The African Continental Free Trade Agreement, coupled with the implementation of the EBAFOSA Compliance Standards, offers Africa an opportunity like never before, says Dr Richard Munang.
“Speak softly and carry a big stick, then you will go far.” This amusing African proverb captures what African heads of state and government did on 21 March 2018. With the stroke of a pen, they signed the African Continental Free Trade Area (AfCFTA) deal, which some pundits have characterised as the largest free trade agreement since the World Trade Organization. This signing comes at an opportune moment, given the compounded socioeconomic challenges facing the African continent.
Africa’s reality check
Amidst the pomp and ceremony in Kigali, unanswered questions continue to confront these African heads. They are, after all, leaders on a continent where mothers lose their young children because of the lack of adequate nutritious food and more than 240 million people go to bed hungry every day. It is a continent of low economic productivity – an estimated 2000% lower than that of developed regions – primarily due to the lack of value addition to commodities for which the region holds a comparative advantage. For example, the continent earns a mere 10% of the total extractable value from its agro-value chains due to low value addition. In the cocoa value chain, where the largest producer is in Africa, of the over US$100 billion in revenue made from chocolates alone, Africa receives a dismal 2%. This means that US$98 billion of potential revenue and jobs are lost.
Related to low productivity is unemployment. As much as 12 million young people join the labour market every year to compete for just 3 million jobs – and this number is projected to reach more than 350 million competing for far fewer jobs in less than 17 years from today – a situation that some have described as a ticking time bomb. Our youthful population, which ought to be Africa’s greatest asset, is wallowing in hopelessness and despair. No wonder they risk their lives to migrate to other continents, where they believe their chances of employment to be better.
Another of the tough challenges facing these African leaders is climate change, which is projected to shrink the economies of developing countries (most of which are in Africa) by a massive 75%. This would rob the continent of what little income it currently generates.
Is AfCFTA our machete?
Another African proverb proclaims, “The path does not close for a man with a machete.”AfCFTA, already signed by 44 of the 55 AU countries and targeted to come into force by the end of 2018, has the potential to act as Africa’s machete. It is set to consolidate a 1,2 billion-people-strong market with a combined GDP of more than US$2,3 trillon. Other estimates put this figure at over US$3,4 trillion. It is projected to increase intra-Africa trade (currently at a mere 12%, the lowest of all the continents), by a whopping 52% – taking it to about 70% by 2022. This is an ambitious figure, one that is higher than trade within the EU, currently the highest globally, at 65%.
At a glance, this agreement is set to create much needed demand to drive local manufacturing and industrialisation across the continent on a scale never seen before. Of particular importance is the industrialisation of agriculture, Africa’s strategic development sector prioritised at the highest level by the African Union. Our continent has a rapidly expanding middle class – it currently stands at 300 million people and represents a local market for value-added agro-produce worth US$150 billion annually. Africa’s overall consumer spending is projected to reach US$1,4 trillion by 2020, while business-to-business spending (including in agriculture and its ancillary sectors) is projected to be US$3,5 trillion by 2025. Food markets are projected to be worth US$1 trillion by 2030.
With AfCFTA and the trillion-dollar opportunities it presents, Africa is set to wear the global trade crown. But the million-dollar question is how AfCFTA, and the market opportunities it presents, will translate into food-secure homes, increased economic productivity, wealth and income for the continent’s youth and its citizens in general, and reduced climate vulnerabilities. This is the big question that remains as the festivities of the signing ceremony die down.
The crucial importance of a continental compliance standard
As important as AfCFTA opening up intra-Africa market opportunities is the need for compliance standards. Considering Africa’s disproportionate vulnerability to climate change, we need compliance standards to ensure that the process of producing, marketing and supplying does not compromise the integrity of the very ecosystems that underpin production in the first place. Such a compliance standard would ensure, for example, that attekke(processed cassava from Cote D’Ivoire) can be bought by a customer in a Kenyan supermarket knowing that it is pure, natural, non-chemicalised cassava that will never compromise consumer health. It must meet the highest quality standards and not damage any ecosystems in its production. The emissions emitted in its processing and marketing need to be tightly controlled. The same vigor should apply to the cassava bread from Nigeria that you may find at your local supermarket in South Africa, Uganda, Tanzania, Togo, Sierra Leone, Cameroon – the list goes on.
The need for such compliance standards that cover environmental, health and quality aspects as Africa seeks to sustainably industrialise through its agriculture was endorsed by Africa’s government ministers and policy makers at the 16th African Ministerial Conference on the Environment (AMCEN) in Libreville, Gabon, and was crystalised in the ground-breaking decision known as Investing in Innovative Environmental Solutions.
To this end, UN Environment, working through the Ecosystems Based Adaptation for Food Security Assembly (EBAFOSA), itself a creature of AMCEN, is supporting countries and helping them to adopt the EBAFOSA Compliance Standard. This standard evaluates agro-products along the entire supply chain – from on-farm production, to processing, to distribution and marketing – based on three criteria. The first criterion is Climate and Environment Compliance. This aims to ensure that nature-based approaches that enhance ecosystems are used at the primary production level to ensure ecosystems goods and services, like water, pollinators and healthy soils are protected and enhanced during production. It also aims to ensure that any processing is powered by clean energy, to minimise the risk of escalating emissions. Another aim is to ensure that marketing and supply chain processes are Information Communication Technology (ICT) enabled to reduce the high carbon footprint associated with conventional paper and physical processes.
The second criterion is Health Compliance. This aims to ensure that nature-based approaches and non-chemicalised inputs are used in production.
The third criterion is Quality and Safety Compliance. This covers quality and safety aspects along the entire production process and supply chain.
The domestication of the EBAFOSA Compliance Standard for enforcement by national standards regulators is ongoing in all the EBAFOSA member countries across Africa in the hope of creating an open market for healthy, quality, environmentally friendly agro-produce across the continent. This standard is setting the pace of consolidating the African agro-market for industrialisation to create jobs for our youth, expand the region’s economies, promote the health of our people by ensuring that only quality food ends up on people’s tables – all while mitigating carbon and enhancing ecosystems resilience to keep climate change at bay.
The EBAFOSA Compliance Standards are the instrument that connects the dots so that there is a continuum from production to processing to market and to consumption. From an investment dividend perspective, the EBAFOSA Compliance Standards will be the biggest market incentive to bring to scale nature-based approaches, as well as clean energy uptake and climate action, while ensuring the wellbeing of people and planet.
As the implementation of AfCFTA gathers steam, the EBAFOSA Compliance Standards represent a ready tool to expedite the practical implementation of the deal in a manner that will accelerate Africa’s socioeconomic transformation while protecting the planet for ourselves and for those yet to be born. What more worthy cause can there be?