Abdelmonem Fawzi
The war in Ukraine will likely have its heavy toll on food supplies in our continent.
Conflict developments can impact African economies and cause harm to vulnerable African states. We need to be aware of that.
For several African countries, high dependence on wheat imports from Russia or Ukraine poses a further immediate concern.
Jointly, the two countries constitute almost 30% of global wheat exports.
Investors and market analysts have expressed wariness about Russia blockading Ukraine’s Black Sea ports, which would prevent Ukraine from exporting the remainder of last season’s wheat harvest.
As noted in a recent analysis in Foreign Policy magazine, much of Ukraine’s most fertile agriculture land is in the east of the country where Russian attacks commenced.
Moreover, some experts have warned that should the war drag on for long, Russia could also impose export tariffs on its wheat to boost its food security.
When Russia annexed Crimea in 2014, wheat prices increased by 25% for two months.
Due to current geopolitical tensions, all major wheat exporters reported higher prices over the past month.
However, our continent struggles already to recover from the impacts of a deadly pandemic. It is also struggles to mitigate the effects of a worsening climate crisis that is driving Africans deeper into poverty.
The main question now is: Why are we so vulnerable to the effects of problems that happen in the outside world?
Our main problem is that our countries continue to trade more with the outside world than among themselves, according to the findings of an assessment report by the Economic Commission for Africa (ECA) on progress made on regional integration.
The report was presented during the 39th ECA Committee of Experts.
Stephen Karingi, director of the Regional Integration and Trade Division at the ECA, said while presenting the report findings, that Covid-19 had severely disrupted the implementation of regional integration initiatives, including the African Continental Free Trade Area (AfCFTA), particularly trade through national border closures.
“The implementation of regional integration continues to be hampered by governance, peace and security challenges,” Karingi said.
Digitalisation is key in maintaining trade competitiveness and enabling effective participation in cross-border e-commerce.
In 2018, the report says, Africa accounted for only 2.6% of global trade, which is a slight increase from the 0.2% registered in 2017.
Intra-African trade increased to 16.1% in 2018 ($159.1 billion), up from 15.5% in 2017.
Globally, output slightly decreased to 3.6% in 2018 from 3.8% in 2017.
While progress continues to be made in pursuit of the continent’s regional integration agenda throughout the eight Regional Economic Communities (RECs), challenges to the achievement of deeper integration remained.
In particular, most RECs and member states are struggling to achieve progress in the area of productive integration.
Karingi noted that before the Covid-19 pandemic, there was a rise in intra-trade in Africa, but it remained low compared to other regions.
“Trade, the economic movement of people and services, infrastructure, governance, peace and security are the key pillars of regional integration,” Karingi said.
He added that many countries were doing a lot to implement the ACFTA.
“Peace and security create environments conducive to the pursuit of regional integration and the attainment of broader continental development objectives,” he said.
The ECA Director said that progress on integration was uneven, adding that the free movement of people was critical for the realization of the ACFTA.
The report presents an assessment of progress on regional integration in Africa with a particular focus on progress made by RECs in key dimensions of regional integration, including macroeconomic integration; productive integration; trade integration; infrastructure integration; the free movement of people; and governance, peace and security.
In all RECs, productive integration was the poorest performing dimension of regional integration.
“Most communities lag in terms of intra-regional intermediate exports and imports,” Karingi said.
“They record a very low merchandise trade complementary index,” he added.
Karingi noted that productive integration was central to enhancing industrialisation and trade.
“Productive integration is also critical to integrating African economies into regional value chains and global value chains, as envisioned in Agenda 2063,” he said.
According to the report, the Arab Maghreb Union (AMU) and East African Community (EAC) are taking the lead in productive integration.
Despite the low performance of the majority of the RECs on productive integration, several initiatives are carried out to improve the situation, including some that are supported by ECA.
The Economic Community of Central African States (ECCAS) and EAC are the highest-performing communities in terms of macroeconomic integration, with scores of 0.684 and 0.660, respectively, on the index.
Karingi said the ECA would continue to support RECs in mainstreaming and boosting intra-African trade in their programmes and policies, building on collaborative work on regional industrialization, as has already been initiated in SADC and ECOWAS.
The most important step is to broaden our capacity-building programmes on the use of macroeconomic and forecasting models in economic planning and development to empower member states and RECs; support the AfCFTA ratification drive and implementation, including through awareness-raising programmes and developing national implementation strategies.
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