Abstract
ABSTRACT The recent expansion of trade measures across countries in sub-Saharan Africa provides market opportunities for the agri-food sector. However, price signals and changes across domestic and regional continental markets are a factor in boosting the success and performance of these markets. Examining commodity market adjustments to price shocks is essential for insights to boost trade performance. Using prominent food categories of the agricultural sector in this region, the study examines market dynamics between pulses, exports, and other staple convenience food. Spatial analysis evaluates market inter-dependencies between regional and domestic markets using a vector error correction model. The findings suggest heterogeneous market effects across commodities horizontally and vertically for value-added product forms in the food chain. In domestic intra-regional markets, price transmission is about as high for regional continental markets, while the extent for inter-regional domestic markets varies by the commodity niche on the value chain. Tailored market development policies can better the overall functioning of agri-food markets and boost the convergence of markets as well as trade integration and expansion.
Highlights
The need for continental economic integration and trade expansion has attracted recent interest in sub-Saharan Africa (SSA) and agri-food markets, such as the African Continental Free Trade Area (AfCFTA)
Prominent food categories are examined in this study for market dynamics and possible development policy insights
Spatial market dependencies may exist among markets and affect the formation of complete markets
Summary
The need for continental economic integration and trade expansion has attracted recent interest in sub-Saharan Africa (SSA) and agri-food markets, such as the African Continental Free Trade Area (AfCFTA). Such trade agreement measures substantiate the need for enabling domestic and cross-border policies that can facilitate the implementation needed. Understanding the trade sector in the region might be necessary for guided development and market policy insights towards the market and trade expansion potentials for streamlining border measures and its trade policy reforms. Despite potential to boost productivity and resource allocation across sectors and countries, output in agriculture might face contractions relatively, with declining output by the mid 2030s despite growing faster in the regions of SSA (World Bank, 2020)
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