederation of Agricultural Unions (SACAU).
“Once the AfCFTA is in place, wages for skilled and unskilled women are expected to rise by up to four per cent by 2035, through new employment opportunities across the agriculture value chain.”
The report outlines how to address tariff and nontariff barriers, and how to improve and expand infrastructure, for instance by addressing cumbersome customs procedures, roadblocks, subsidies, and technical barriers such as sanitary and phytosanitary (SPS) rules.
New digital solutions can help, such as introducing radio frequency identification (RFID) or microchipping for tracking livestock, or the digital storage and exchange of safety certificates for easy and quick transmission across countries.
The report also provides examples of how to enhance value chain competitiveness and strengthen crisis preparedness and resilience, with emphasis placed on those food products that are of high value and contribute to improved nutrition at the same time.
This calls for investments into the design and development of technologies that improve both the quantity and quality of food. Furthermore, the provision of training facilities needs to be enhanced to expand access to opportunities for skill development and innovation capacity along the value chain.
“Rule-based open trade is essential for an efficient and sustainable African food system, and keeps food prices more stable, which is good for producers and consumers” said Joachim von Braun, co-chair of the Malabo Montpellier Panel.
“The next ambition can be a fair and deep trade partnership between the African Union and the European Community.”
Every year, between 10 and 12 million young Africans enter the job market, vying for one of only about 3.1 million jobs created. Although agriculture and informal sectors are already the highest employers on the continent, they are likely to accelerate employment creation as the demand for food across the continent rises.
“As mechanization and digitalization expand across food systems, new entrepreneurship opportunities – beyond the farm – will emerge in the agri-food sector, creating the potential for high-quality, sustainable jobs across Africa,” said Debisi Araba, member of the Malabo Montpellier Panel member and managing director of the African Green Revolution Forum (AGRF).
The Panel drew on the experiences of Africa’s existing regional trading blocs, such as the Common Market for Eastern and Southern Africa (COMESA), Economic Community of West African States (ECOWAS), and the Southern African Development Community (SADC), including governance systems, institutional policy innovations, and programmatic interventions.
EU boosts sustainable cocoa production in Côte d’Ivoire, Ghana and Cameroon
The European Union will contribute €25 million to enhance the economic, social and environmental sustainability of cocoa production in Côte d’Ivoire, Ghana and Cameroon who are, respectively, the first, second and fifth biggest cocoa producers, generating almost 70% of the world production. This funding strengthens the partnership between Team Europe (composed of the EU, its Member States, and European financial institutions) and the three cocoa producing countries and aims at ensuring a decent living income for farmers, halting deforestation and eliminating child labour.
Valdis Dombrovskis, Executive Vice-President for an Economy that Works for People, said: “The EU trade agenda is underpinned by EU values. By investing in programmes to promote fair trade and sustainability in the cocoa sectors of Côte d’Ivoire, Ghana and Cameroon, we are strengthening our trade and investment relationships for our mutual benefit. Building the social and environmental aspects of the cocoa supply chain will deliver further economic benefits for local farmers and cooperatives.”
Jutta Urpilainen, Commissioner for International Partnerships, said: “European consumers are demanding fair and environmentally sustainable products and producing countries committed to address sustainability issues in their cocoa value chains. It is time to make a real change and the EU is committed to play its part as an honest broker between economic operators, development partners, Côte d’Ivoire, Ghana and Cameroon.”
Following the launch event of the EU inclusive dialogue on sustainable cocoa, the “Cocoa Talks”, on 22 September 2020, today takes place the Cocoa Talks inaugural round-table webinar with the participation of EU public and private stakeholders and selected representatives of the two main producing countries, Côte d’Ivoire and Ghana. The objective of this dialogue is to enhance cooperation and coordination to support sustainable cocoa production in the framework of the Living Income Differential (LID) initiative, launched by the two producer countries to ensure decent revenue to local farmers.
The EU dialogue will be mirrored by similar dialogues at country level. Concretely, the €25 million will fund parallel multi-stakeholder dialogue events at national and regional level in Côte d’Ivoire, Ghana and Cameroon, involving government, private sector companies and civil society. It will improve the ability of farmers’ cooperatives and other bodies to represent local communities. It will train farmers on sustainability, tree replacement, reforestation, and ensure their awareness of child labour regulations.
Cocoa is a major contributor to export earnings, as well as the main source of livelihoods for almost seven million farmers in Côte d’Ivoire and Ghana. Indirectly, cocoa contributes to the livelihoods of further 50 million people. At the same time, cocoa production entails particular risks relating to child labour, low revenues for local farmers, deforestation and forest degradation.
The European Union is the world’s largest importer of cocoa, accounting for 60% of world imports. Côte d’Ivoire, Ghana and Cameroon are major suppliers of cocoa into the EU market, to which the first two have duty-free and quota-free access under their respective Economic Partnership Agreements.
In June 2019, Côte d’Ivoire and Ghana took an initiative on cocoa prices that led to an agreement with the cocoa and chocolate industry to create a Living Income Differential (LID) to ensure decent revenue to local farmers. At this stage, it is a US$400/ton premium paid beyond the price of the cocoa futures markets. Cameroon has expressed interest to join the initiative.
Building on this initiative and in line with its political priorities under the EU Green Deal and the Commission’s ‘zero tolerance’ approach to child labour, the EU engaged in a partnership with Côte d’Ivoire and Ghana to link this price increase to further action with respect to deforestation and child labour related to cocoa production.
It translated into an EU-based multi-stakeholder dialogue launched on 22 September 2020 with representatives from the EU institutions and Member States, civil society, private sector and Ivoirian and Ghanaian representatives to:
- Advance responsible practices of EU businesses involved in cocoa supply chains;
- Feed into other relevant horizontal Commission initiatives (e.g. on due diligence, deforestation);
- Feed into the policy dialogue between the EU and the producer countries; and
- Identify support projects on sustainable cocoa production.
Sudan: 250 killed, over 100,000 displaced as violence surges in Darfur
A sharp uptick in intercommunal violence in Sudan’s Darfur region has forced more than 100,000 people to flee their homes in search of safety, including many into neighbouring Chad, the UN refugee agency (UNHCR) reported on Friday.
According to the agency, 250 people – including three humanitarian workers – also lost their lives in the clashes that started on 15 January in West Darfur province, and spread into South Darfur the next day.
“These refugees – the majority of them women and children – have been hosted in four very remote locations that lack basic services or public infrastructure, where they have been sheltering under trees,” he said.
“Due to the COVID-19 situation, Chadian local authorities are directing the new arrivals to a transit site, where they will undergo quarantine before being relocated to an existing refugee camp, away from the border,” the UNHCR spokesperson added.
He said that the UN agency is rushing supplies to the area to respond to their needs, as well as mobilizing resources as part of an inter-agency response.
‘Break the cycle of violence’
Authorities in the region have been attempting to contain the situation and have deployed security forces to the area but “severe gaps” in protection remain, according to the UN human rights office.
However, an “imminent risk” of further violence remains, in an environment “where decades-old ethnic and tribal tensions that were further stoked by the previous regime continue to fester”, OHCHR spokesperson Ravina Shamdasani said at the same briefing.
There are reports that local health facilities are unable to cope with the high number of casualties, she added.
The OHCHR spokesperson called on the Government of Sudan to protect of civilians as well as restore public order and the rule of law in Darfur.
She also called for thorough and effective investigations into the violence to bring the perpetrators to justice and “to break the cycle of armed citizens taking the law into their own hands to avenge attacks on members of their communities.”
A vast, strife-torn region
Darfur, a vast region roughly the size of Spain and plagued by violence for years, was the site of a United Nations-African Union hybrid peacekeeping mission (UNAMID) that was deployed to protect civilians, facilitate aid delivery, and support efforts to address root causes of the conflict.
The mandate of UNAMID ended last year and it ceased operations on 31 December 2020, roughly two weeks before the latest round of violence.
The mission is currently drawing down, a process that includes repatriation of troops, their vehicles and other equipment; the separation of civilian staff; and the closure of its offices.
COVID ‘vaccine hoarding’ putting Africa at risk
Africa is in danger of being left behind in the rollout of COVID-19 vaccines as countries in other regions strike bilateral deals, thus driving up prices, the World Health Organization (WHO) warned on Thursday.
Although vaccines have been administered in 50 wealthier nations, Guinea is the sole low-income country on the continent to receive doses, with only 25 people being inoculated so far. Meanwhile, Seychelles is the only African country to start a national vaccination campaign.
‘We first, not me first’
“We first, not me first, is the only way to end the pandemic. Vaccine hoarding will only prolong the ordeal and delay Africa’s recovery. It is deeply unjust that the most vulnerable Africans are forced to wait for vaccines while lower-risk groups in rich countries are made safe”, said Dr Matshidiso Moeti, WHO Regional Director for Africa.
“Health workers and vulnerable people in Africa need urgent access to safe and effective COVID-19 vaccines.”
An international coalition known as the COVAX Facility was established to ensure all countries will have equal access to any vaccines against the new coronavirus disease.
It is co-led by the Coalition for Epidemic Preparedness Innovations (CEPI), Gavi, the Vaccine Alliance, and WHO.
The COVAX Facility has secured two billion doses of vaccine from five producers, with options for over one billion more. Delivery is set to begin soon, according to Thabani Maphosa, Managing Director, Country Programmes at GAVI.
“This massive international undertaking has been made possible thanks to donations, work towards dose-sharing deals and deals with manufacturers that have brought us to almost two billion doses secured. We look forward to rollout in the coming weeks”, he said.
COVAX has committed to vaccinating at least 20 per cent of the population in Africa by the end of this year.
Priority will be given to health workers and other vulnerable groups, such as older persons and those with pre-existing health conditions.
An initial 30 million vaccine doses are expected to begin arriving in countries by March. Overall, a maximum of 600 million doses will be disbursed, based on two doses per person.
WHO said timelines and quantities could change, for example if vaccines fail to meet regulatory approval or due to challenges related to production, delivery and funding.
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