The African Union (AU) plans to facilitate supply chain improvements in Africa through the construction of industrial parks to improve the manufacturing of agricultural products, a senior AU Commission official has said. The AU Commissioner for Agriculture and Rural Development, Josefa Sacko, said an initiative to improve cross-border trade has been agreed and would be implemented. The Commission is supporting the implementation of the African Common Agricultural Parks (CAAPs), the cross-border initiative focused on agro-processing through small-scale factories.
The AUC is aggressively facilitating supply and improvement in basic infrastructure to support export processing in Africa, Sacko said during a virtual webinar on improving the agricultural trade in Africa.
“We are motivated by the knowledge that the manufacturing is responsible for a lower share of Africa’s exports and a key driver of intra-African trade,” the Commissioner said. The average import account in the African continent reached a total of US$80 billion, growing about 6% every year, the Commissioner whose portfolio also includes the Blue Economy and Sustainable Environment, said. The AU Commission launched the framework to boost intra-African trade in agricultural products and services during a forum it organised with the United Nations Food and Agriculture Fund (FAO) on 17 April. According to the AU, Africa’s demand for food exceeds the domestic supply by 20%.
The AU recommends the continent should take advantage of the fast-growing intra-African market opportunities, with the agriculture sector in need of a structural transformation that implies the shift from production systems focused on the subsistence market into others that guarantee benefits for the most vulnerable segments of the population. These include small farmers, rural women and the establishment of a linkage with farmers to the supply chains of regional and global value. Sacko recognised the important role the agricultural sector plays in Africa.
Agriculture is the dominant sector of the African economy, in terms of its contribution to GDP growth, employment and trade, with African Heads of State pledging to promote intra-African trade in agricultural products and services, markets and local, regional and international trade opportunities.
African leaders pledged to treble, by the year 2025, intra-African trade in agricultural products and services, to create and improve policies and institutional conditions and food support systems, to simplify and formalise current commercial practices, as well as, accelerating the establishment of the African Continental Free Trade Area (AfCFTA) and the transition to a common Continental External Tariff (CET) scheme.
The AU Commissioner noted that market access remains a key challenge, for both intra- and extra-African trade, giving the assurance that the African Union Commission has given support in terms of capacity building of related bodies and chambers of the domestic private sector to appropriately respond to the opportunities offered in the African Continental Free Trade Area (AfCFTA) agreements. “Africa’s trade is carried out largely by informal traders, which is a sign of institutional failure and is a testament to the fact that there is a shortage of trade-related capacities in Africa.”
Sacko gave the assurance that the establishment of the AfCFTA further reinforces the gains to be achieved in terms of regional integration, in opening up new market opportunities for farmers and other economic operators. High population growth, rapid urbanisation and rising incomes will provide an opportunity not only to increase trade in food and non-food agricultural products and services, but also to increase food security in Africa, she said. “It is common knowledge that Africa is a region that imports food, such as cereals, meat, dairy products, fats, oils and sugar, as the continent’s demand for food continues to exceed domestic supply.”
Meanwhile, the African Union Commission is developing a structure to boost intra-African trade in agricultural commodities and services that will guide Member States and partners in advancing the implementation of the agricultural perspectives and opportunities offered by AFCFTA agenda. (PANA/NAN)
