brussels briefing 47: ousmane badiane "trends in african regional trade"
TRANSCRIPT
Trends in African Agricultural Trade
Brussels Policy Briefings No. 47Regional Trade in Africa: Drivers, Trends and Opportunities
Ousmane Badiane, Director for Africa
Brussels, February 3, 2017
Trends in African Agricultural Trade
Composition and Direction of African Agricultural Trade
Changing nature of African Agricultural Trade Balance
Competitiveness in Global and Regional Markets
Intra-African Trade: Trends and Outlook – The case of ECOWAS
Outline
Source: African Agricultural Trade Status Report (2017)Unless otherwise specified, graphs are based on data from Base pour le commerce international (BACI), Centre d’Etudes Prospectives et d’Information Internationales (CEPII).
Share of Top 10 Ag. Exports (value) - 1998 Share of Top 10 Ag Exports (value) - 2013
Change in African Trade Composition - EXPORTS
Traditional commodities continue to dominate African Exports Coffee and cotton have lost ground Cocoa remains dominant export Citrus fruits and oilseeds have moved up
Change in African Trade Composition - IMPORTS
Wheat is by far the largest import Rice has gained significant shares and now ranks second Palm oil has made the largest gains; now ranks 4th, closely behind sugar Meat has made its entry recently
Share of Top 10 Ag. Imports (value) - 1998 Share of Top 10 Ag Imports (value) - 2013
Direction of Agricultural Trade by African Countries
Exports Imports
African countries are destination of 20% of African exports 15% of imports originate from other African countries EU is the largest trading partners for both exports and imports Asia is a close second Americas play a more significant role as a source of imports
Direction of Agricultural Trade by African Countries
Exports Imports
EU has been losing market shares rather rapidly Asia has gained shares and is now close to EU African countries are also gaining shares, particular for exports America’s shares have remained unchanged
African Share in Global Agricultural Exports Share of agriculture in Total African exports
Source: Unless otherwise specified, graphs are based on data from Base pour le commerce international (BACI), Centre d’Etudes Prospectdives et d’Information Internationales (CEPII).
Evolution of the Role of Africa in Global Markets and Agriculture in African Exports
Share of Africa in global Agricultural Markets within 3-4% range
Share of agriculture in African Exports fell by 50% in last 15 years
Total agricultural exports, current US$B Normalized Agricultural Trade Balance
African Agricultural Trade Balance
African exports have increased more than 3 times But imports rose nearly 5 times Import gap started to widen in early 2000s Import gap is now around 20% of total value of trade
1996 1998 2000 2002 2004 2006 2008 2010 2012 2014
-80
-60
-40
-20
0
20
40
Africa ECOWAS ECCAS COMESA SADC
Regional Dimension of Trade Imbalance
ECCAS has experienced rapid deterioration Same with SADC which moved form net exporter to net importer ECOWAS has the lowest gap, but also turned net importer All regions have lost their next exporting position around 10 years ago
Main Commodities Contributing to Agricultural Imports Gap
sugar maize wheat
rice palm oil wheat
wheat milk cream
Wheat is a major import from all regions It is followed by milk products in Europe Rice & Palm oil are the main net imports from Asia Sugar and maize from Americas
• Agricultural production collapsed in the 1970s-1980s
• But population continued to grow
• Unmet demand continued to pile up
• Rising incomes in post 2000s accelerate demand
• Agriculture grows again but rates cannot keep up with demand
Why the Growing Trade Gap Despite Rising African Production and Exports
Source: Badiane et al (2016).
COMESA ECCAS ECOWAS SADC Africa0.95
0.98
1.01
1.04
1.07
1.10
Ave
rage
com
petit
iven
ess
chan
ge
COMESA ECCAS ECOWAS SADC Africa0.92
0.94
0.96
0.98
1.00
1.02
1.04
1.06
1.08
1.10
Ave
rage
com
petit
iven
ess
chan
ge
Global markets Regional Markets
Average Change in Export Competitiveness: 1998-2013
Africa lost competitiveness in global markets but gained in regional markets ECOWAS increased competitiveness the most in global markets COMESA gained competitiveness the most in regional markets
Value > 1 means increase in competitiveness
0.7
0.8
0.9
1.0
1.1
1.2
1.3
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ator
ial G
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Cap
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Cha
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ompe
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sCountry Competitiveness in Global Markets: 1998-2013
Around 40 percent of all countries have become more competitive About 50% have seen no major changes 10 percent have become less competitive
Value > 1 means increase in competitiveness
0.90
0.95
1.00
1.05
1.10
1.15
1.20
1.25
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ides
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ums
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aper
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Coc
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Whe
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ve tr
ees
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lant
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ther
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ble
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tabl
esO
ther
live
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ther
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& fa
cts
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ool
Pre
ps. o
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, flo
ur, s
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She
ep &
goa
tsA
nim
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oots
& tu
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Dai
ry, e
ggs
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oney
Silk
Cat
tleS
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ye, b
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s
Cha
nge
in c
ompe
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enes
s
Value > 1 means increase in competitiveness
Commodity Competitiveness in Global Markets: 1998-2013
Competitiveness increased for 75% of export commodities Little change / modest loss of competitiveness for 25% of commodities
Land productivity Public ag. expenditure to ag. GDP ration of exporter Efficiency of customs clearing index Quality of port Exporting countries’ GDP Importing countries’ GDP Road density
Key Determinants of Trade Performance
Evolution of Intra-African Trade
The share of intra-African trade has increased sharply since 2000 But the level is still a fraction of what is observed in other regions
Africa ECOWAS ECCAS COMESA SADC0%
5%
10%
15%
20%
25%
30%
1998-2006 2007-2013 Overall
Growth in Intra-regional Trade (Value)
Intra-trade has grown by an average of between 10 and 15% Growth has accelerated over time for ECOWAS and SADC It has fallen drastically in ECCAS
2001-2005 2006-2010 2011-2013
Live animals 87.7 155.6 95.7
Fish & animal products 165.7 348.4 439.2
Vegetables 27.3 28.1 133.7
Cereals 30.1 81.5 64.5
Oilseeds 16.8 17.8 31.8
Edible oils 75.8 137.4 307.3
Other food crops 20.6 28.5 54.8
All staple food products 424.1 797.3 1127.0
Trends in Intra-regional trade in West Africa (US$Mill.)
2008 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 20250
500
1000
1500
2000
2500
3000
CEREALS ROOTS OTHER FOODS ALL FOOD CROPS OTHER CROPS
Thou
sand
met
ric t
ons
Projected Increase in Intra-regional Trade Based on Current Trends
With current growth rates in yields, area, population and incomes:
Regional trade is expected to increase significantly, except for cereals Most growth in cereals demand is captured by rice imports from outside
Abidjan Bamako‐Abidjan-Ouagadougou
Bamako-Dakar
Bamako-OuagadougouOuagadougou-Lomé
Ouagadougou-Tema0.01.02.03.04.0
Average number of checkpoints per 100 km
Abidjan Bamako‐Abidjan-Ouagadougou
Bamako-Dakar
Bamako-OuagadougouOuagadougou-Lomé
Ouagadougou-Tema0
2000400060008000
Average bribe taken per 100 km
Fran
cs C
FA
Abidjan Bamako‐Abidjan-Ouagadougou
Bamako-Dakar
Bamako-OuagadougouOuagadougou-Lomé
Ouagadougou-Tema0
20
40
60
Delay per 100 km
Min
utes
Cross-border Trade Obstacles in West Africa
Cereals Roots & tubers Other food crops All food crops Other crops0
5
10
15
20
25
30
35
4010% reduction in trade costs Removal of harassment costs 10% increase in crop yields
% o
f bas
elin
e qu
antit
ySelected Interventions to Further Boost Regional Trade
Local cereals / roots & tubers gain the most from yield increases and trade reforms Removal of cross border trade harassment would have the most effect on trade Reduction in overall trade costs is good for both extra and intra-regional trade
Thank you!