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 .
Brussels Briefing 47: Ousmane Badiane "Trends in African regional trade"
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
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