The commencement of the African Continental Free Trade Area agreement on the 1 January 2021 marked the start of a new era for Agribusiness trade within AfCFTA. Agribusiness trade within AfCFTA was proposed to create jobs, improve competitiveness of the African industries, and promote industrialization and to elevate intra-African trade through agricultural goods. Africa depends on the exports of agricultural goods such as tobacco, spices, coffee, cocoa, coffee and other agricultural goods to earn notable foreign exchange around the world. The AfCFTA will eliminate the import tariffs on 97% of goods that get traded in the African continent, it is also aimed at addressing the non-tariff barriers.
The influence of agribusiness trade within AfCFTA
According to the World Bank, the African Continental Free Trade Area agreement has the potential of uplifting 30 million countries; it will also implement measures that will help alleviate poverty to all poverty stricken communities. Africa’s imports on basic food production is above the percentage of the exports, and its agricultural goods trade is one of the most significant activity in the continent. Agribusiness trade within AfCFTA has created and continues to create employment for approximately 2/3 of the continent’s population, it also contributes 30% to 60% of gross domestic products to each of its countries and 30% of the value is of exports. According to the UN’s trade organization UNCTAD, the average percentage of total agricultural goods trade between African countries was 2% at around the years 2015-2017 when it was compared to intra-regional trade that was among European countries which was 67%, of which Asia was on 61%, and America was on 47%.
The aims of the agreement through agribusiness trade within AfCFTA
AfCFTA aims to bring a total turn around to the intra-African agricultural trade as a percentage of total African agricultural trade that consistently remains below 20%, which is one of the lowest percentages for any region. The AfCFTA agreement will then make agricultural goods trade within the African Continental Free Trade Area flourish as the intra-Africa trade tariffs have been eliminated, which means that agribusiness trade within African Continental Free Trade Area is now flexible, unlike before. Agribusiness trade within AfCFTA donates 15% of Gross Domestic Product (GDP) in Sub-Saharan desert Africa; it also creates employment for more than 50% of the labor force, which comes as an advantage to the less privileged as they will be able to take care of their families.
The mission-agribusiness trade within AfCFTA
The mission behind the agribusiness trade within AfCFTA’s great growth is mostly found in agriculture, through the expansion of all-inclusive territorial value chains around the priority of primary agricultural products, guided by an active and diverse free-enterprise of harvesters, commercial cultivators, agricultural goods processors and other service providers. The African Continental Free Trade Area implementations strengthen national food production that links to territorial markets, which bring forth great support for African countries to uplift regional trade. The plans and initiatives of African Continental Free Trade Area need to put a push in the direction of persuading the free-enterprises into introducing new investments, adding on value to the program, as well as creating more job opportunities and competing with imports.
The promises of African Continental Free Trade Area
The African Continental Free Trade Agreement promises a cycle of ethical market opportunities activating greater chances of more trade and investments between the African countries, which will efficiently add value in all areas of the agricultural business, as well as making it a point that there is growth in productivity. This will lead to much greater job opportunities and improving the abilities, opportunities, and dignities of the less privileged communities, as well as consequently resulting in enlarged markets. Moreover, the markets will eventually work in increasing the Gross Domestic Product. The agribusiness trade within AfCFTA is an advantage to small farmers as they will be able to do work toward being recognized by the African market in order so that they may be able to trade within AfCFTA and abroad.
In sum, the composition of food and agricultural goods’ imports into the African countries is also indicative that South Africa’s scope to export high-value horticulture, meat and wine products is limited. These countries import primarily staple food products, and as such they are the markets that would be worth pursuing for grain farmers. Still non tariff barriers remain a stumbling block, even for grain farmers, as Kenya prohibits importing and growing genetically modified (GM) maize. This is a great hindrance for South Africa, as roughly 80% of maize grown in the country is genetically modified.
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