High tariffs on agriculture block intra-Africa trade, driving $100 million food imports

High tariffs on agricultural produce are stifling intra-Africa trade, leaving countries to import food from Europe, America and Asia, rather than from African peers.

Yet there is a need to feed 2.2 billion people by 2050, while addressing Africa’s $60 to $80 billion annual food import bill.

Wamkele Mene, Secretary-General of the African Continental Free Trade Area (AfCFTA), said the continent imports over $100 million worth of food annually, comprising rice, maize, soya, and different types of grains. 

“The highest import tariff that we as Africans impose over one another is 65 percent on agricultural products,” he told the Africa Food Systems (AFS) Forum 2024 recently held in Kigali.

“If you look at the range of what we call tariff peaks, the largest and the highest tariffs are what we impose against one another (in Africa) on agricultural products and yet we are importing $100 million worth of food from other parts of the world.”

Some African countries are still importing wheat from Ukraine, even as Mr Mene insists there is a surplus on the continent.

“If you go to Zimbabwe and Ethiopia, they had a surplus of wheat. The barrier that we must eliminate as a matter of urgency is intra-Africa prohibitive tariffs for trading in basic agricultural products. This is the number one challenge,” Mr Mene said.

Trade-related barriers

For the vast majority of people in Sub-Saharan Africa, agriculture is the basic source of income, contributing an average of 15 percent to the region's GDP. But, across the continent, about 278 million people are facing severe food insecurity.

Local trade-related barriers, which hinder food movement from excess production areas to nearby regional consumer markets, are contributing to a food deficit.

The Kigali forum highlighted factors that limit food availability for intra-Africa trade, citing the supply side, low agricultural productivity, inadequate policy frameworks, limited investment in production capacity, lack of insurance, and restricted access to agricultural inputs for farmers. 

Additionally, high transportation costs due to poor infrastructure and a lack of storage facilities make it difficult to move surplus food to areas with high demand. 

Infrastructure and post-harvest storage solutions that are necessary to facilitate the efficient movement of agricultural products across borders are lacking.

Further, a severe food crisis is intensifying across Africa, driving millions of people into a heightened risk of hunger and starvation.

Feeding Africa

Nearly 55 million people in West and Central Africa struggled to feed themselves in the June-August 2024 lean season, according to the March 2024 Cadre Harmonise food security analysis released by the Permanent Inter-State Committee for Drought Control in the Sahel (CILSS).

But, according to Mene, the reduction of intra-African trade barriers, particularly on agricultural products, should unlock new markets and tackle the continent’s food challenges.

“Millions have been pushed into poverty, but African countries have the potential to feed the continent,” he said.

The 2024 Africa Agriculture Status Report (AASR24), which focuses on the role of the private sector in African food systems, shows that conflict, extreme weather events, poverty and instability collectively drive hunger in Africa. 

According to the United Nations Deputy Secretary-General Amina J. Mohammed, who is also the Chair of the United Nations Sustainable Development Group, hunger has worsened substantially in Africa partly due to climate change. 

“Around 280 million people are undernourished, an increase of 57 million people since the Covid-19 pandemic. Small farmers are affected every year by climate-related weather events, with losses estimated at $670 million per year,” she said. “Food systems are one of the systems that require massive investment and financial stimulus. It’s time to transform words into action.”

Window of opportunity

James Mwangi, CEO of Equity Group Holdings Ltd, said there is a window of opportunity. 

“The global geopolitics has disrupted the global supply chain and that gives Africa an opportunity to fill those supply chains with its own production,” he said, citing Ethiopia and Zimbabwe who, before Covid, were importing wheat and now they are exporting it.

Intra-African trade is also affected by the low execution of beneficial policy frameworks. 

An example is the 2014 Malabo Declaration, which encouraged the tripling of intra-Africa trade in agricultural commodities and services by 2025. This initiative called for establishing a continental free trade area under the Comprehensive Africa Agriculture Development Programme (CAADP). 

Despite the promising initiatives, intra-African food trade remained low.

“There must be a coherent policy position that is integrated and makes agriculture a productive economic sector not a social sector. But it will not happen until you review the capacity of the farmer,” Mr Mwangi said.

“The people we are talking of feeding Africa are not peasant farmers, but commercial farmers.”

He suggested a shift by the political leadership to empower the small-scale farmers into commercial production.

“How do we convert our small-scale farmers to be agro business? It is just a shift from peasant farming to agribusinesses and they populate the value chain and then they become competitive and then they are able to play in the market,” the Equity Bank boss said.

“At the moment, the structure is designed to make them fail, it's designed to make Africans never to feed themselves. So, it’s upon the leaders to make that political change.”

Another challenge is the inability of the small-scale farmers to access credit.

Dina Esposito from the US Agency for International Development, said that three out of four African agri-SMEs cannot access formal bank loans, yet they are too large for microfinance, contributing to an estimated $74 billion gap in unmet demand for financing.

Altogether, SMEs have received $142 million in Aceli-supported loans, enabling them to create market access for 843,000 smallholder farmers and employment for 25,000 full-time workers.