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Inadequate data likely to affect impact of Covid-19 on agricultural trade – Senior Research Fellow

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The poor and incomplete nature of African trade data is likely to affect the collection and analysis of information to show the impact of Covid-19 on agricultural trade on the continent, a senior research fellow at the Washington-based, International Food Policy Research Institute (IFPRI), Antoine Bouet has told GBC Radio.

Bouet said, official databases of African trade are known to be imprecise or even wrong, stating that, “there is a broad consensus among economists that, import declarations more accurately indicate trade flows than exports declarations.”

“Limited data showing restricted mobility the recent decrease in exports as well as border closures, suggest the pandemic and reactive policies adopted by African governments, may further limit agricultural trade in Africa in 2020,” he said.

Bouet, who is a co-author of the 2020 Africa Agriculture Trade Monitor (AATM) has therefore called for improved trade policies together with enhanced frontier procedures and an improvement in non-tariff measures to help expand trade in agriculture produce across the African continent.

Responding to issues raised in the AATM, he said, “trade policies continue to stunt African trade, and border formalities continue to inhibit trade, as well as non-tariff measures, remain real impediments for African agriculture trade,” adding that, “predominant barriers include sanitary and phytosanitary measures, conformity assessment and distortionary domestic agricultural support in the US, EU, Brazil and China.”

The AATM which is the third in the series, said African exports were expanding into emerging and fast-growing countries while agricultural exports in Africa showed an upward trend between 2003 and 2018. The diversification of destinations has brought about increased trade exports to Brazil, Russia, India, China, and other Asian countries.

Other countries that have also experienced increased exports include, Saudi Arabia, Viet Nam, United Arab Emirates, Turkey, Malaysia, and Pakistan, the report said, adding that “this diversification has resulted in a progressive decrease in the EU’s share as a top destination for African exports, from 45 percent in 2005–2007 to 36 percent in 2016–2018.”

It said among African countries, nontariff measures remain the main obstacle to raising the continent’s trade competitiveness and improving Africa’s trade integration. In addition, customs formalities as well as regulatory and administrative barriers which raise the cost of trading are major impediments to the expansion of African agricultural trade, along with insufficient transport and communication infrastructure as well as inefficient credit and insurance markets.

The report showed that there is room for expanding intra-African trade by further opening countries to extra-regional trade flows, adding that, while, intracontinental agricultural exports have steadily grown over the past two decades, growth is largely dominated by SADC and COMESA member countries and trade occurs predominantly within regional economic communities (RECs).

On average, SADC and COMESA retained 84 per cent and 66 per cent of their intra-Africa exports within their respective regions in 2016–2018. This diversification coincides with a progressive decrease in the European share as a top destination for African exports from 45 per cent in 2005 – 2007 to 36 per cent in 2016-2018.

Bouet said, the report covered African agricultural trade over the period 2003 2018 and was aimed at presenting “annual statistics and trade indicators about the state of African agricultural trade, the evolutions of comparative advantages of market shares and competitiveness of African value chains that will be relevant to policy makers and other stakeholders.”

He said African trade deficit in staple food products increased particularly for the main cereals, the sugar value chain and that of vegetable oil which showed a deficit near $40billion in 2019 a four-fold increase from US$ 10 billion in 2003.

“Nonetheless economic and population growth in Africa outpaced the rest of the world and this leads to a strong natural growth of African imports. And there are many agricultural products for which the African trade balance is positive cocoa, coffee, tea, sesame seed, cotton, tomatoes, for example,” Bouet said.

The report, put together by 11 authors nine of whom are Africans was a collaborative initiative between the IFPRI together with the Rwandan non-governmental organization, AKADEMIYA 2063, builds on the work of the Regional Strategic Analysis and Knowledge Support System (ReSAKSS).

All chapters and authors utilize the AATM’S current database, which has one of its most distinguishing characteristics, as the ability of nations to trade but also conduct a series of data treatments to correct Salient flaws and errors and achieve more accurate estimates of trade.

Bouet said, the report recommends an ambitious implementation of the African continental free trade area starting early 2021 with removal of import duties, simplification of customs procedures and substantial eradication of non-tariff measures such as sanitary and phytosanitary measures and other technical barriers to trade.

BY: Joyce Anim-Ayeko.

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