Africa’s untapped opportunity: How Africa’s free-trade area could catalyse the agricultural sector’s development~NEWSEXTRA - NEWS EXTRA ONLINE


Wednesday, 2 December 2020

Africa’s untapped opportunity: How Africa’s free-trade area could catalyse the agricultural sector’s development~NEWSEXTRA

....Louis van Ravesteyn, pan-Africa Head of Agribusiness, Personal and Business Banking, Standard Bank Group

The African Continental Free-Trade Area (AfCFTA) could accelerate the development of sub-Saharan Africa’s agricultural sector and help the continent to become self-sufficient in food production.

The trading bloc, which is set to become operational in January 2021, will significantly increase intra-African trade over time as it dismantles barriers to trade – including import tariffs and non-tariff barriers such as customs delays, restrictive licensing processes, and certification challenges.

The World Bank said in a recent report that 60% of African countries are likely to see increased agricultural employment by 2035 thanks to AfCFTA, and wages for unskilled workers are expected to grow faster in these nations. 

While some countries will gravitate towards other sectors in which they have competitive advantages, North African states will shift more towards manufacturing and services.  Many in sub-Saharan Africa are well placed to become food production hubs, thanks in part to favourable climates. 

The World Bank estimates that by 2035, agriculture will account for more than 50% of total employment in several East African countries, including Kenya, Ethiopia, Uganda, Tanzania and Madagascar.

And by that time, intra-African trade in agriculture will likely be 49% higher than today, according to the study. 

Africa’s abundance of uncultivated arable land, together with favourable climatic conditions in several countries and underutilised fresh-water resources, gives the continent significant headroom to produce more for regional and international export markets. 

Those countries that adopt the latest technologies and develop strategies to remain competitive in the global marketplace will fare best. To compete over the long term, producers and governments need to plan and adopt strategies that are associated with characteristics of more mature markets to stay ahead of the curve
Further, any increases in output should be demand-driven. Products should be well researched and diversified, and production should be viable in terms of export-parity pricing.

Better cooperation As countries establish themselves as major agricultural producers, there is an opportunity to share best practices across the continent. This includes the adoption of appropriate production systems, the development of infrastructure that supports.

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