2022 Africa Agriculture Trade Monitor (AATM)

Abstract

Agricultural trade and global food security have been dramatically affected by a series of events. While the global economy is recovering in 2022 from the COVID-19 pandemic, the Russian invasion of Ukraine has sparked new and challenging problems. In a context where agricultural prices were recovering from a generalized surge throughout the pandemic, the war reversed these trends and opened an new episode of rising food prices, general inflationary pressures, and increased volatility. The combination of these shocks affects agricultural trade and food security throughout Africa, especially in countries highly dependent on food imports. The role of trade in creating resilience in this volatile environment is crucial and has been much discussed. From this perspective, the 2022 Africa Agriculture Trade Monitor (AATM) contributes to our understanding of African agricultural trade and its relationship with food and nutrition security in several important ways. First, it provides a thorough analysis of regional and continental trade in agriculture and selected value chains using accurate statistics developed for this report. This year, it adds an analysis of the nutritional content of African trade and looks closely at the trade in processed products. Second, it examines the potentially transformative impact of the African Continental Free Trade Area (AfCFTA) on the region’s economies. Third, at the regional level, it analyzes the evolution of intra- as well as extra-regional trade flows, and trade policy of one of Africa’s Regional Economic Communities (RECs), namely the Economic Community of Central Africa States (ECCAS). As in prior editions, this fifth AATM provides improved trade statistics and uses consistent indicators to monitor trends in Africa’s participation in global trade as well as the status of intra-African trade. The report highlights three main findings. First, the insertion of African countries in global and regional value chains is low but has recently improved. Indeed, both forward participation in value chains (that is, provision of inputs to other countries’ processing sectors) and backward participation (incorporation of imported intermediates into African traded products) have increased, although forward links have grown faster than backward links. Second, intra-African trade increased significantly prior to the pandemic in most RECs, especially in processed products. Yet, this trend was halted by the COVID-19 shock, especially in ECCAS and the Arab Maghreb Union (AMU). Third, the nutritional content of extra-African trade is concentrated in products with a high value and a low caloric content. In comparison, intra-African flows are more intensive in calories, fat, and protein. The report also examines a number of special topics. One chapter is devoted to modeling the impacts on trade, growth, and welfare of several potential approaches to AfCFTA implementation. The results confirm that there is a high opportunity cost associated with weak AfCFTA implementation, which is why it is crucial to take a more ambitious approach that fully liberalizes tariffs and reduces nontariff measures. The 2022 AATM also conducts a detailed analysis of trends and policy issues in value chains for stimulants (cocoa, coffee, and tea), demonstrating that trade in these sectors is still concentrated in unprocessed products. Finally, the report examines in-depth the patterns of trade integration within ECCAS. One important finding is that intraregional trade is still impeded by many tariffs, nontariff measures, and poor transport infrastructure. AKADEMIYA2063 and the International Food Policy Research Institute (IFPRI) are pleased to present this collaborative report, which provides an insightful review of Africa’s progress in trade development, within and beyond the continent, and new analysis on critical topics for trade in Africa’s agrifood sector.