Session VII - The Ukraine Crisis & African Economies - Opportunities and Potential for the Expansion of Regional Food Trade

1. Opportunities and Potential for the Expansion
of Regional Food Trade
Dr. Sunday Odjo
Deputy Director, Department of Operational Support
AKADEMIYA2063

2. OUTLINE
 INTRODUCTION
 TRADE INDICATORS USED : CALCULATIONS AND INTERPRETATIONS
 FINDINGS
• TRADE OVERLAP AND REGIONAL TRADE EXPANSION POTENTIAL
• COMMODITY LEVEL TRADE EXPANSION POTENTIAL
• LEADING COUNTRIES TO EXPLOIT THE REGIONAL TRADE POTENTIAL
 CONCLUSION

3. THE TRADE OVERLAP INDICATOR (TOI)
𝑇𝑂𝐼𝑖 = 2 𝑘 𝑀𝑖𝑛 𝐸𝑖𝑘, 𝑀𝑖𝑘 𝑘 𝐸𝑖𝑘 + 𝑀𝑖𝑘 ,
𝑖 : a country or region (Africa, ECOWAS, ECCAS, COMESA, SADC, AMU)
𝐸𝑖𝑘 : 𝑖’s global export of agricultural product 𝑘
𝑀𝑖𝑘 ∶ 𝑖’s global import of agricultural product 𝑘
𝑘 : defined at HS 6-digit level.
𝑇𝑂𝐼 varies between 0 (no overlap) and 1 (perfect overlap)
𝑇𝑂𝐼𝑖 value indicates the share of region 𝑖′s total trade that overlaps and could
hence be redirected from extra-regional to intra-regional trade partners

4. THE TRADE EXPANSION INDICATOR (TEI)
𝑇𝐸𝐼𝑖𝑘 = 100 ∙ 𝑀𝑖𝑛 𝐸𝑖𝑘, 𝑀𝑖𝑘 𝑀𝑎𝑥 𝐸𝑖𝑘, 𝑀𝑖𝑘
𝑖 : a region (Africa, ECOWAS, ECCAS, COMESA, SADC, AMU)
𝐸𝑖𝑘 : 𝑖’s global export of agricultural product 𝑘
𝑀𝑖𝑘 ∶ 𝑖’s global import of agricultural product 𝑘
𝑘 : defined at HS 6-digit level.
𝑇𝐸𝐼 varies between 0% (no overlap) and 1oo% (perfect overlap)
𝑇𝐸𝐼𝑖𝑘 value indicates the share of 𝑖′s majority flow of product 𝑘 that could be
redirected to intra-continental (regional) partners

5. THE REVEALED COMPARATIVE ADVANTAGE (RCA) INDEX
𝑅𝐶𝐴𝑖𝑘 =
𝐸𝑖𝑘
𝐸𝑖.
𝐸𝑤𝑘
𝐸𝑤.
𝑁𝑅𝐶𝐴𝑖𝑘 =
𝑅𝐶𝐴𝑖𝑘−1
𝑅𝐶𝐴𝑖𝑘+1
(Normalized RCA)
𝑖 : a country
𝐸𝑖𝑘 : 𝑖’s global export of agricultural product 𝑘
𝐸𝑖. : 𝑖’s total export of agricultural products : 𝐸𝑖. = 𝑘 𝐸𝑖𝑘
𝐸𝑤𝑘 : the world’s export of agricultural product 𝑘
𝐸𝑤. ∶ the world’s total export of agricultural products : 𝐸𝑤. = 𝑘 𝐸𝑤𝑘
𝑘 : defined at HS 6-digit level.
𝑅𝐶𝐴𝑖𝑘 > 1 : comparative advantage; otherwise: comparative disadvantage.
−1 < 𝑁𝑅𝐶𝐴𝑖𝑘< 1 : positive values indicate comparative advantage as opposed to negative values

6. REGIONAL AGRICULTURAL TRADE OVERLAP INDICATOR (TOI) VALUES (2011-2020)
0.00
0.10
0.20
0.30
0.40
0.50
0.60
0.70
ECCAS AMU ECOWAS COMESA SADC Africa
2011-2015 2016-2020
OVERLAPPING AGRICULTURAL TRADE FLOWS ARE THE HIGHEST IN COMESA AND
SADC: 30% AND 40% OF TOTAL REGIONAL TRADE, RESPECTIVELY
 The higher a region’s TOI the higher the potential for that region to expand regional trade by
redirecting trade flows from extra-regional to intra-regional trade partners.
Source: Authors’ calculations based on 2022
Africa Agriculture Trade Monitor (AATM) data.
Notes: AMU: Arab Maghreb Union. COMESA:
Common Market for Eastern and Southern
Africa. ECCAS: Economic Community of Central
African States. ECOWAS: Economic Community
of West African States. SADC: Southern African
Development Community.

7. NORMALIZED TRADE OVERLAP INDICATORS BY COUNTRY (2011-2020)
OVERLAPPING TRADE FLOWS ORIGINATE FROM DIFFERENT COUNTRIES,
WHICH CONFIRMS THE POTENTIAL FOR BOOSTING REGIONAL TRADE
• Normalized TOI < 1 for the vast majority of countries
Source: Authors’ calculations based on 2022 Africa Agriculture Trade Monitor (AATM) data.

8. 0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Cereals Oilseeds Vegetable
oils
Other
agricultural
products
Proportion
of
product
lines
(HS
6-digit
level)
80-100
60-80
40-60
20-40
0-20
TEI value,
Africa
(%)
THE POTENTIAL FOR EXPANDING REGIONAL TRADE BY REDIRECTING TRADE
FLOWS IS LARGER FOR OILSEEDS AND VEGETABLE OILS THAN FOR CEREALS
DISTRIBUTION OF TEI VALUES BY PRODUCT GROUP IN AFRICA’S TRADE FLOWS, 2016-2020
 TEI value higher than 60% is conventionally indicative of real scope for trade expansion
Source: Authors’ calculations based on 2022 Africa Agriculture
Trade Monitor (AATM) data.
Notes: TEI: Trade Expansion Indicator; HS: Harmonized System.

9. THE TRADE EXPANSION
POTENTIAL FOR INDIVIDUAL
COMMODITY GROUPS IS
SIGNIFICANTLY LARGER AT
THE CONTINENTAL LEVEL
THAN AT THE REGIONAL
LEVEL
DISTRIBUTION OF TEI VALUES BY PRODUCT GROUP IN REGIONAL TRADE FLOWS, 2016-2020
• Across the different RECs, the
share of products (cereals,
oilseeds, vegetable oils) with
TEI values above 60% does not
exceed 10%
Source: Authors’ calculations based on 2022 Africa Agriculture
Trade Monitor (AATM) data.
Notes: TEI: Trade Expansion Indicator; HS: Harmonized System.
AMU: Arab Maghreb Union. COMESA: Common Market for
Eastern and Southern Africa. ECCAS: Economic Community of
Central African States. ECOWAS: Economic Community of West
African States. SADC: Southern African Development Community.

10. Cereals Oilseeds Vegetable oils
ECOWAS
Guinea 0.997 Niger 0.991 Senegal 0.987
Togo 0.993 Togo 0.980 Gambia 0.987
Mali 0.981 Nigeria 0.975 Benin 0.980
ECCAS
Cameroon 0.783 Chad 0.984 Gabon 0.983
DRC 0.629 DRC 0.970 Angola 0.976
Rwanda 0.610 Rwanda 0.936 CAR 0.975
COMESA
Ethiopia 0.995 Ethiopia 0.993 Seychelles 0.989
Djibouti 0.961 Sudan 0.984 Sudan 0.957
Uganda 0.921 DRC 0.970 Somalia 0.927
SADC
Zambia 0.906 DRC 0.970 Seychelles 0.989
Mauritius 0.790 Zambia 0.965 Angola 0.976
DRC 0.629 Mozambique 0.956 Mauritius 0.903
AMU
Tunisia -0.284 Morocco 0.986 Mauritania 0.995
Libya -0.395 Algeria 0.984 Tunisia 0.973
Mauritania -0.698 Tunisia 0.534 Algeria 0.911
TOP 3 COUNTRIES WITH THE HIGHEST NORMALIZED RCA INDEX VALUES BY
PRODUCT CATEGORY AND BY REGION, 2016-2020
COUNTRIES WITH THE
HIGHEST LEVEL OF
COMPETITIVENESS WILL
PLAY A BIGGER ROLE IN
RESPONDING TO RISING
GLOBAL PRICES AND SUPPLY
SHORTAGES TO CAPTURE
TRADE OPPORTUNITIES IN
REGIONAL MARKETS.
Source: Authors’ calculations based on 2022 Africa
Agriculture Trade Monitor (AATM) data.
Notes: AMU: Arab Maghreb Union. COMESA: Common
Market for Eastern and Southern Africa. ECCAS:
Economic Community of Central African States.
ECOWAS: Economic Community of West African States.
SADC: Southern African Development Community.

11. CONCLUSION
THE SCOPE TO EXPANDING REGIONAL TRADE IN RESPONSE TO SUPPLY SHORTAGES AND
RISING GLOBAL COMMODITY PRICES IS MUCH LARGER FOR OILSEEDS AND VEGETABLE
OILS THAN FOR CEREALS.
IT IS ALSO LARGER AMONG COMESA AND SADC COUNTRIES THAN IT IS FOR OTHER
REGIONAL TRADING BLOCS
More information on this research may be found in: Badiane, O. and Odjo, S., 2022. The
Regional Trade Expansion Potential in Cereals, Oilseeds, and Vegetable Oils. AKADEMIYA2063
Ukraine Crisis Brief Series, No. 004., AKADEMIYA2063, Kigali, Rwanda.

12. THANK YOU