Abstract
The problems of African agricultural development have been at the forefront of the debate on Africa’s development since the Lagos Plan of Action in 1963. During the 2004 AU meeting in Sirte, Libya and subsequently in the 2006 AU/NEPAD Summit on Food Security in Africa, concrete steps have been taken to work towards Common African Market on 12 selected strategic agricultural products. Eight regional trade agreements which are to form the building blocks of the African Economic Community are engaged in trade liberalization and regional integration process on the selected strategic agricultural products with the ultimate goal being the formation of Common Markets for Agricultural products. However, the recent proliferation of regional trade agreements (RTAs) has intensified the debate on their merits especially the merits of south-south trade agreements. This study contributes to this debate by analysing trade creation and trade diversion effects of African RTAs on trade in nine of the twelve strategic agricultural products. An extended gravity model is estimated. We address econometrically the endogeneity of RTAs using a panel approach. Results indicate that African RTAs have mixed effect on trade creation and trade diversion. Net trade creation is positive in three of the eight RTA and it is negative in two. Although a lot remains to be done, RTAs in Africa are an attractive means to speed up the move towards common market for agricultural products in the continent. This will have positive implication for food security and sustainable agricultural development in the continent.
Highlights
Food security is recognised as being one of the major development challenges facing the African continent
Eight regional trade agreements which are to form the building blocks of the African Economic Community are engaged in trade liberalization and regional integration process on the selected strategic agricultural products with the ultimate goal being the formation of Common Markets for Agricultural products
It is increasingly being recognised that African food and agricultural markets are extremely fragmented along sub-region, national and even sub-national levels, resulting in segmented markets of sub-optimal size which hinder the profitability of sizeable private investment in the different stages of the commodity chain
Summary
Food security is recognised as being one of the major development challenges facing the African continent. It is increasingly being recognised that African food and agricultural markets are extremely fragmented along sub-region, national and even sub-national levels, resulting in segmented markets of sub-optimal size which hinder the profitability of sizeable private investment in the different stages of the commodity chain. These segmented gaps between regional/national production and regional demand are increasingly being filled by imports of non-African origin [in some cases through the use of unfair trade practices], even in case where tradable surpluses exists [2]
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