The Effects of AfCFTA on Food Security Sustainability: An Analysis of the Cereals Trade in the SADC Region

Michael Takudzwa Pasara,Nolutho Diko

doi:10.3390/su12041419

Michael Takudzwa Pasara, Nolutho Diko

Open Access

https://doi.org/10.3390/su12041419

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Journal: Sustainability	Publication Date: Feb 14, 2020
Citations: 15	License type: CC BY 4.0

Affiliation: Walter Sisulu University

Abstract

The signing of the African Continental Free Trade Agreement (AfCFTA) has stimulated a lot of trade potential in Africa that could see the continent significantly improving its intra-trade levels, thereby boosting the economic welfare of Africans. In light of food security sustainability in the Southern African Development Community (SADC) region, this paper employed the World Integrated Trade Solution, Software for Market Analysis and Restrictions on Trade (WITS-SMART) simulation model to assess the potential effects of the AfCFTA on trade in cereals. Cereals have been regarded as the most critical component of food security. The model indicated trading partners for each of the 15 SADC countries, their level of trade creation, trade diversion, consumer surplus, welfare and revenue effects of any regional trade agreement. The results indicated that the AfCFTA will only lead to positive outcomes in four (Angola, the Democratic Republic of Congo, Madagascar and Namibia) of the fifteen SADC countries, with the rest remaining unchanged. In general, previously closed economies, that is, economies which were not part of a free trade agreement (FTA) or a deeper arrangement will stand to gain more than open economies because they are already opened up at the free trade level, which is equivalent to the AfCFTA. Thus, as far as cereals and food security is concerned, the AfCFTA will add minimal value. However, the overall value gains are likely to be greater when all food categories are included in the simulations. In general, the study recommends that African countries should deepen their integration levels to perhaps common markets where production factors, that is, labour and capital, become mobile. This will have multiplier effects in improving continental food security sustainability from a trade perspective.

Highlights

IntroductionThe continent is characterised by rapid growth of both its cities and its population
As is noted in the table below, a majority of trade is conducted by economies which are outside the Southern African Development Community (SADC) region and even the continent itself
The model indicated that in general, SADC countries trade more with other countries outside its region even for the most basic commodities such as cereals, which implies that the region is not self-sustainable

Summary

Introduction

The continent is characterised by rapid growth of both its cities and its population. The continent is grappling with perennial poverty challenges, with an average poverty rate of approximately 41% in sub-Saharan Africa (SSA) [1,2]. 33% of Africans, who represent around 70% of the world’s poorest people, live below the global poverty line [1]. 27 out of 28 off the world’s poorest economies are in SSA, all with an average of 30%. Poverty in Africa has generally decreased, the saddening statistics are that the number of people living in extreme poverty has increased since the 1990s [2]. In addition to poverty challenges, Africa is characterised by inequality challenges, with seven of the 10 most unequal cities in the world being found in Africa. There are significantly large differences between urban and rural areas

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