The Brussels Development Briefing n.47 on the subject of “Regional Trade in Africa: Drivers, Trends and Opportunities” took place on 3rd February 2017 in Brussels at the ACP Secretariat (Avenue Georges Henri 451, 1200 Brussels) from 09:00 to 13:00. This Briefing was organised by the ACP-EU Technical Centre for Agricultural and Rural Cooperation (CTA), in collaboration with IFPRI, the European Commission / DEVCO, the ACP Secretariat, and CONCORD .

1. Trends in
African Agricultural Trade
Brussels Policy Briefings No. 47
Regional Trade in Africa: Drivers, Trends and Opportunities
Ousmane Badiane, Director for Africa
Brussels, February 3, 2017

2. Trends in African Agricultural Trade
 Composition and Direction of African Agricultural Trade
 Changing nature of African Agricultural Trade Balance
 Competitiveness in Global and Regional Markets
 Intra-African Trade: Trends and Outlook – The case of ECOWAS
Outline
Source: African Agricultural Trade Status Report (2017)
Unless otherwise specified, graphs are based on data from Base pour le commerce
international (BACI), Centre d’Etudes Prospectives et d’Information Internationales (CEPII).

3. Share of Top 10 Ag. Exports (value) - 1998 Share of Top 10 Ag Exports (value) - 2013
Change in African Trade Composition - EXPORTS
 Traditional commodities continue to dominate African Exports
 Coffee and cotton have lost ground
 Cocoa remains dominant export
 Citrus fruits and oilseeds have moved up

4. Change in African Trade Composition - IMPORTS
 Wheat is by far the largest import
 Rice has gained significant shares and now ranks second
 Palm oil has made the largest gains; now ranks 4th, closely behind sugar
 Meat has made its entry recently
Share of Top 10 Ag. Imports (value) - 1998 Share of Top 10 Ag Imports (value) - 2013

5. Direction of Agricultural Trade by African Countries
Exports Imports
 African countries are destination of 20% of African exports
 15% of imports originate from other African countries
 EU is the largest trading partners for both exports and imports
 Asia is a close second
 Americas play a more significant role as a source of imports

6. Direction of Agricultural Trade by African Countries
Exports Imports
 EU has been losing market shares rather rapidly
 Asia has gained shares and is now close to EU
 African countries are also gaining shares, particular for exports
 America’s shares have remained unchanged

7. African Share in Global Agricultural Exports Share of agriculture in Total African exports
Source: Unless otherwise specified, graphs are based on data from Base pour le commerce
international (BACI), Centre d’Etudes Prospectdives et d’Information Internationales (CEPII).
Evolution of the Role
of Africa in Global Markets and Agriculture in African Exports
 Share of Africa in global Agricultural Markets within 3-4% range
 Share of agriculture in African Exports fell by 50% in last 15 years

8. Total agricultural exports, current US$B Normalized Agricultural Trade Balance
African Agricultural Trade Balance
 African exports have increased more than 3 times
 But imports rose nearly 5 times
 Import gap started to widen in early 2000s
 Import gap is now around 20% of total value of trade

9. -80
-60
-40
-20
0
20
40
1996 1998 2000 2002 2004 2006 2008 2010 2012 2014
Africa ECOWAS ECCAS COMESA SADC
Regional Dimension of Trade Imbalance
 ECCAS has experienced rapid deterioration
 Same with SADC which moved form net exporter to net importer
 ECOWAS has the lowest gap, but also turned net importer
 All regions have lost their next exporting position around 10 years ago

10. Main Commodities Contributing to Agricultural Imports Gap
sugar
maize
wheat
rice
palm oil
wheat
wheat
milk
cream
 Wheat is a major import from all regions
 It is followed by milk products in Europe
 Rice & Palm oil are the main net imports from Asia
 Sugar and maize from Americas

11. • Agricultural production collapsed
in the 1970s-1980s
• But population continued to
grow
• Unmet demand continued to pile
up
• Rising incomes in post 2000s
accelerate demand
• Agriculture grows again but rates
cannot keep up with demand
Why the Growing Trade Gap Despite Rising African Production and Exports
Source: Badiane et al (2016).

12. 0.95
0.98
1.01
1.04
1.07
1.10
COMESA ECCAS ECOWAS SADC Africa
Averagecompetitiveness
change
0.92
0.94
0.96
0.98
1.00
1.02
1.04
1.06
1.08
1.10
COMESA ECCAS ECOWAS SADC Africa
Averagecompetitiveness
change
Global markets Regional Markets
Average Change in Export Competitiveness: 1998-2013
 Africa lost competitiveness in global markets but gained in regional markets
 ECOWAS increased competitiveness the most in global markets
 COMESA gained competitiveness the most in regional markets
Value > 1 means increase in competitiveness

13. 0.7
0.8
0.9
1.0
1.1
1.2
1.3
EquatorialGuinea
WesternSahara
Angola
Chad
SaoTome&Principe
CentralAfricanRep.
Zimbabwe
Gabon
Mali
D.R.Congo
Madagascar
Eritrea
Benin
Libya
Guinea
Sudan
Mauritius
Senegal
Congo
Côted'Ivoire
Burundi
Seychelles
Malawi
Comoros
Cameroon
SACUcountries
Gambia
Kenya
Mauritania
SaintHelena
Togo
Morocco
Uganda
Tanzania
Niger
Tunisia
Mozambique
BurkinaFaso
GuineaBissau
SierraLeone
Liberia
Zambia
Ghana
Rwanda
Ethiopia
Nigeria
Egypt
Djibouti
Algeria
Somalia
CapeVerde
Changeincompetitiveness Country Competitiveness in Global Markets: 1998-2013
 Around 40 percent of all countries have become more competitive
 About 50% have seen no major changes
 10 percent have become less competitive
Value > 1 means increase in competitiveness

14. 0.90
0.95
1.00
1.05
1.10
1.15
1.20
1.25
Groundnutoil
Meat&edibleoffal
Organicchemicals
Poultry
Cotton,notcardedorcombed
Coffee
Canesugar
Spices
Palmoil
Fish&seafoods
Hides&skins
Othercereals
Ediblepreps.ofmeat,fish&crustaceans
Tea
Preps.ofvegs.,fruits&nuts
Gums&resins
Cocoabeans
Otheranimalproducts
Groundnuts
Cotton,cardedorcombed
Ediblefruits&nuts
Essentialoils&resinoids
Sugarconfectionery
Oliveoil
Otheroilseeds
Othervegetabletextilefibres
Misc.ediblepreparations
Rice
Furskins
Beverages,spirits&vinegar
Millingindustryproducts
Vegetableplaitingmaterials
Finishingagentsfortextiles&paper
Sorghum
Maize
Potatoes
Tobacco&substitutes
Tomatoes
Albuminoidalsubstances
Residuesfromfoodindustries
Cocoapreparations
Medicinalplants
Wheat
Onions&substitutes
Otherlivetrees&plants
Otherediblevegetables
Otherliveanimals
Otheroils&facts
Soybeans
Wool
Preps.ofcereals,flour,starchormilk
Sheep&goats
Animalfats
Roots&tubers
Dairy,eggs&honey
Silk
Cattle
Soybeanoil
Rye,barley&oats
Changeincompetitiveness
Value > 1 means increase in competitiveness
Commodity Competitiveness in Global Markets: 1998-2013
 Competitiveness increased for 75% of export commodities
 Little change / modest loss of competitiveness for 25% of commodities

15.  Land productivity
 Public ag. expenditure to ag. GDP ration of exporter
 Efficiency of customs clearing index
 Quality of port
 Exporting countries’ GDP
 Importing countries’ GDP
 Road density
Key Determinants of Trade Performance

16. Evolution of Intra-African Trade
 The share of intra-African trade has increased sharply since 2000
 But the level is still a fraction of what is observed in other regions

17. 0%
5%
10%
15%
20%
25%
30%
Africa ECOWAS ECCAS COMESA SADC
1998-2006 2007-2013 Overall
Growth in Intra-regional Trade (Value)
 Intra-trade has grown by an average of between 10 and 15%
 Growth has accelerated over time for ECOWAS and SADC
 It has fallen drastically in ECCAS

18. 2001-2005 2006-2010 2011-2013
Live animals 87.7 155.6 95.7
Fish & animal products 165.7 348.4 439.2
Vegetables 27.3 28.1 133.7
Cereals 30.1 81.5 64.5
Oilseeds 16.8 17.8 31.8
Edible oils 75.8 137.4 307.3
Other food crops 20.6 28.5 54.8
All staple food products 424.1 797.3 1127.0
Trends in Intra-regional trade in West Africa (US$Mill.)

19. 0
500
1000
1500
2000
2500
3000
2008 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 2025
Thousandmetrictons
CEREALS ROOTS OTHER FOODS ALL FOOD CROPS OTHER CROPS
Projected Increase in Intra-regional Trade Based on Current Trends
With current growth rates in yields, area, population and incomes:
 Regional trade is expected to increase significantly, except for cereals
 Most growth in cereals demand is captured by rice imports from outside

20. 0.0
1.0
2.0
3.0
4.0
Average number of checkpoints per 100 km
0
2000
4000
6000
8000
FrancsCFA
Average bribe taken per 100 km
0
20
40
60
Minutes
Delay per 100 km
Cross-border Trade Obstacles in West Africa

21. 0
5
10
15
20
25
30
35
40
CEREALS ROOTS & TUBERS OTHER FOOD CROPS ALL FOOD CROPS OTHER CROPS
%ofbaselinequantity
10% reduction in trade costs Removal of harassment costs 10% increase in crop yields
Selected Interventions to Further Boost Regional Trade
 Local cereals / roots & tubers gain the most from yield increases and trade reforms
 Removal of cross border trade harassment would have the most effect on trade
 Reduction in overall trade costs is good for both extra and intra-regional trade

22. Thank you!