According to the World Bank, the African Continental Free Trade Area (AfCFTA) agreement is expected to create the largest free trade area in the world measured by the number of countries participating. The agreement connects 1.3 billion people across 55 countries in Africa, with a combined gross domestic product (GDP) valued at US$3.4 trillion. The AfCFTA has the potential to improve the living standards of 30 million people, and expected to reduce extreme poverty. Achieving the full potential of AfCFTA, however, will depend on establishing significant policy reforms and trade facilitation measures.
Notwithstanding the initial challenges the AfCFTA faced, the ratification process and the subsequent official commissioning and handing over of the AfCFTA Secretariat Building in Accra, Ghana, on 17 August 2020, further added credit to the African Union Commission, Governments and people of Africa.
What opportunities does the AfCFTA bring to the Africa’s agricultural sector?
First, free trade plays an important role in delivering food to consumers within the trade area, and beyond. It provides greater choice in consumer goods: stimulating demand and ensuring the supply of such goods. The main intents of the AfCFTA are to create a single continental market for goods and services, with free movement of persons and investments, and thus pave the way for accelerating the establishment of a robust market, herein, agricultural market.
Second, the AfCFTA has the potential of reducing food insecurity across the continent. Emerging markets for agricultural produce will significantly drive the production, manufacturing and processing segments in the value chain. All things being equal, a constant flow of food, with stringent food safety protocols, will improve the affordability, accessibility and safety parameters of food security.
Thirdly, there is a potential for poverty reduction through agriculture. The overall goal of any economic policy or treaty, such as AfCFTA, is poverty reduction. The cliché that agriculture is the backbone of the Africa’s economy will be truly manifested if the AfCTA is properly implemented. The status of the agricultural sector in the continent has not reached its full potential yet. Exports in the trade area is expected to increase substantially to about $560 billion according to the World Bank. This will improve significantly the livelihood of the people in Africa.
Fourthly, agricultural produce from Africa will be able to compete on the Global market. Poor safety protocols most often lead to frequent rejection of agricultural produce by other trade blocs like the EU, China, US and other major markets. With stringent production and safety protocols within the Africa free trade area, standards to compete with these trade blocs will be enhanced. Thus, there is a potential for reduction in the frequent rejection of agricultural produce by these trade blocs because of poor safety protocols. Finally, the actual linkages between agricultural and other sectors of the economy, will be well collaborated, to ensure impacts of trade and domestic support measures are transmitted more widely.
May the AfCFTA deliver the continent from the quagmire of food insecurity and poverty! Long live Africa, and her beloved people!
This article was written by Haruna Gado Yakubu. He is a Research Fellow at CEBSAR-AFRICA.