Anatole Goundan, Leysa M. Sall, Julia Collins, and Joseph W. Glauber Intra-African Agricultural Trade THREECHAPTER 46 Africa Agriculture Trade Monitor / 2022 Report Chapter Three Intra-African Agricultural Trade INTRODUCTION Economic integration has been a key goal on the agenda of African governments for several decades. The road to African integration began in 1991, when the African heads of state and government signed the Treaty Establishing the African Economic Community (Abuja Treaty), setting out the guiding principles and objectives to strengthen integration. In 2014, the Malabo Declaration made tripling intra-African trade in agricultural products and services by 2025 a central objective. More recently, in 2018, the agreement to form the African Continental Free Trade Area (AfCFTA) was signed at the 10th Extraordinary Session of the African Union in Kigali. The AfCFTA, launched on January 1, 2021, is the largest free trade area in the world in terms of the number of countries covered, with a market of 1.2 billion consumers. It has great potential to boost intra-African trade by eliminating import duties and reducing nontariff barriers (UNC- TAD 2019), but maximizing the agreement’s positive impacts will require significant efforts to both liberalize and facilitate trade (Laborde 2020; Maliszewska 2020).1 Previous AATM reports show that agricultural trade within Africa is still struggling to recover from a sharp decline suffered from 2013 through 2016 (Goundan and Tadesse 2021). The 2021 Comprehensive Africa Agriculture Development Programme (CAADP) Biennial Review report found that Africa is not on-track to achieve the tripling of intra-African trade between 2015 and 2025: the score in 2021 is estimated at 2.44 against a target of 5.0 (African Union 2022). In addition, growth in the intra-African export shares of processed products compared with unprocessed products suggests that African markets are more attractive for processed products than primary products, and the gap between the two has been expanding. In 2019, intra- African trade accounted for 22.9 percent of total African exports of semi-processed agricultural products, while the corresponding share for fully processed products was estimated at 52.9 percent; the intra-African share of unprocessed agricultural exports was significantly lower at less than 10 percent (Goundan and Tadesse 2021). In this chapter, we look at intra-African agricultural trade at a disaggregated level, with a focus on trade in processed food products. To enrich our discussion, we examine the nutritional content of these traded goods as well as trade barriers they face. We include detailed analyses of trade in five major processed products and provide a comparative analysis with other benchmark regions such as the Asia-Pacific and Latin America and Caribbean (LAC) regions2 to better identify gaps and opportunities for African trade. The analysis in this chapter is based on recorded trade data only, and therefore does not account for unrecorded or informal trade. This is an important limitation, as informal trade is thought to constitute a large share of intra-African trade, particularly trade in agricultural products. Observational studies on informal cross-border trade in several countries and regions summarized in Bouët, Cissé, and Traoré (2020) suggest that informal trade may account for 10 to 60 percent of total trade flows. Another recent study estimated that the magnitude of informal cross-border trade reaches 7 to 16 percent of formal trade at the continental level, and 30 to 72 percent of formal trade between countries that share a border (Gaarder, Luke, and Sommer 2021). Thus, intra-African trade flows discussed in this chapter should be assumed to be underestimated compared to actual trade flows, especially for neighboring countries. Significant efforts will be required to formalize and mainstream informal trade flows by lowering financial and logistical barriers to formal trade. In addition to trade facilitation measures, it is important to invest in data collection efforts to better understand the magnitude of informal flows and provide a more complete picture of intra-African trade. 1 For a detailed analysis of the potential impacts of AfCFTA implementation, see Chapter 5 in this volume. 2 These regions are used as comparators because, like Africa, their agricultural GDP shares are higher than the global average and their levels of GDP per capita are lower. 47Africa Agriculture Trade Monitor / 2022 Report Ch ap te r Th re e Chapter Three Intra-African Agricultural Trade The next section of this chapter provides an overview of intra-African trade in agricultural goods by stage of processing, followed by an overview of the nutritional content of intra-African trade. We then provide country-level and product-level analyses of intra-African trade and explore trends in trade of processed agricultural products by focusing on trade performance and networks in sugar, palm oil, cigars and cigarettes, tea, and wheat flour. The following section analyzes barriers to intraregional trade in these five processed products, and the final section concludes. TRENDS AND PATTERNS OF INTRA-AFRICAN AGRICULTURAL TRADE BY STAGE OF PROCESSING The analysis of the intra-African trade of agricultural products in the previous editions of this report have shown the importance of processed agricultural products in contributing to trade among African countries. This edition, in addition to commenting on the change in overall intra-African trade observed in 2020 (the latest year for which data are available) compared to previous years, takes an in-depth look at processed agricultural products traded between African countries.3 In this section, we provide an overview of trends in intra-African agricultural trade at the continental and regional economic community (REC) levels, measured in terms of value. The subsequent sections focus on trade measured in terms of nutritional content and on trade trends and performance at the country and product level. Trends in intra-African agricultural trade by regional economic community Figure 3.1 shows the trends of total intra-African exports of agricultural products.4 Two aspects are of interest: (1) the role of different RECs in the intracontinental trade of agricultural products, and (2) how trade flows changed between 2019 and 2020, since from March 2020 onward the COVID-19 pandemic emerged as a serious health crisis and sparked various policy interventions that affected trade worldwide. Figure 3.1 Trends of intra-African agricultural trade by REC, 2003–2020 0 2 000 4 000 6 000 8 000 10 000 12 000 14 000 16 000 18 000 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 US $ m illi on s Africa COMESA EAC ECCAS ECOWAS SADC AMU Source: Constructed from the 2022 AATM database. Note: COMESA = Common Market for Eastern and Southern Africa; EAC = East African Community; ECCAS = Economic Community of Central African States; ECOWAS = Economic Community of West African States; SADC = Southern African Development Community; AMU = Arab Maghreb Union. 3 It should be noted that export data from UN Comtrade include countries’ re-exports of foreign goods. Therefore, it is important to clarify whether the trends in processed goods within Africa are driven by foreign goods or domestic goods. Even though findings may vary from one group of products to another, Comtrade data show that re-exports of agricultural products between African countries account for less than 2 percent on average. Consequently, it is like- ly that most intra-African processed exports were processed on the continent. 4 We use the World Trade Organization (WTO) definition of agricultural products, with the addition of fishery products. The full list of agricultural products and fishery products is available in Pene and Zhu (2021). 48 Africa Agriculture Trade Monitor / 2022 Report Chapter Three Intra-African Agricultural Trade In terms of the contribution of RECs to the continental trade in agricultural products, the Southern African Development Community (SADC) and Common Market for Eastern and Southern Africa (COMESA) countries have played increasing roles over time, with more than 50 percent of total intra-African trade originating from SADC countries (Figure 3.2). In fact, South Africa alone contributed about 62 percent of total SADC exports to African countries in 2020. The export share of this REC has, however, decreased over time from 58 percent in 2003–2005 to 54 percent in 2018–2020. The contribution of COMESA countries has increased, from 32 percent of this trade in 2003–2005 to 41 percent in the more recent period. It is worth noting that there is substantial overlap between these two RECs — nine countries belong to both COMESA and SADC. The Economic Community of West African States (ECOWAS) and the East African Community (EAC) countries each account for less than 20 percent of intra-African exports of agricultural products, while the Arab Maghreb Union (AMU) countries represent only about 5 percent, and the Economic Community of Central African States (ECCAS) countries less than 3 percent. Figure 3.2 Average share of RECs in the intra-African total exports of agricultural products 32.0 9.2 2.8 19.2 58.5 5.3 41.1 16.1 1.7 15.0 54.3 4.9 0 10 20 30 40 50 60 70 COMESA EAC ECCAS ECOWAS SADC AMU Ex po rt sh ar e ( % ) 2003 – 2005 2018 – 2020 Source: Constructed from the 2022 AATM database. Note: Trade shares of the RECs sum to over 100 percent due to overlapping country membership. COMESA = Common Market for Eastern and Southern Africa; EAC = East African Community; ECCAS = Economic Community of Central African States; ECOWAS = Economic Community of West African States; SADC = Southern African Development Community; AMU = Arab Maghreb Union. Between 2019 and 2020, overall intra-African trade of agricultural products decreased by 3.5 percent, likely because of the COVID-19 pandemic (Figure 3.3). Except for EAC, the trade contraction is observed for all RECs covered here. Trade by COMESA countries decreased just 0.3 percent, while the participation of ECCAS countries dropped by almost 63 percent. The participation of ECOWAS and AMU countries was also seriously affected. It is clear that the COVID-19 crisis has had a negative impact on intra-African trade of agricultural products. Since a large share of intra-African trade is informal, various COVID-related measures like border closures are likely to have caused more severe limitations for informal trade flows across countries, which are not captured in this analysis (Bouët, Laborde, and Seck 2021; FAO 2021). 49Africa Agriculture Trade Monitor / 2022 Report Ch ap te r Th re e Chapter Three Intra-African Agricultural Trade Figure 3.3 Changes in intra-African exports of agricultural products during the COVID-19 crisis (2019–2020) -3.5 -0.3 16.7 -62.6 -22.0 -4.7 -34.8 -70 -60 -50 -40 -30 -20 -10 0 10 20 30 Africa COMESA EAC ECCAS ECOWAS SADC AMU Ch an ge in ex po rts (% ) Source: Constructed from the 2022 AATM database. Note: COMESA = Common Market for Eastern and Southern Africa; EAC = East African Community; ECCAS = Economic Community of Central African States; ECOWAS = Economic Community of West African States; SADC = Southern African Development Community; AMU = Arab Maghreb Union. EAC countries, unlike other RECs under consideration, increased their overall exports to Africa by 16 percent in 2020 compared to 2019. Looking at country-specific exports to African coun- tries, we found that, except for Rwanda, where exports decreased by 90 percent, other EAC countries showed higher participation in intra-African trade. Figure 3.4 shows that exports from Uganda increased by around 160 percent between 2019 and 2020, growing from US$270 million in 2019 to $706 million in 2020. The overall export growth observed at the EAC level is mainly due to the great performance by Uganda and Tanzania. Trade rebounded across Africa in the second half of 2020 following the initial steep declines in the early months of the pandemic (Torero 2021). It is possible that EAC’s relatively strong trade facilitation measures as well as concerted efforts to overcome pandemic-related logistical bar- riers helped that region recover faster than others. Notably, EAC scored the highest of all RECs on the 2021 CAADP Biennial Review sub-theme on Intra-African Trade Policies and Institutional Conditions, which measures the enabling environment for trade (AUC 2022). A common EAC COVID-19 test certificate developed for truck-drivers helped to speed clearance and reduce border-crossing times, and EAC’s electronic cargo-tracking system and simplified trade regime also helped to facilitate trade during the pandemic (UNECA 2020). 50 Africa Agriculture Trade Monitor / 2022 Report Chapter Three Intra-African Agricultural Trade Figure 3.4 EAC countries’ intra-African exports during the COVID-19 crisis, 2019–2020 0 100 200 300 400 500 600 700 800 900 1,000 Burundi Kenya Rwanda South Sudan Tanzania Uganda Ex po rt va lu e ( US $ m illi on s) 2019 2020 Source: Constructed from the 2022 AATM database. Role of processed products in intra-African agricultural trade Here, we analyze the contribution of processed agricultural products in the intra-African trade of different RECs.5 The first indicator we consider is the share of processed agricultural products in the RECs’ total exports of agricultural products to Africa (Figure 3.5) for two subperiods (2003– 2005 and 2018–2020). In the first period, 41 percent of intra-African exports of agricultural products were processed products, and the share of processed products for ECCAS, SADC, and AMU counties was above the continental average, while for COMESA, EAC, and ECOWAS the share of processed products was below the continental average. More recently, in 2018– 2020, 46 percent of intra-African agricultural exports were processed products. The share of processed agricultural products has increased for EAC and ECOWAS countries but decreased for ECCAS and AMU countries. In the 2018–2020 period, the RECs with the highest share of processed agricultural products in their exports to Africa were ECOWAS (60 percent) and AMU (61 percent). For ECOWAS, the increase in its average share of processed agricultural products was quite large between the two time periods (+25 percentage points). The largest decrease in the average share of processed products in intracontinental trade was seen for ECCAS countries (−18 percentage points), followed by the AMU countries (−9 percentage points). The important role of processed products in intracontinental trade may be explained by the fact that agro-industries in most African countries are specialized in products adapted to regional demand and by the possibility that African food industries are less competitive outside Africa (Iapadre and Luchetti 2010; Bouët, Cosnard, and Laborde 2017). 5 Bouët and Sall (2021) categorized agricultural products at the HS6 level as unprocessed, semi-processed, and processed commodities, based on a careful reading of the HS6 labels; 276 were classified as unprocessed, 236 as semi-processed, and 227 as processed agricultural products. 51Africa Agriculture Trade Monitor / 2022 Report Ch ap te r Th re e Chapter Three Intra-African Agricultural Trade Figure 3.5 Composition of RECs’ agricultural exports to Africa by processing stages 37 28 38 27 26 29 26 24 58 23 32 29 10 32 22 26 31 36 46 35 21 41 7 17 25 27 19 6 41 46 30 37 28 35 53 35 35 60 43 44 70 62 0 10 20 30 40 50 60 70 80 90 100 20 03 –2 00 5 20 18 –2 02 0 20 03 –2 00 5 20 18 –2 02 0 20 03 –2 00 5 20 18 –2 02 0 20 03 –2 00 5 20 18 –2 02 0 20 03 –2 00 5 20 18 –2 02 0 20 03 –2 00 5 20 18 –2 02 0 20 03 –2 00 5 20 18 –2 02 0 Africa COMESA EAC ECCAS ECOWAS SADC AMU Pe rc en t Unprocessed Semi-processed Processed Source: Constructed from the 2022 AATM database. Note: COMESA = Common Market for Eastern and Southern Africa; EAC = East African Community; ECCAS = Economic Community of Central African States; ECOWAS = Economic Community of West African States; SADC = Southern African Development Community; AMU = Arab Maghreb Union. The second factor of interest here is the importance of each REC in the overall intra-African trade of processed agricultural products. Before moving to the findings, it is worth noting that most RECs, except ECCAS, saw an increase of their intra-African exports of processed agricultural products over the second period (2018–2020) from the first period (2003–2005). Compared to the total intra-African exports of processed agricultural exports (146 percent increase), ECCAS (−11 percent), AMU (+79 percent), and SADC (+108 percent) performed below the continental average, while ECOWAS (+194 percent), COMESA (+243 percent), and EAC (+393 percent) were the top performers. Figure 3.6 shows the participation of each REC in the total intracontinental trade of processed agricultural products (total exports of REC divided by the total intra-African exports of processed agricultural products). We can see that SADC, especially South Africa, is the leading REC in the intra-African trade of processed agricultural products. However, SADC’s lead has diminished — its share dropped from 62 percent to 52 percent between the two periods. The decline in SADC’s share reflects the more rapid increase in total intra-African trade over time, from 108 percent to 146 percent. For this REC, the most positive absolute export gains were observed for cane or beet sugar (HS4 code 1701) and food preparations not elsewhere specified (code 2106), with a net gain of more than US$100 million. Three RECs have increased their participation in intra-African trade of processed agricultural products (COMESA, EAC, and ECOWAS). On average, COMESA countries have increased their contribution to processed agricultural products trade by 9 percentage points, while there is an increase of 6 percentage points for EAC countries and 3 percentage points for ECOWAS countries. Several products explain the performance of these RECs over time. For ECOWAS, exports of three products increased between the two periods by more than US$100 million: palm oil and its fractions (code 1511), soups and broths and preparations therefor (code 2104), and cigars, cheroots, cigarillos, and cigarettes (code 2402). For COMESA, cane or beet sugar (code 1701), cigars, cheroots, cigarillos, and cigarettes (code 2402), and manufactured tobacco and manufactured tobacco substitutes n.e.c (code 2403) recorded net export gains, respectively, of $209 million, $91 million, and $90 million. For EAC countries, the highest net export gains were observed for cigars, cheroots, cigarillos, and cigarettes (code 2402), food 52 Africa Agriculture Trade Monitor / 2022 Report Chapter Three Intra-African Agricultural Trade preparations not elsewhere specified or included (code 2106), and cane or beet sugar (code 1701) with respective gains of $94 million, $53 million, and $51 million. Figure 3.6 Participation of RECs in total intra-African exports of processed agricultural products 23.5 6.1 3.6 16.4 61.9 9.0 32.9 12.4 1.3 19.5 51.9 6.5 0 10 20 30 40 50 60 70 COMESA EAC ECCAS ECOWAS SADC AMU Pe rc en t 2003–2005 2018–2020 Source: Constructed from the 2022 AATM database. Note: Trade shares of RECs sum to over 100 percent due to overlapping country membership. COMESA = Common Market for Eastern and Southern Africa; EAC = East African Community; ECCAS = Economic Community of Central African States; ECOWAS = Economic Community of West African States; SADC = Southern African Development Community; AMU = Arab Maghreb Union. Trade within and between RECs by level of processing It is interesting to study the composition of intra- and extra-REC trade by level of processing. Figure 3.7 shows the dynamics of intra-REC trade by level of processing over our two sub- periods (2003–2005 and 2018–2020); Figure 3.8 shows the same information for REC trade with African countries outside the REC. For most of the RECs, the composition of trade changed significantly for both intra- and extra-REC trade. Figure 3.7 Composition of intra-REC agricultural trade by processing stages 37 28 40 29 25 35 4 17 54 17 32 27 11 41 22 26 30 33 53 28 8 31 5 13 24 27 18 5 41 46 30 38 22 37 87 52 40 69 44 46 71 55 0 10 20 30 40 50 60 70 80 90 100 20 03 –2 00 5 20 18 –2 02 0 20 03 –2 00 5 20 18 –2 02 0 20 03 –2 00 5 20 18 –2 02 0 20 03 –2 00 5 20 18 –2 02 0 20 03 –2 00 5 20 18 –2 02 0 20 03 –2 00 5 20 18 –2 02 0 20 03 –2 00 5 20 18 –2 02 0 Africa COMESA EAC ECCAS ECOWAS SADC AMU Pe rc en t Unprocessed Semi-processed Processed Source: Constructed from the 2022 AATM database. Note: Trade shares of RECs sum to over 100 percent due to overlapping country membership. COMESA = Common Market for Eastern and Southern Africa; EAC = East African Community; ECCAS = Economic Community of Central African States; ECOWAS = Economic Community of West African States; SADC = Southern African Development Community; AMU = Arab Maghreb Union. 53Africa Agriculture Trade Monitor / 2022 Report Ch ap te r Th re e Chapter Three Intra-African Agricultural Trade In 2003–2005, almost 90 percent of intra-ECCAS agricultural trade was in processed products. However, in the more recent period, the share of processed products has fallen to only 52 percent. In terms of ECCAS countries’ extra-REC trade, the first period was dominated by raw products (52 percent), but these fell to 29 percent in the second period, with semi-processed agricultural products playing the largest role (49 percent). Among ECOWAS countries, raw products, which constituted the largest part of their trade over the first period (54 percent), were replaced by processed products (69 percent) during the second period. However, ECOWAS continued to export raw agricultural products to other African counties, with a very small share of processed products. For the Maghreb countries, the share of processed products traded within AMU decreased considerably, while exports of raw products have become more significant in the second period. For COMESA, EAC, and SADC, the composition of their intra- and extra-REC trade of agricultural products remained stable in terms of the levels of product processing. Figure 3.8 Composition of extra-REC agricultural trade by processing stages 34 24 27 22 52 29 74 49 32 37 8 19 35 41 41 45 37 49 14 32 30 30 23 9 31 36 32 33 11 22 12 19 39 34 69 72 0 10 20 30 40 50 60 70 80 90 100 20 03 –2 00 5 20 18 –2 02 0 20 03 –2 00 5 20 18 –2 02 0 20 03 –2 00 5 20 18 –2 02 0 20 03 –2 00 5 20 18 –2 02 0 20 03 –2 00 5 20 18 –2 02 0 20 03 –2 00 5 20 18 –2 02 0 COMESA EAC ECCAS ECOWAS SADC AMU Pe rc en t Unprocessed Semi-processed Processed Source: Constructed from the 2022 AATM database. Note: Trade shares of RECs sum to over 100 percent due to overlapping country membership. COMESA = Common Market for Eastern and Southern Africa; EAC = East African Community; ECCAS = Economic Community of Central African States; ECOWAS = Economic Community of West African States; SADC = Southern African Development Community; AMU = Arab Maghreb Union. This analysis of intra-REC and extra-REC exports reveals that (1) within RECs, the greatest share of trade consists of processed agricultural products; and (2) for most RECs, unprocessed or semi-processed agricultural products account for most extra-REC exports of agricultural prod- ucts. These findings raise questions about the competitiveness of African countries beyond their regional communities. The only REC with a substantial share of processed agricultural products in its extra-REC intra-African exports is AMU. The overall low level of sophistication of Africa’s manufacturing sector likely explains the low content of processed agricultural products in extra-regional trade within Africa (Iapadre and Luchetti 2010). 54 Africa Agriculture Trade Monitor / 2022 Report Chapter Three Intra-African Agricultural Trade NUTRITIONAL CONTENT OF INTRA-AFRICAN TRADE In this section, we complement the previous analysis of trade in terms of value by examining trade patterns in terms of nutritional content, including caloric, fat, and protein content of traded goods. Trade patterns in nutritional terms may echo or contrast with patterns in value terms, depending on changes in commodity prices and trade composition. From a food security perspective, looking at trends in calorie terms offers a clearer picture of the contribution of intra-African trade to food availability in the continent. In addition, changes in the composition of trade, including the increasing share of processed products in intra-African trade, are likely to have implications for nutrition. Our methodology draws on research by Laborde and Deason (2015) that converts trade data at the HS6 product level to its nutritional content using published nutrition tables from the United States Department of Agriculture and nutrient content data from the Food and Agriculture Organization of the United Nations (FAO), as well as other sources. The nutrient contents of the trade are then converted to calories (kcal), grams of protein, and grams of fat. A detailed explanation of the coefficients can be found in Laborde and Deason (2015). Trends in nutritional content of intra-African trade Figure 3.9 shows the growth in intra-African agricultural trade by nutrient content from 2003 to 2020. Intra-African agricultural trade expressed in calories and fat and protein content by weight grew at similar rates over the period. Total calories traded in 2018–2020 was 92 percent more than in the 2003–2005 period, with an implied annual growth rate of 4.4 percent. The fat content of average intra-African trade in the second period was 106 percent higher than in the first period, showing an annual growth rate of 4.9 percent, and protein content was 95 percent higher, with an annual growth rate of 4.6 percent. Unlike the value of intra-African trade (see Figure 3.1), the nutritional content of intra-African trade continued an upward trend through- out the 2003–2020 period. This suggests that despite the 2013 economic downturn, growth in the nutritional content of intra-African trade remained unaffected. Figure 3.9 Evolution of intra-African trade by nutritional content, 2003–2020 - 100 200 300 400 500 600 0 5 10 15 20 25 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Tri llio n kc al Mi llio n m et ric to ns Fats (left axis) Proteins (left axis)) Kcal (right axis) Source: Constructed from the 2022 AATM database. Figure 3.10 compares intra-African agricultural trade as a share of total African agricultural trade in the periods 2003–2005 and 2018–2020 by both value and nutritional content. In value 55Africa Agriculture Trade Monitor / 2022 Report Ch ap te r Th re e Chapter Three Intra-African Agricultural Trade terms, intra-African trade accounted for about 21 percent of African agricultural exports in the second period, compared with 22 percent in the first period. When expressed in terms of calo- ries, fats, and proteins, intra-African trade accounts for a larger share of Africa’s total agricultur- al trade. This reflects the fact that higher-value products with lower caloric content are typically exported outside of Africa (for example, coffee, cotton, tea, and cut flowers). While the share of total agricultural trade accounted for by intra-African trade expressed in caloric content was similar between the two periods, the share of intra-African trade expressed in terms of fat and protein content fell over this time. Figure 3.10 Intra-African agricultural trade as share of total African agricultural trade 22 40 32 46 21 39 28 37 0 5 10 15 20 25 30 35 40 45 50 Value Calories Fats Proteins Pe rc en t 2003 – 2005 2018 – 2020 Source: Constructed from the 2022 AATM database. Trade in nutritional content at the regional and REC levels Figure 3.11 shows intra-African agricultural trade in 2020 among Africa’s geographic regions, expressed in billion kilocalories. Each region is represented by a portion of the circle propor- tional to its share in intra-African exports. Arcs depicting trade flows are drawn between each region, with the size of the arc indicating the magnitude of the flow and its color corresponding to the exporting region. Flows that originate from and return to a single region represent trade within the region (regional aggregations are drawn from FAO). The numbers on the outside of the circle correspond to the magnitude of the trade flow in billion kilocalories. For example, the green arc between Southern and Eastern Africa represents exports from Southern to Eastern Africa, which amounted to around 101 trillion kcal. The green flow originating from and return- ing to Southern Africa represents exports from Southern African countries to others within the region, which totaled 102 trillion kcal. In 2020, total intra-African trade totaled 530 trillion kcal. Southern Africa was the largest exporting region, accounting for 41 percent of the total exports in calories (Table 3.1). Eastern Africa is the second-largest exporting region on a calorie basis, accounting for 29.9 percent of total intra-African agricultural exports. In terms of imports, East- ern Africa is the largest importer of agricultural goods from other African countries, accounting for 46 percent of total calories. 56 Africa Agriculture Trade Monitor / 2022 Report Chapter Three Intra-African Agricultural Trade Figure 3.11 Intra-African exports by region, 2020 (billion kcal) Source: Constructed from the 2022 AATM database. Note: Regions are represented by portions of the circle corresponding to their share in intra-African agricultural exports. Arcs represent trade flows between and within regions, with the width of the arc corresponding to the magnitude of the flow and its color corresponding to the exporting region. The numbers around the circle indicate the magnitudes of trade flows in billion kilocalories. Table 3.1 Share of intra-African trade in calories by region, 2020 (percent) Importing region Exporting region Western Southern Northern Central Eastern Total Western 13.0 0.6 3.3 0.1 <0.0 17.0 Southern 0.1 19.7 0.1 <0.0 2.9 22.8 Northern 0.9 0.1 5.0 1.0 0.6 7.6 Central 0.2 1.1 0.4 0.2 4.2 6.1 Eastern <0.0 19.5 4.4 0.1 22.2 46.2 Total 14.2 41.0 13.2 1.4 29.9 99.7 Source: Constructed from the 2022 AATM database. Note: Totals do not sum to 100 due to rounding. Western Africa accounts for 14.2 percent of total intra-African trade in calories, but of that total, over 90 percent is accounted for by exports to other Western African countries. Likewise, this region accounts for about 17 percent of total African agricultural imports of calories from other African countries, but over 76 percent of those imports originated from other Western African countries (Figure 3.12). The Central African region accounts for the smallest share of intra-African trade in calories, with just 1.4 percent of total intra-African exports and 6.1 percent of imports. 57Africa Agriculture Trade Monitor / 2022 Report Ch ap te r Th re e Chapter Three Intra-African Agricultural Trade Figure 3.12 Share of intra-African agricultural trade (in calories) destined for, or originating from, outside of the region, 2020 24 14 34 97 52 8 52 62 86 26 0 20 40 60 80 100 Western Southern Northern Central Eastern Percent Exports Imports Source: Constructed from the 2022 AATM database. Figure 3.13 considers the portion of intra-African trade exported outside of selected RECs in terms of nutrition content. About 59 percent of the intra-African exports (expressed in calories) from SADC members went to African countries outside of SADC in 2018–2020 (Figure 3.13a). Of total ECOWAS exports of calories to African partners, only about 10 percent went to countries outside of ECOWAS during the same period. These figures support the regional trade flow data presented in Figure 3.11, confirming the relatively low level of regional trade with ECOWAS as well as the importance of SADC as an important supplier of calories (largely grains) for African countries outside of SADC. For EAC countries, extra-REC exports declined in terms of calories, from 50 percent of their total intra-African exports in 2003–2005 to 15 percent in 2018–2020. In contrast, ECCAS members saw a significant increase in extra-REC exports as a share of intra-African trade, in calories, over the past five years, up from 35 percent in the 2013–2015 period to 59 percent in the 2018– 2021 period. In part, this reflects increased grain exports from Rwanda and Burundi (which are members of both EAC and COMESA). Exports expressed in terms of fat content (Figure 3.13b) and protein content (Figure 3.13c) largely mirror the results for calories. However, ECOWAS exports of protein to non-ECOWAS African countries account for a larger share (25 percent of total ECOWAS intra-African trade) during the 2018–2020 period than either calories (10 percent) or fats (5 percent) during the same period. This reflects the relative importance of livestock product exports from ECOWAS partners to non-ECOWAS African countries. 58 Africa Agriculture Trade Monitor / 2022 Report Chapter Three Intra-African Agricultural Trade Figure 3.13 Share of intra-African trade to African countries outside of the REC (a) Calories 37 49 30 15 56 26 31 47 24 15 65 46 35 38 35 9 59 52 37 15 59 10 59 53 0 10 20 30 40 50 60 70 COMESA EAC ECCAS ECOWAS SADC AMU Percent 2018– 2020 2013– 2015 2008– 2010 2003 – 2005 (b) Fats 21 56 17 7 71 22 26 53 15 12 67 22 24 49 27 5 67 43 32 14 52 5 63 45 0 10 20 30 40 50 60 70 80 COMESA EAC ECCAS ECOWAS SADC AMU Percent 2018 – 2020 2013 – 2015 2008– 2010 2003 – 2005 (c) Proteins 30 39 70 36 71 24 48 26 60 27 70 69 32 22 58 26 64 67 39 10 83 27 64 63 0 20 40 60 80 100 COMESA EAC ECCAS ECOWAS SADC AMU Percent 2018 – 2020 2013 – 2015 2008– 2010 2003 – 2005 Source: Constructed from the 2022 AATM database. Note: Trade shares of RECs sum to over 100 percent due to overlapping country membership. COMESA = Common Market for Eastern and Southern Africa; EAC = East African Community; ECCAS = Economic Community of Central African States; ECOWAS = Economic Community of West African States; SADC = Southern African Development Community; AMU = Arab Maghreb Union. 59Africa Agriculture Trade Monitor / 2022 Report Ch ap te r Th re e Chapter Three Intra-African Agricultural Trade Role of processed products in intra-African trade in nutrients Lastly, we examine the share of nutrient content in intra-African exports of processed agricul- tural products in total intra-African agricultural exports for selected RECs over the three-year period 2018 to 2020 (Figure 3.14). In this analysis, intra-African exports include exports both within the RECs as well as exports to extra-REC African countries. Generally, processed prod- ucts account for less than 50 percent of total calories exported by RECs, with the exception of ECOWAS and ECCAS. Not surprisingly, processed products account for proportionately larger shares of protein and fat content. Overall, processed products accounted for 42 percent of calories, 76 percent of fats, and 55 percent of proteins traded within Africa from 2018 to 2020 (compared to 46 percent of trade value; see Figure 3.5). Since the greatest share of processed agricultural products are traded within RECs or within Africa, these results suggest that prod- ucts rich in fat, such as palm oils, and those rich in protein, such as meat and dairy products, are the most traded processed agricultural products between African countries. Growing intraregional trade in processed agricultural products has potential implications for nutritional outcomes. Figure 3.14 shows that traded processed products differ in nutritional content from unprocessed products, but further analysis is required both to identify the broad differences between processed and unprocessed traded products for a wider set of nutrients and to differentiate categories of processed food products according to nutritional content. Each processing category comprises a wide range of products of varied nutritional quality. Some processed products may increase the shelf-life of nutrient-rich foods and help to com- bat undernutrition, while others contribute to overnutrition and noncommunicable diseases (NCDs) (Reardon et al. 2021). However, there has been very little research on the impacts of trade composition on diets and nutrition. Thow et al. (2015) show that trade liberalization in SADC in the past decades was accompanied by increased imports of products associated with NCDs — particularly soft drinks and processed snack foods — both from within SADC and from outside the region and continent. Figure 3.14 Share of processed products in intra-African agricultural trade, 2018–2020, measured in nutrient content 42 41 38 63 64 35 41 76 80 76 85 80 68 96 55 58 52 74 66 56 77 0 20 40 60 80 100 Africa COMESA EAC ECCAS ECOWAS SADC AMU Percent Proteins Fats Calories Source: Constructed from the 2022 AATM database. Note: Trade shares of RECs sum to over 100 percent due to overlapping country membership. COMESA = Common Market for Eastern and Southern Africa; EAC = East African Community; ECCAS = Economic Community of Central African States; ECOWAS = Economic Community of West African States; SADC = Southern African Development Community; AMU = Arab Maghreb Union. 60 Africa Agriculture Trade Monitor / 2022 Report Chapter Three Intra-African Agricultural Trade The trends in trade in nutritional content described in this section mirror trends in value terms to some extent. For example, the predominant roles of Southern and Eastern Africa in intra-African exports in calorie terms (Figure 3.11, Table 3.1) reflect the roles of SADC and COMESA as leading intra-African exporters in value terms (Table 3.2). However, there are some contrasts, including the steady growth of trade in nutritional content over the past two decades, which does not reflect the decline in trade in value terms that began in 2013. The growing role of processed agricultural products in intra-African agricultural trade reflects increasing consumption of these products in part because of surging demand from urban markets (Sabwa and Collins 2018). The impacts of dietary change on health and nutrition need to be further assessed. The analysis presented here is only a first step; these findings suggest that traded processed agricultural products are relatively rich in protein but also in fat, which underlines concerns that processed food may lead to increased risk of obesity and NCDs related to diet. PROCESSED FOOD TRADE AT THE COUNTRY AND PRODUCT LEVEL Our exploration of aggregate trends in Africa’s intraregional agricultural trade, in terms of value and of nutritional content, points to an increasing role of trade in processed food, which can have important impacts on health and nutrition. In this section, we delve deeper into intra- African trade in processed agricultural products, exploring how the trends identified above play out at the country and product level. First, we review countries’ roles and performance in intra-African trade in processed products, including their ability to diversify their processed export basket. Then, we identify the top processed and semi-processed products traded within the continent, in terms of value, and examine market dynamics and trade networks for five major products. While the focus is on exploring trends in trade of processed agricultural products, we include some discussion on trade of unprocessed products for comparison purposes. Country performance in processed food trade Figure 3.15 shows the top 10 countries that accounted for the largest value of intra-African agricultural exports of unprocessed, semi-processed, and processed products during the 2018–2020 period. South Africa dominates in all categories, accounting for 39 percent of intra- African agricultural exports of processed products, 24 percent of semi-processed exports, and 31 percent of unprocessed exports. Uganda, Egypt, and Zambia also figure among the top 10 exporters in all three categories. Most of the major exporters of unprocessed and semi- processed products are Eastern and Southern African countries, while several Western African countries play leading roles in exports of processed products. In addition to South Africa, other top exporters of processed food products include Egypt, Kenya, Côte d’Ivoire, Senegal, Morocco, and Nigeria. 61Africa Agriculture Trade Monitor / 2022 Report Ch ap te r Th re e Chapter Three Intra-African Agricultural Trade Figure 3.15 Intra-African agricultural exports by country and processing level, 2018–2020 UNPROCESSED PRODUCTS South Africa Uganda Sudan Tanzania, United Rep. Namibia Ethiopia Egypt, Arab Rep. Côte d'Ivoire Zambia MozambiqueOther SEMI -PROCESSED PRODUCTS South Africa Kenya Egypt, Arab Rep. Swaziland Zambia Zimbabwe Uganda Malawi Tanzania, United Rep. GhanaOther PROCESSED PRODUCTS South Africa Egypt, Arab Rep. Kenya Côte d'Ivoire Senegal Morocco Nigeria Zambia Uganda Ghana Other UNPROCESSED PRODUCTS SEMI - PROCESSED PRODUCTS PROCESSED PRODUCTS Source: Constructed from the 2022 AATM database. Another measure of countries’ performance in trade of processed products is their ability to diversify their export baskets. Countries with greater capabilities are expected to competitive- ly produce and export a wider range of products (Bouët and Sall 2021). To assess countries’ competitiveness in regional markets for processed agrifood products, we calculate diversity index values. The diversity index shows the number of agricultural products a country exports competitively, measured by revealed comparative advantage (RCA). For this purpose, we use Balassa’s (1965) definition of RCA, which is calculated by dividing the share of a product in a given country’s intra-African agricultural exports by the share of that product in total intra-Afri- can agricultural exports. The RCA thus measures a country’s performance in intra-African trade of that product relative to other products and other African countries. Let be the intra-African trade flow of product  k  from country  r  to country  s. With a dot meaning a summation, . is the total intra-African exports of country r and  the total intra- African agricultural exports. Thus, the RCA of country r for product k,  , is measured by the share of the product in the country’s intra-African exports compared to its share in intra-African agricultural trade as in equation (1): 62 Africa Agriculture Trade Monitor / 2022 Report Chapter Three Intra-African Agricultural Trade (1)   and   are the values of country   intra-African exports of product  and intra-African agricultural exports of product  . RCA scores greater than one indicate that a country has a revealed comparative advantage in the product within Africa. RCA is used to assess which products a country or a region is best at producing and exporting, relative to other products it could export and to other countries or regions. The measurement of RCA is based on observed trade patterns and therefore reflects all factors that contribute to these patterns, including differences in endowments and productivity as well as the impacts of trade policies. The diversity index counts the number of agricultural products a country exports competitively, that is the number of products for which a given country has a revealed comparative advantage. A higher diversity index indicates that the country has a relatively large group of products that it exports competitively. Diversification of exports is advantageous because it can help countries overcome export instability or the negative impact of a deterioration in terms of trade in primary products, and thus contributes to their resilience. In 2018–2020, South Africa, Egypt, Botswana, Morocco, Zambia, and Namibia (in decreasing order) had the most diversified intra-African agricultural export baskets, all with more than 20 competitive products out of 122 products (Figure 3.16). The countries that diversified their exports of agricultural processed goods the most between the two periods (2003–2005 and 2018–2020) are Zambia, Rwanda, Egypt, and Republic of Congo, which all saw an increase in the diversity index of processed agricultural products of more than 10 products. In contrast, countries including Mauritius, South Africa, Eswatini, Algeria, Nigeria, Kenya, and Guinea-Bissau experienced a decline in the diversity index by more than 10 processed products (Figure 3.16). Not surprisingly, several countries that play leading roles in terms of the value of exports also have high diversity index values, displaying competitiveness across a range of products. South Africa, in particular, has by far the highest diversity index value for processed products. However, its diversity index value has deteriorated somewhat since the early 2000s. Egypt and Zambia, in contrast, are major intra-African exporters that have increased the diversity of their processed agricultural exports since 2003–2005. 63Africa Agriculture Trade Monitor / 2022 Report Ch ap te r Th re e Chapter Three Intra-African Agricultural Trade Figure 3.16 Diversity index in processed agricultural products, change between 2003–2005 and 2018–2020 Source: Constructed from the 2022 AATM database. 17 23 13 38 18 8 18 5 12 6 9 14 30 15 18 4 4 5 9 8 7 5 11 3 3 20 4 5 16 9 14 5 3 4 26 7 2 5 21 18 10 17 4 4 19 13 13 2 18 12 4 8 70 14 13 13 11 11 6 5 5 5 4 4 4 3 3 3 2 2 1 1 1 1 1 1 0 0 0 0 -1 -1 -1 -2 -2 -2 -2 -3 -3 -3 -4 -4 -4 -4 -5 -6 -8 -9 -9 -9 -9 -10 -10 -11 -12 -13 -14 -24 -40 -20 0 20 40 60 80 Rwanda Zambia Congo, Rep. Egypt Uganda Burkina Faso Côte d'Ivoire South Sudan Burundi Mali Niger Angola Botswana Mauritania Mozambique Seychelles Comoros Equatorial Guinea Lesotho Liberia Malawi Sao Tome & Principe Benin Chad Sierra Leone Tunisia Cabo Verde Gabon Senegal Ethiopia Gambia Guinea Somalia DRC Morocco Sudan Central African Rep. Eritrea Namibia Tanzania, United Rep. Cameroon Togo Libya Djibouti Ghana Madagascar Zimbabwe Guinea-Bissau Kenya Nigeria Algeria Eswatini South Africa Mauritius Diversity index Difference 2018–2020 64 Africa Agriculture Trade Monitor / 2022 Report Chapter Three Intra-African Agricultural Trade Top processed products in intra-African agricultural trade After analyzing export trade structure at the country level, we now identify key traded products and examine their trade networks in detail. Table 3.2 shows the most important unprocessed products and semi-processed and processed products6 traded among African countries. The top 20 processed products account for 48 percent of intra-African agricultural exports by val- ue, while the top 20 unprocessed agricultural products account for 29 percent. Sugar products, oils, and stimulants are prominent among traded processed products, with sugar, palm oil, cigars and cigarettes, and tea accounting for around 20 percent of intra-African agricultural exports. The position of palm oil as a major traded processed product reflects our findings above that intra-African trade in processed agricultural products shows higher fat content than trade in unprocessed products.7 Among unprocessed products, cereals (including maize), rice, cattle, coffee, and oilseeds play the largest role, together accounting for over 14 percent of total exports. Table 3.2 Top unprocessed and semi-processed and processed products in intra-African agricultural trade, 2018–2020 Unprocessed Semi-processed and processed Rank Description Intra-African export share (% ) Description Intra-African export share (%) 1 Maize (corn) 4.8 Sugar 5.6 2 Rice 2.5 Palm oil 5.1 3 Bovine animals; live 2.3 Cigars and cigarettes 4.5 4 Coffee 2.1 Tea 4.0 5 Oilseeds and oleaginous fruits 1.8 Wheat flour 3.5 6 Milk and cream 1.7 Fruit juices 2.4 7 Cotton; not carded or combed 1.6 Tobacco 2.2 8 Dates, figs, pineapples, avocados, guavas, mangoes, and mangosteens 1.6 Legumes, shelled 2.2 9 Tobacco, unmanufactured 1.6 Soya-bean oil 2.2 10 Apples, pears, and quinces; fresh 1.6 Sugar confectionery 2.1 11 Vegetables; n.e.c. in chapter 07 1.4 Bread, pastry, cakes, biscuits 1.9 12 Wheat and meslin 0.9 Malt extract 1.8 13 Bananas, including plantains 0.9 Pasta 1.8 14 Onions, shallots, garlic, leeks, and other alliaceous vegetables 0.8 Miscellaneous edible preparations 1.6 15 Citrus fruit 0.7 Sunflower oil 1.5 16 Potatoes; fresh or chilled 0.6 Milk and cream 1.4 17 Nuts, edible 0.6 Chocolate and cocoa products 1.1 18 Groundnuts 0.5 Meat and edible offal of poultry 1.1 19 Grain sorghum 0.5 Beverages, spirits, and vinegar 1.1 20 Seeds, fruit, and spores 0.5 Margarine 1.1 All 29.3 All 48.3 Source: Constructed from the 2022 AATM database. 6 For the remainder of this section, we use “processed products” to refer to both processed and semi-processed products. Most products listed in Table 3.3 correspond to HS4 product codes; we group processed and semi-pro- cessed categories together in this discussion because some HS4 codes combine both processed and semi-processed products. In some cases, we combine several HS4 codes into one product category to improve clarity. HS4 codes corresponding to each product are provided in Appendix Table A3.1. 7 Clearly, several of the top-traded processed products are not important contributors to healthy diets. High intake of sugars and fats is associated with increased risk of NCDs, while cigarettes and cigars carry clear and serious health risks. Trade in these products is economically important and contributes to food security through impacts on incomes of producers, processors, and other value chain actors, but overconsumption of these products has notable costs. Strategies to promote intra-African trade in processed agricultural products should thus consider trade-offs in terms of impacts on nutrition and health. 65Africa Agriculture Trade Monitor / 2022 Report Ch ap te r Th re e Chapter Three Intra-African Agricultural Trade The remainder of this chapter focuses on the five processed products with the largest export shares (sugar, palm oil, cigars and cigarettes, tea, and wheat flour). To better understand the dynamics of Africa’s growing intraregional trade in processed agricultural products, we exam- ine patterns of competitiveness, market dynamics, and network structures and identify tariff measures and other barriers impeding this trade. First, we characterize the structure of intra-African exports of the top processed agricultural products using the ubiquity index. This index is measured as the number of countries that export a product in which they have an RCA of greater than one. It provides a measure of the relative sophistication of products, with more sophisticated, less easily produced prod- ucts showing lower ubiquity values. Table 3.3 shows that for the most regionally traded ag- ricultural goods, processed products have slightly higher ubiquity values than unprocessed products during the 2018–2020 period. The average ubiquity index for processed agrifoods is estimated at 10 countries, while for unprocessed products, the ubiquity index is around 9 countries. Wheat flour, sugar, and palm oil have ubiquity scores indicating that over one-fifth of African countries have a revealed comparative advantage in the product. This suggests that the most commonly traded products are still relatively accessible to a number of African countries. ECOWAS has the greatest advantage for wheat flour and palm oil, among these key products, with respectively 5 and 7 countries. In addition, 50 percent of SADC countries have a revealed comparative advantage in sugar. Tea and cigars and cigarettes appear to be the most sophis- ticated products, accessible to fewer countries, the majority of which are in the Eastern and Southern regions. Table 3.3 Ubiquity index for selected processed products Products 2018–2020 Africa ECOWAS ECCAS COMESA SADC AMU EAC CEMAC SACU Processed Cigars and cigarettes 5 2 1 2 1 0 2 0 1 Palm oil 16 7 4 7 3 0 3 2 0 Sugar 13 1 2 7 8 2 0 1 1 Tea 5 0 2 5 2 0 3 0 0 Wheat flour 13 5 3 3 3 2 3 0 1 Average ubiquity 10 3 2 5 3 1 2 1 1 Unprocessed Bovine animals 7 1 1 4 2 0 1 0 2 Coffee, 11 4 4 5 2 0 4 1 0 Maize (corn) 5 0 0 3 4 0 2 0 1 Oilseeds 12 6 3 3 0 0 0 2 0 Rice 9 2 3 2 3 1 2 2 0 Average ubiquity 9 3 2 3 2 0 2 1 1 Total number of countries 54 15 11 21 16 5 6 6 5 Source: Constructed from the 2022 AATM database. Note: Ubiquity index values measure the number of countries showing revealed comparative advantage (RCA) in a product. The sum of values shown for RECs exceeds the African total due to overlapping REC membership. COMESA = Common Market for Eastern and Southern Africa; EAC = East African Community; ECCAS = Economic Community of Central African States; ECOWAS = Economic Community of West African States; SADC = Southern African Development Community; AMU = Arab Maghreb Union; CEMAC = Communauté Economique et Monétaire de l’Afrique Centrale; SACU = Southern African Customs Union.” 66 Africa Agriculture Trade Monitor / 2022 Report Chapter Three Intra-African Agricultural Trade Dynamics of key players and network structure of selected processed agricultural products Although only a limited number of countries (fewer than 16) are competitive in trading sugar, palm oil, cigars and cigarettes, tea, or wheat flour, a look at the region’s trade networks shows that at least 30 countries are actively participating in trade in these products. In this section, we provide more detailed analysis of intra-African trade networks for the top five traded pro- cessed products. Table 3.4 summarizes African countries’ participation in these trade networks. Participation as exporters was widespread, with well over half of African countries exporting each product during both the 2003–2005 and 2018–2020 time periods. Import participation was even broader — nearly all African countries imported these products during both periods. For all products except palm oil, the number of exporting countries decreased moderately between the two periods. Exporters became most concentrated for tea, with the number of ex- porters decreasing from 40 to 31. For all products and in both periods, a majority of countries participated as both exporters and importers. The final two columns of Table 3.4 report network density — calculated as the number of re- alized trade links in the network divided by the number of possible links among participating countries. For example, in the sugar network, there were 2,756 possible trade flows during the first period (or 53 × 52, as the 53 participating countries each had 52 potential trade partners); of these, 492 trade flows were observed, or 17.9 percent of possible flows. The density values are between 10 and 20 percent for most products, somewhat higher than the density values re- ported for unprocessed agricultural products in the 2021 AATM (Goundan and Tadesse 2021), but still indicative of relatively sparse trade networks. The low densities reflect the analysis of De Benedictis and Tajoli (2010), who found that trade network density values for Africa are lower than those of all other continents. These findings may also reflect the low quality of trade data in Africa, with large shares of informal and unrecorded trade not included. Most density values did not vary significantly between the 2003–2005 and 2018–2020 periods, and in both periods the network density of sugar is noticeably higher than that of the other products. Table 3.4 Intra-African trade network properties for top processed products, 2003–2005 and 2018–2020 Number of active countries Total trade links Network density (%)All Exporters Importers Both Period 1 2 1 2 1 2 1 2 1 2 1 2 Sugar 53 54 45 41 52 54 44 41 492 540 17.85 18.87 Palm oil 53 53 39 40 51 52 37 39 354 330 12.84 11.97 Cigars and cigarettes 53 51 40 36 52 50 39 35 376 356 13.64 13.96 Tea 50 52 40 31 50 51 40 30 314 324 12.82 12.22 Wheat flour 51 53 39 35 50 47 38 29 332 270 13.02 9.80 Source: Constructed from the 2022 AATM database. Note: Period 1 = 2003–2005; Period 2 = 2018–2020. Table 3.5 shows indicators on market concentration, including the share of trade in each prod- uct accounted for by the top 10 flows and the shares of the top exporter–importer pairs. For nearly all products examined, more than half of intra-African trade occurs among a limited group of partners: the share of the top 10 trade flows ranges from 47 to 84 percent during the 2003–2005 period and from 55 to 87 percent during the 2018–2020 period.8 In both periods, 8 This degree of concentration is comparable to that observed among LAC countries, for which the top 10 trade flows accounted for 53–81 percent of intraregional trade in the selected products in 2003–2005 and 55–87 percent in 2018–2020, but higher than that observed in the European Union region, where shares of the top 10 flows span from 47 to 64 percent and 38 to 64 percent during the two time periods, respectively. 67Africa Agriculture Trade Monitor / 2022 Report Ch ap te r Th re e Chapter Three Intra-African Agricultural Trade trade in sugar was the least concentrated and trade in tea was the most concentrated; the tea trade network also became more concentrated over time. In the second period, the top trade flow — Kenyan tea exports to Egypt — accounted for a full 57 percent of intra-African tea trade. The top importer–exporter country pairs shown in the last three columns of Table 3.5 reflect the importance of REC membership in intra-African trade. All country pairs for all products and both time periods represent within-REC trade. Most country pairs are also members of the same geographic region; exceptions include trade between Egypt and other members of COMESA located in Eastern Africa. About half of the top country pairs share a border. Table 3.5 Largest intra-African trade flows for top processed products, 2003–2005 and 2018–2020 Product Period Share of top 10 flows (%) Top 3 country pairs (exporter-importer) and trade shares Pair 1 Pair 2 Pair 3 Sugar 2003–2005 47.0 SWZ – ZAF 13.7 ZMB – COD 4.7 ZAF – BWA 4.5 2018–2020 54.6 SWZ – ZAF 23.5 ZAF – MOZ 5.4 ZAF – NAM 4.8 Palm oil 2003–2005 66.2 CIV – NER 15.1 ZAF – ZMB 10.5 CIV – SEN 9.3 2018–2020 61.2 KEN – UGA 14.0 GHA – SEN 11.2 CIV – MLI 8.3 Cigars and cigarettes 2003–2005 58.9 KEN – SOM 13.5 ZAF – BWA 10.6 ZAF – NAM 7.9 2018–2020 56.9 KEN – SOM 9.9 KEN – MUS 8.0 NGA – NER 7.6 Tea 2003–2005 83.8 UGA – KEN 20.7 KEN – SDN 18.8 KEN – EGY 11.8 2018–2020 87.3 KEN – EGY 57.1 KEN – SDN 10.1 MWI – ZAF 4.6 Wheat flour 2003–2005 53.7 MAR – LBY 9.5 TUN – LBY 7.5 ZAF – BWA 7.4 2018–2020 51.4 EGY – ERI 14.8 EGY – MDG 12.3 EGY – SOM 11.5 Source: Constructed from the 2022 AATM database. Note: BWA = Botswana; CIV =Côte d’Ivoire; COD = Democratic Republic of the Congo; EGY = Egypt; ERI = Eritrea; GHA = Ghana; KEN = Kenya; LBY = Libya; MAR = Morocco; MDG = Madagascar; MLI = Mali; MOZ = Mozambique; MUS= Mauritius; MWI = Malawi; NAM = Namibia; NER = Niger; NGA = Nigeria; SDN= Sudan; SEN = Senegal; SOM = Somalia; SWZ = Eswatini; TUN = Tunisia; UGA = Uganda; ZAF = South Africa; ZMB = Zambia. Figures 3.17–3.21 depict trade in selected products among geographic subregions of Africa. As in Figure 3.11, each region represents a portion of the outside of the circle. The thickness of a trade flow and the numbers on the scale surrounding the figure correspond to the share of the trade flow in total intra-African trade in the product, and its color corresponds to the exporting region. For example, Figure 3.17 illustrates the trade in sugar during the 2003–2005 period, and the blue flow between Southern Africa and Eastern Africa represents exports from Southern to Eastern Africa, which account for 27 percent of total intra-African sugar exports during the period. For nearly all products and time periods, the majority of trade takes place within geographic regions. This reflects multiple factors facilitating trade among neighboring countries, including lower transport costs, language and cultural similarities, and the existence of trade agreements. The five products show contrasting patterns of change over time, with the share of intra-African trade that is within regions increasing for palm oil and sugar and decreasing for tea and wheat flour. The most dramatic changes in geographic concentration occurred for tea, for which the share of intra-African trade taking place within geographic regions declined from 69.1 to 15.6 percent, largely due to increased flows from Eastern to Northern Africa; this reflects the major Kenya–Egypt trade relationship shown in Table 3.5. 68 Africa Agriculture Trade Monitor / 2022 Report Chapter Three Intra-African Agricultural Trade Southern Africa is the largest sugar exporter by far, accounting for 66.8 percent of total intra- African sugar exports in the first period and 54.8 percent in the second period (Figure 3.17). These exports are largely directed within its region and to Eastern African countries. Eastern Africa — which largely exports within the region — and Northern Africa increased their shares in intra-African sugar trade between the two periods. Northern African sugar exports were mainly directed to Eastern Africa during both periods, although the share traded within Northern Africa increased over time. Western and Central Africa decreased their shares in intra-African sugar trade between the two periods. Figure 3.17 Intra-African sugar trade, regional shares Source: Constructed from the 2022 AATM database. Note: Regions are represented by portions of the circle corresponding to their share in intra-African agricultural exports of the product. Arcs represent trade flows between and within regions, with the width of the arc corresponding to the magnitude of the flow and its color corresponding to the exporting region. The numbers around the circle indicate the share of a trade flow in total intra-African exports of the product. Intra-African trade in palm oil is dominated by Western Africa, particularly in the 2018–2020 period, when Western Africa accounted for 59.6 percent of intra-African exports (Figure 3.18). Virtually all Western African palm oil exports are directed to other countries in the region. East- ern Africa significantly increased its share in intra-African palm oil trade over time, providing 31.0 percent of intra-African exports in the second period; again, the majority of these exports are to other Eastern African countries. Southern, Northern, and Central Africa saw their trade shares decrease between the two periods. The share of exports traded within geographic regions during the second period — 88.5 percent — is the largest of the five products examined. This reflects a very high geographic concentration of trade in Western and Eastern Africa. The other regions broke the pattern by directing more palm oil exports to Eastern Africa than to their own regions in one or both periods. (a) 2003–2005 (b) 2018–2020 69Africa Agriculture Trade Monitor / 2022 Report Ch ap te r Th re e Chapter Three Intra-African Agricultural Trade Figure 3.18 Intra-African palm oil trade, regional shares Source: Constructed from the 2022 AATM database. Note: Regions are represented by portions of the circle corresponding to their share in intra-African agricultural exports of the product. Arcs represent trade flows between and within regions, with the width of the arc corresponding to the magnitude of the flow and its color corresponding to the export- ing region. The numbers around the circle indicate the share of a trade flow in total intra-African exports of the product. Western, Eastern, and Southern Africa are major players in intra-African trade in cigars and cigarettes, but between the two time periods, Western Africa increased its share at the expense of the other regions and displaced Southern Africa as the leader in cigar and cigarette exports (Figure 3.19). Trade in cigars and cigarettes is highly regional, with only minor trade flows be- tween geographic regions. Southern Africa is the only region that directs over a quarter of its exports outside its own region, mostly to Western and Eastern Africa. Figure 3.19 Intra-African trade in cigars and cigarettes, regional shares Source: Constructed from the 2022 AATM database. Note: Regions are represented by portions of the circle corresponding to their share in intra-African agricultural exports of the product. Arcs represent trade flows between and within regions, with the width of the arc corresponding to the magnitude of the flow and its color corresponding to the export- ing region. The numbers around the circle indicate the share of a trade flow in total intra-African exports of the product. (a) 2003–2005 (b) 2018–2020 (a) 2003–2005 (b) 2018–2020 70 Africa Agriculture Trade Monitor / 2022 Report Chapter Three Intra-African Agricultural Trade Of the five products examined here, tea shows by far the highest concentration of exports from a single region (Figure 3.20). Nearly 90 percent of intra-African tea exports originate from Eastern Africa. During the 2003–2005 period, Eastern Africa was also the largest importer of tea, accounting for around 60 percent of total intra-African tea imports (nearly all from oth- er Eastern African countries). However, Northern Africa greatly increased its tea imports over time, accounting for over 70 percent of intra-African tea imports during the 2018–2020 period (again, with nearly all imports originating from Eastern Africa). The major trade flows between Eastern and Northern Africa during this period reflect the high volume of trade between Kenya and Egypt (Table 3.5) and give tea the distinction of being the only product examined for which less than half of intra-African trade took place within geographic regions. In addition to Eastern Africa, the only other region with substantial tea exports is Southern Africa, which provided around 10 percent of intra-African tea exports during both periods. Figure 3.20 Intra-African tea trade, regional shares Source: Constructed from the 2022 AATM database. Note: Regions are represented by portions of the circle corresponding to their share in intra-African agricultural exports of the product. Arcs represent trade flows between and within regions, with the width of the arc corresponding to the magnitude of the flow and its color corresponding to the export- ing region. The numbers around the circle indicate the share of a trade flow in total intra-African exports of the product. Of the five processed products examined, wheat flour is the only one for which Northern Africa plays the predominant role in intra-African exports (Figure 3.21). During the 2003–2005 period, Northern, Eastern, and Southern Africa participated equally, each accounting for 27–28 percent of intra-African wheat flour exports. However, Northern Africa increased its share to 46 percent during the 2018–2020 period. Although Northern Africa’s wheat flour exports were largely intra- regional during the first period, most of its exports were directed to Eastern African countries during the second period; this reflects the high volume of wheat flour exports from Egypt to Eritrea and Somalia (Table 3.5). This Northern Africa–Eastern Africa flow represented nearly 40 percent of intra-African trade in wheat flour during that period. (a) 2003–2005 (b) 2018–2020 71Africa Agriculture Trade Monitor / 2022 Report Ch ap te r Th re e Chapter Three Intra-African Agricultural Trade Figure 3.21 Intra-African trade in wheat flour, regional shares Source: Constructed from the 2022 AATM database. Note: Regions are represented by portions of the circle corresponding to their share in intra-African agricultural exports of the product. Arcs represent trade flows between and within regions, with the width of the arc corresponding to the magnitude of the flow and its color corresponding to the exporting region. The numbers around the circle indicate the share of a trade flow in total intra-African exports of the product. TRADE BARRIERS BY STAGE OF PROCESSING Trade policies are important determinants of regional integration. Africa has significantly reduced trade tariffs in recent years, and further reduction is expected under the AfCFTA schemes. Yet, tariffs are only one way of limiting trade. Nontariff measures (NTMs) are of particular concern to exporters and importers in developing countries as they can potentially affect trade in goods, changing quantities traded or price or both. In this section, we examine the prevalence of barriers to intraregional trade, focusing on the five processed products discussed in the preceding section: cigars and cigarettes, palm oil, sugar, tea, and wheat flour. For comparison, we will also examine tariffs and NTMs in Africa’s main trade partner regions and in other world regions for these goods, as well as tariff barriers for unprocessed products. Africa’s main partner regions Before discussing barriers to intraregional trade in Africa and other regions, we briefly review trade patterns in the five selected products, including the role of imports from outside of Afri- ca and intra-African trade in supplying African markets. Table 3.6 shows Africa’s main partner regions for imports of the selected products. The Asia-Pacific region is Africa’s top partner for most of these products. African countries import 54 percent of cigars, 89 percent of palm oil, and 38 percent of wheat flour from Asia, and 50 and 66 percent of sugar is imported respec- tively from Latin America and the Caribbean (LAC) and from the BRICS (Brazil, Russia, India, China, and South Africa). Tea and wheat flour are predominantly traded within the African con- tinent (77 percent and 45 percent respectively), and the Asia-Pacific region is the main external partner for tea and wheat flour imports. (a) 2003–2005 (b) 2018–2020 72 Africa Agriculture Trade Monitor / 2022 Report Chapter Three Intra-African Agricultural Trade Table 3.6 Distribution of African imports of selected processed products by origin, 2018–2020 Product Africa Asia-Pacific BRICS Eastern Europe EU LAC Cigars and cigarettes 22.1% 54.0% 6.9% 6.2% 8.6% 0.5% Palm oil 9.8% 89.3% 1.1% 0.0% 0.2% 0.0% Sugar 18.2% 23.8% 65.9% 1.2% 6.7% 50.4% Tea 76.5% 21.6% 13.0% 0.5% 1.3% 0.0% Wheat flour 45.3% 38.2% 5.0% 3.2% 12.7% 0.1% Source: Constructed from the 2022 AATM database. Note: BRICS = Brazil, Russia, India, China, and South Africa; EU = European Union; LAC = Latin America and the Caribbean. Values do not sum to 100 percent because regions overlap. Brazil is in both BRICS and LAC, while India and China are in both BRICS and Asia-Pacific. Table 3.7 presents the share of intraregional trade in total trade of the five processed products for Africa, major RECs, and other world regions. Of these products, intra-African trade plays the largest role for tea — over three-fourths of African countries’ tea exports are directed within the continent. The next largest intraregional trade share is for wheat flour, at 45 percent. For most of the products, intraregional trade in other world regions generally accounts for a much larger share of their total trade than it does in Africa. Tea is the exception — Africa’s intraregional trade share of 76.5 percent is the highest of the regions examined. The European Union shows the highest intraregional trade shares for three products (cigars and cigarettes, sugar, and wheat flour). Table 3.7 also shows the share of intra-REC imports in total imports of each REC. AMU and EC- CAS have the lowest intra-REC trade shares for most products. A large share of tea trade occurs not only within Africa but within RECs, with over 75 percent of tea imported from countries in the COMESA, EAC, and SADC regions coming from countries within the same REC. Table 3.7 Share of intraregional imports in total imports of selected processed products, Africa, and other regions, 2018–2020 Africa COMESA EAC ECCAS ECOWAS SADC AMU Asia- Pacific Eastern Europe EU LAC Cigars and cigarettes 22.1% 9.8% 72.9% 0.4% 45.5% 40.3% 0.1% 65.0% 71.9% 88.4% 48.0% Palm oil 9.8% 4.9% 8.0% 3.5% 22.3% 4.8% 0.1% 99.8% 8.4% 25.9% 68.7% Sugar 18.2% 13.5% 8.7% 3.1% 2.3% 57.3% 4.0% 43.0% 45.3% 78.3% 49.6% Tea 76.5% 80.8% 90.4% 0.7% 0.9% 77.5% 0.1% 55.9% 12.9% 35.5% 20.6% Wheat flour 45.3% 50.5% 40.1% 9.4% 33.2% 24.4% 6.5% 88.2% 64.5% 95.0% 63.4% Source: Constructed from the 2022 AATM database. Note: COMESA = Common Market for Eastern and Southern Africa; EAC = East African Community; ECCAS = Economic Community of Central African States; ECOWAS = Economic Community of West African States; SADC = Southern African Development Community; AMU = Arab Maghreb Union; EU = European Union; LAC = Latin America and the Caribbean. Analysis of tariff measures for selected processed products Tariffs have multiple functions, including providing revenue for governments and shielding domestic industries from competition (METI 2002). At the global level, since 1947, the General Agreement on Tariffs and Trade (GATT), which led to the creation of the World Trade Organiza- tion (WTO), has been central to an ongoing process of tariff reductions. In Africa, the AfCFTA 73Africa Agriculture Trade Monitor / 2022 Report Ch ap te r Th re e Chapter Three Intra-African Agricultural Trade aims to reduce tariffs among member states and to address related policy areas such as trade facilitation, services, and regulatory measures. AfCFTA countries have between 5 and 10 years to reduce tariffs on 90 percent of products traded under this regional trade agreement. Comparison between tariffs imposed and faced by Africa African countries are imposing fewer tariff constraints on their African counterparts than the Asia-Pacific, LAC, and BRICS regions for most of the products (Figure 3.22). (Of the five prod- ucts, palm oil imported to Africa from LAC is the only one that faces a lower tariff rate than in- tra-African imports, 9 versus 12 percent.) This should facilitate Africa’s regional integration. Af- rica both faces relatively high tariff barriers on its exports to Asia of these five major processed products (Figure 3.23) and imposes high tariff barriers on its imports from Asia (Figure 3.22). Despite this, the continent depends heavily on imports from Asia of several of the selected products. Figure 3.22 Tariffs imposed on imports by Africa by processed product, 2019 18 12 15 9 16 43 7 35 14 11 50 13 41 26 23 18 3 45 12 46 0 10 20 30 40 50 60 Cigars Palm oil Sugar Tea Wheat Ta rif f r at e ( % ) Africa LAC Asia BRICS Source: Constructed from the MAcMap-HS6 database. We thank Houssein Guimbard from CEPII for access to this database Figure 3.23 Tariffs faced by African exports by processed product, 2019 18 12 15 9 16 30 9 29 17 24 26 17 23 12 25 26 14 28 15 24 0 5 10 15 20 25 30 35 Cigars Palm oil Sugar Tea Wheat Ta rif f r at e ( % ) Africa LAC Asia BRICS Source: Constructed from the MAcMap-HS6 database. Note: BRICS = Brazil, Russia, India, China, and South Africa; LAC = Latin America and the Caribbean. 74 Africa Agriculture Trade Monitor / 2022 Report Chapter Three Intra-African Agricultural Trade Intraregional tariffs (Africa compared to Asia, LAC, and BRICs) Figure 3.24a compares the intraregional tariffs imposed in Africa, Asia-Pacific, LAC, and the BRICS on processed products. It shows that Africa applies lower intraregional tariff rates than Asia does to cigars and cigarettes, sugar, tea, and wheat flour. However, compared to total imports, intraregional trade is smaller in Africa than other regions. Using LAC as a benchmark, we see that countries from Africa, Asia-Pacific, and BRICS on average apply a higher intraregional tariff to these processed products, except sugar, than LAC does (Figure 3.24a). Overall, intraregional trade plays a less prominent role in Africa than in LAC for most of the selected products, while other groups including the Asia-Pacific region trade more within their regions than LAC (Table 3.7). The stronger intraregional trade performance of Asia-Pacific despite higher tariffs than LAC suggests that, beyond the impact of tariff barriers in intraregional trade performance, external non-tariff factors can also restrict intraregional trade. Figure 3.24 Intraregional tariffs for processed and unprocessed products, 2019 18 12 15 9 16 34 6 36 21 27 16 3 45 2 6 24 8 50 12 60 0 10 20 30 40 50 60 70 Cigars and cigarettes Palm oil Sugar Tea Wheat flour Ta rif f r at e ( % ) (a) Processed Africa Asia-Pacific LAC BRICS 6 4 7 11 5 29 19 17 34 30 14 1 1 4 1 12 8 8 7 59 0 10 20 30 40 50 60 70 Tobacco Palm Oil Sugar Tea Wheat Ta rif f r at e ( % ) (b) Unprocessed Africa Asia-Pacific LAC BRICS Source: Constructed from the MAcMap-HS6 database. Note: BRICS = Brazil, Russia, India, China, and South Africa; LAC = Latin America and the Caribbean. 75Africa Agriculture Trade Monitor / 2022 Report Ch ap te r Th re e Chapter Three Intra-African Agricultural Trade Tariffs faced by RECs (intra-REC and extra- REC trade) Figure 3.25 shows the level of protection for the five processed products and their unprocessed sources using the average tariff rates imposed by African countries on different RECs. All products face average intra-African tariff rates ranging from a low of 9.5 percent for tea to around 18.4 percent for cigars and 15.7 percent for wheat flour (Figure 3.24a). The share of intraregional trade in total imports is higher for tea where tariffs are lower. When we compare tariffs faced by RECs, tariffs imposed on tea are lower in ECCAS, COMESA, SADC, and EAC where tea is exported primarily within RECs (Figure 3.25). In contrast, AMU and ECOWAS face greater tariff constraints to exporting tea within Africa. Looking across all these products, ECOWAS countries can trade freely within the region but face higher tariff barriers outside of the REC, with higher tariff rates for all the processed products except palm oil. Figure 3.25 Tariffs imposed by Africa to RECs for selected processed products, 2019 19 19 17 29 22 5 18 18 14 17 17 22 17 12 12 34 15 23 10 11 9 24 12 17 22 15 12 30 16 25 0 5 10 15 20 25 30 35 40 COMESA EAC ECCAS ECOWAS SADC AMU Ta rif f r at e ( % ) (a) Processed Cigars and cigarettes Palm oil Sugar Tea Wheat flour 5 7 13 19 8 12 5 4 5 5 3 1 17 4 9 11 4 7 10 13 15 21 14 17 4 2 5 5 7 1 0 5 10 15 20 25 30 35 40 COMESA EAC ECCAS ECOWAS SADC AMU Ta rif f r at e ( % ) (b) Unprocessed Tobacco, unmanufactured Palm Oil Sugar Tea Wheat and meslin Source: Constructed from the MAcMap-HS6 database. Note: COMESA = Common Market for Eastern and Southern Africa; EAC = East African Community; ECCAS = Economic Community of Central African States; ECOWAS = Economic Community of West African States; SADC = Southern African Development Community; AMU = Arab Maghreb Union. 76 Africa Agriculture Trade Monitor / 2022 Report Chapter Three Intra-African Agricultural Trade Tariff escalation As trade in processed agricultural products is growing faster than in primary agricultural products, it is interesting to look at the impact of trade policies on tariff escalation (that is, an increase in tariffs along processing chains). For example, Figure 3.25 shows that in Africa, average tariffs for cigars and cigarettes are three times higher than for unmanufactured tobacco. The same holds for palm oil, sugar, and wheat, for which processed products are subject to much higher tariffs (two to three times those on unprocessed products). The disparity is even greater at the REC level for palm oil and wheat, where tariffs are six and seven times higher on average. AMU shows the greatest impact: processed palm oil and wheat flour face tariffs 26 and 18 times higher, respectively, than palm oilseeds and unprocessed wheat. At the regional level, Figure 3.24b also highlights lower tariffs on unprocessed products within regions or blocs. However, as was the case Africa-wide (recall Figure 3.22), tea is a different case and does not face escalating tariffs in Asia and LAC. Lessons could be learned from the experience of Asia, where unprocessed products are more protected in order to promote val- ue addition and export diversification. In summary, tariff escalation prevails for most of the products selected. It is more pronounced in commodity sectors like palm oil and wheat, which are largely imported. Therefore, reducing tariff escalation is considered critical, especially for countries dependent on exports. Some evidence shows that tariff escalation has the potential to hinder the growth of agricultural processing in exporting countries. It reduces demand for more processed imports from exporting countries, and hence limits the expansion of their processing industries and export diversification (Elamin and Khaira 2003; Cheng 2007; Antràs et al. 2022). Analysis of NTMs for major processed products In addition to tariffs, nontariff measures (NTMs) present serious barriers to intra-African trade. NTMs comprise a range of trade-related policy measures that can be broadly classified as import-related measures — including sanitary and phytosanitary (SPS) measures, technical barriers to trade (TBTs), pre-shipment inspections and other formalities, and nontechnical measures such as subsidies and rules of origin — or export-related measures. NTMs can serve important goals, such as SPS measures put in place to ensure food safety and protect human, plant, and animal health. They can facilitate trade in some cases. For example, Bouët and Sall (2021) found that SPS regulations related to meat in Burkina Faso and Côte d’Ivoire had a positive impact on trade, likely due to the importance of sanitary certificates in informing consumers about product quality. However, many studies have found NTMs to be strongly trade-reducing on balance, with more severe impacts than tariffs (Cissé, Kurtz, and Odjo 2020; Nguyen, Bouët, and Traoré 2022). Reducing the negative trade impacts of NTMs is considered key to realizing the potential benefits of the AfCFTA (UNCTAD 2019; Bouët and Sall 2021; also see Chapter 5 in this volume). 77Africa Agriculture Trade Monitor / 2022 Report Ch ap te r Th re e Chapter Three Intra-African Agricultural Trade For each of the five selected processed products, Table 3.8 shows the number of NTMs imposed by and affecting reporting countries in Africa, the Asia-Pacific region, and Latin America and the Caribbean. The table focuses on two of the most common categories of import-related NTMs — SPS measures and TBTs — that create challenges of compliance for exporting countries. It should be noted that the number of NTMs does not indicate the actual impact of NTMs on trade; in addition, the numbers reported in the table only reflect NTMs imposed by countries that reported their policy measures to the United Nations Conference on Trade and Development (UNCTAD). However, the table can be instructive in comparing the incidence of NTMs across products and types of measures. It shows that sugar and palm oil are affected by far higher numbers of NTMs — over 4,000 — than the other three products, for which NTMs number in the hundreds. The majority of NTMs imposed on sugar and palm oil, as well as tea and wheat flour, are SPS measures; cigars and cigarettes are the only product that do not face SPS measures. Although the incidence of NTMs has some relevance, the impacts of NTMs are better assessed by estimating their ad valorem equivalents (AVEs) — that is, the tariff rate that would have an equal impact on trade to that of the NTM. Table 3.8 also shows average AVEs for each NTM- imposing region (Nguyen, Bouët, and Traoré 2020).9 The estimated AVEs are similar to, or in several cases higher than, the tariff rates shown in Figures 3.22–3.25, suggesting that NTMs may reduce trade to a greater extent than tariffs for some products. For several of the selected products, SPS measures imposed by Africa and the Asia-Pacific region present similar burdens, while those imposed by LAC countries have higher AVEs than those of the other regions. TBTs imposed by countries in the Asia-Pacific region for tobacco products, sugar, and milled cereals have high AVEs of around 70 percent or more, while those imposed by African countries for sugar have the lowest AVEs at 36 percent. 9 The AVEs presented are calculated at the HS2 product level, and thus refer to products at a more aggregated level and include both processed and unprocessed products. AVEs listed for cigars and cigarettes correspond to tobacco products; those listed for palm oil correspond to fats and oils; those listed for sugar correspond to sugar and confec- tionary; those listed for tea correspond to coffee, tea, mate, and spices; and those listed for wheat flour correspond to milled cereals. Photo by AMISOM via Iwaria 78 Africa Agriculture Trade Monitor / 2022 Report Chapter Three Intra-African Agricultural Trade Table 3.8 Number of bilateral NTMs in Africa, Asia, and Latin America, selected products Partner facing Sanitary and phytosanitary (SPS) measures Technical barriers to trade (TBT) Africa Asia- Pacific LAC Total AVE (%) Africa Asia- Pacific LAC Total AVE (%) Country imposing Cigars and cigarettes         165 121 84 370 Africa     Asia-Pacific   165 121 84 370 79 LAC     Palm oil 1,867 1,386 977 4230 162 123 84 369 Africa 649 493 336 1,478 54 162 123 84 369 0.55 Asia-Pacific 1,218 893 641 2,752 49   LAC     Sugar 2,338 1,865 1,289 5,492 478 377 248 1103 Africa 1,081 823 560 2,464 40 324 246 168 738 36 Asia-Pacific 1,257 1,042 718 3,017 44 99 89 61 249 70 LAC 11 11 67 55 42 19 116 46 Tea 108 84 140 332         Africa 108 82 56 246 42   Asia-Pacific 2 84 86 46   LAC   68   Wheat flour 108 294 56 458   1   1 Africa 108 82 56 246 45   Asia-Pacific 212 212 47 1 1 69 LAC     Source: Numbers of NTMs are constructed from the UNCTAD TRAINS database. Data on AVEs are constructed from Nguyen, Bouët, and Traoré (2020). Note: A bilateral nontariff measure (NTM) is a measure imposed by one country on another. The same NTM imposed on more than one country will be recorded in the table as more than one bilateral NTM. The year of data collection on NTM incidence ranges from 2012 to 2021; most NTM data reported in the table were collected in 2020. Ad valorem equivalents (AVEs) are average values for all countries in the listed region with available data; products are at the HS2 level. 79Africa Agriculture Trade Monitor / 2022 Report Ch ap te r Th re e Chapter Three Intra-African Agricultural Trade For most products, reporting countries in the LAC region both impose and face fewer NTMs than reporting African and Asia-Pacific countries. However, the NTMs imposed by LAC countries pose particularly high burdens in some cases, as suggested by high AVEs associated with SPS measures. The NTMs imposed by Africa tend to have lower AVEs than those imposed by countries in other regions. However, with the exception of wheat flour, African countries are affected by more NTMs than countries in the Asia-Pacific and LAC regions. Countries from all regions — Africa as well as the Asia-Pacific and LAC regions — impose more NTMs on African countries than on other regions. This underlines the fact that NTMs not only pose challenges for Africa’s global exports but also constitute a major barrier to intra-African trade. Beyond the NTMs discussed above, others such as customs and documentary related procedures, processing time at border posts, quality of roads, and efficiencies at ports can raise the cost of trade. Figure 3.26 focuses on the time and cost associated with border and documentary compliance within the overall process of exporting or importing goods. Border compliance includes compliance with customs regulations, regulations relating to other required inspections, and handling taking place at borders. Documentary compliance captures the time and cost associated with compliance with the paperwork requirements of all government agencies of the origin economy, the destination economy, and any transit economies. Time allocated for documentary and border compliance is clearly higher in Africa than in other regions. Time to import was around 126 hours for border compliance and 96 hours for docu- mentary compliance in 2019. Compared with 2014, this was a decrease of around 8 percent for border compliance and 22 percent for documentary compliance. The same pattern holds on the export side, where time to export is estimated at 97 and 72 hours for border and docu- mentary compliance, respectively. Costs to import and export — for obtaining, preparing, presenting, and submitting documents — is much higher in Africa than other regions. Costs in Africa range from an average of US$173 for costs related to documentary compliance for exports to nearly $700 for costs related to border compliance for imports. Therefore, facilitating and coordinating cross-border trade within the region through mutual administrative assistance and reduction of the costs associated with NTMs is important to pro- mote the free movement of goods and increased intra-African trade. Photo by Emmanuel via Iwaria 80 Africa Agriculture Trade Monitor / 2022 Report Chapter Three Intra-African Agricultural Trade Figure 3.26 Time and cost of imports and exports in Africa, East Asia and Pacific, and LAC, 2019 (a) Time requirements 0 20 40 60 80 100 120 97 53 72 38 35 63 56 96 47 55 43 126 140 Time to export, border compliance Time to export, documentary compliance Time to import, border compliance Time to import, documentary compliance Ho ur s Africa East Asia & Pacific Latin America & Caribbean (b) Financial costs 0 100 603 382 509 173 108 99 691 417 618 287 104 106 200 300 400 500 600 700 800 Cost to export, border compliance Cost to export, documentary compliance Cost to import, border compliance Cost to import, documentary compliance US d oll ar s Africa East Asia & Pacific Latin America & Caribbean Source: World Bank (2022). 81Africa Agriculture Trade Monitor / 2022 Report Ch ap te r Th re e Chapter Three Intra-African Agricultural Trade CONCLUSION In this chapter, we assessed trends and patterns in intra-African trade, with a focus on processed agricultural products. In addition to analyzing intra-African trade flows in values, the chapter looked at the caloric, protein, and fat content embedded in trade flows. We also examined five regionally traded processed products, including their level of competitiveness and trade networks, and assessed the level of tariff and nontariff barriers using the Asia-Pacific and LAC regions as benchmarks. Our findings show a decline in the intra-African trade of agricultural products in 2020. In addition, we note the heterogeneous contribution of RECs to the overall intracontinental trade of processed products. SADC countries lead in this area, with more than half of the total processed exports. In terms of processing stage, processed products predominate in intra-REC trade, while unprocessed and semi-processed products are the most traded outside the REC countries. The exception is AMU, which primarily trades processed products with other RECs. We conclude that food industries may be less competitive outside the region of production, especially for ECOWAS and ECCAS countries. The analysis of the nutritional content in trade shows that the share of total intra-African agricultural trade in terms of caloric content was similar between the two periods (2003–2005 and 2018–2020). However, the fat and protein content fell over time. This is consistent with the declining share of fats and oils and livestock products in trade. Results also reveal that processed products accounted for 42 percent of calories, 76 percent of fats, and 55 percent of proteins traded within Africa over the three-year 2018–2020 period. Processed products account for higher shares of protein and especially of fats than of calories or of trade value in total intra-African trade, suggesting that the most commonly traded processed products are rich in proteins and fats. As we have seen in previous AATM reports, at the country level, trade competitiveness in semi- processed and processed products varies among RECs. For most RECs, their highest levels of competitiveness are in niche products that account for very small trade shares. An exception is tea, which plays an important role in intra-African processed trade and for which EAC is highly competitive. Although participation in intra-African trade networks for key processed products is widespread, limited numbers of partners and transactions account for a large share of trade values. Trade in tea is especially concentrated. Most of the trade in key processed products takes place within geographic regions, reflecting the importance of geographic proximity and REC memberships in trade relationships. For most of the processed products examined, Southern Africa is the most successful at exporting outside its geographic region. Finally, we looked at some external factors, including tariffs and NTMs, that are limiting trade within the continent. Findings show that intra-African imports are subject to lower tariff rates compared to tariffs imposed by the Asia-Pacific, LAC, and BRICS regions for most of the focus products. Although African imports from Asia face higher tariff barriers on all selected products, the continent depends heavily on imports of cigars and cigarettes and palm oil from Asia. This tariff structure should serve as a foundation for homegrown industries by inducing African countries to buy goods produced regionally. We noticed also that tariff escalation prevails in most of the selected products, especially for palm oil and wheat, which are largely imported. Therefore, reducing tariff escalation is considered critical, especially for countries dependent on exports. While this practice can afford significant protection to processed products in importing countries, it can reduce demand for processed agricultural products. 82 Africa Agriculture Trade Monitor / 2022 Report Chapter Three Intra-African Agricultural Trade NTMs, despite contributing to important goals in many cases, tend to be trade-limiting to a greater extent than tariffs. Countries from all the regions we examined — Africa as well as Asia-Pacific and LAC — impose more NTMs on African countries than on other regions. This underlines the fact that NTMs not only pose challenges for Africa’s global exports but also constitute a major barrier to intra-African trade. Other factors such as costs and time required for border and documentary compliance are also significantly higher in Africa than in other regions and present additional constraints for intra-African trade. Overcoming these barriers can facilitate formal trade and also contribute to efforts to formalize informal trade flows. With increasing incomes and urbanization, demand for processed food products in Africa will continue to expand. Increasing intra-African trade in processed products represents an important channel through which producers and processors on the continent can access rapidly growing African markets. Implementation of the AfCFTA agreement and other efforts to boost intra-African trade must address both tariffs and NTMs that impede trade in processed agricultural products, as well as other limiting factors such as the quality of trade and transport infrastructure. At the same time, it will be important to assess the impacts of increased trade and consumption of processed agricultural products on nutrition. Processing can preserve and even enhance the nutritional content of food, for example, through fortification. However, in other cases key nutrients may be lost during processing, and some processed agricultural products have unhealthy levels of sugar, fat, and sodium. 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