Product Standards and Africa’s Agriculture Exports


The Comprehensive Africa Agricultural Development Programme (CAADP) focused topic in this study is the trade policies and competitiveness. The importance of trade policies to Africa’s agricultural exports cannot be overemphasise in the light of various market access conditions that these exports are facing (which affects its competitiveness in the global market) and the domestic policies that would boost investment in the sector and thereby enhanced production. Trade policy in its simplest form means the policy that is put in place to regulate and guide the conduct of trade in any particular country. The need that necessitates policy on trade is to control, regulate and coordinate both the inflow and outflow of goods and services. The coordination and regulation of trade through the laid down policy help the state to monitor the inflow and outflow of goods and services and to evaluate the appropriateness of such flows to the development aspirations of the country. Also, in the process of regulating trade, revenue will be generated through the imposition of border taxes. In the light of this, trade policy contributes to revenue generation of the state and in turn economic growth.

Trade policy is an important issue in the context of international trade, which has become the basis of trade negotiations at both bilateral and multilateral trade levels. However, the type of trade policy that will be put in place will highly be influenced by the socio-economic and political orientation as well as the ideology of the ruling government. While a socialist or communist government would prefer a protective trade policy, a so –called capital or mixed economy would want to prefer some level of liberalized trade. Irrespective of the ideological orientation of the government, one thing that is certain is that the trade policy adopted in any country will be influenced by the policy adopted by its trade partners and its integration at both regional and multilateral levels. Africa’s trade partners policies on trade would determine the extent of accessibility the continent’s agricultural exports would have in their markets, likewise its domestic trade policy will influence production and export base of the continent.

In addition, the choice of this study is justified with the relevance of trade policies and competitiveness in influencing the participation of smallholders in global trade through expansion of agricultural export base and improvement in market access as a result of improve and appropriate trade negotiations and agreements. More so, there is the need for Africa to remove its administrative and trade barriers. Further, many of the continent’s trade partners imposed trade restrictions on exports of importance to Africa and thereby inhibiting Africa’s exports access to their markets. Also, the trade preferences granted to the continent have not yielded the required dividends. To this end, international trade regimes need a comprehensive reform such that developing countries could gain from trade. Thus, Africa needs improved trading infrastructure and more agricultural investments that would have a great influence on the extent of domestic export base and its competitiveness in all markets from domestic to regional and global. It is as a result of this that this study finds it imperative to identify and assess the various hindrances to the proposed and implemented trade policies under the CAADP.   

Statement of Research Problem/Question

The developmental aspiration of developing countries, especially African countries to achieve sustainable growth and poverty reduction is linked in part to their interaction and integration to the rest of the world. Integration into global market by the poorer countries offers the opportunity and potential for rapid growth and reduction in poverty (Martinez and Poole, 2004). It is widely recognised that trade serves as a veritable channel with which countries can interact or relate economically. Global trade has been acknowledged by many theorists; especially the orthodox ones, to have been beneficial and countries could gain from their participation. These theorists based their propositions on the premise that there will be trade flows among/between participating countries. However, in reality, this is often not the case as there are various trade barriers to some key exports, especially those that developing countries and particularly Africa, has comparative advantage. As a result of these trade policies, Africa found it difficult to take full advantage of the opportunities embedded in global trade. Among these trade policies that inhibit trade flow between/among countries are the non-tariff barriers (NTBs) and specifically product standards. According to Kareem (2010), the non-tariff barriers constitute the most significant trade barriers or restrictions that Africa’s exports face in the markets of their trade partners.

The theory of comparative cost advantage advises countries to specialise in order to realise gains from trade. African agricultural exports during the 1950s and 1960s performed relatively well in terms of the volume and the number of products, while the issue of trade barriers, especially non-tariff barriers to their exports in the markets of their trading partners did not arise. As a result Africa’s comparative strength lay in the production of primary products that in these times attracted fewer restrictions in the developed nations’ markets (especially in the markets of the former colonial powers). However, from the 1970s until 2000, most of the countries of Sub-Saharan Africa (SSA) – except for the Republic of South Africa, which faced a politically motivated trade embargo – experienced decades of stagnation. The tightening of internal agricultural policies that subsidised farming in the United States and the expanding European Union undermined Africa’s comparative advantage in agricultural products in these regions of the world. To mitigate this problem, African government through the African Union (AU) New Partnership for African Development (NEPAD) initiated the Comprehensive Africa Agriculture Development Programme (CAADP) to strengthen and enhance Africa’s agriculture production through sustainable interventions by African governments in order to accelerate and promote agricultural production for export. In order to do this, the CAADP has put in place a policy that ensures that each member countries allocate 10% of national budget to agriculture investment/sector so as to attain 6% average annual growth rate of the economy.

This CAADP policy in agriculture investment is yielding dividends, because there has been relative increase in Africa’s agricultural products exports (CAADP Pillar 2 Document). However, the major hindrances to market access of Africa’s agricultural exports are the trade policies in the continent’s trading partners’ markets. Specifically, the issue of tariffs and non-tariff barriers has been seen as germane to market access of Africa’s exports. Of this, trade policies, studies have shown that the magnitude of the impact of tariffs is very minimal due to the fact that most of exports of Africa origin are been granted preferential tariff rate. The main restriction to Africa’s exports access to develop and developing countries’ markets is the non-tariff barriers, and specifically the product standards. Most of Africa’s exports do not meet the required standards set by these countries for any product coming to their markets. This is because Africa does not have the technical wherewithal in terms of advanced technology and sciences to produce products of quality standards that will meet international product standard requirements. The imposition of these market access conditions on agricultural exports, especially those that African countries have comparative advantage had hindered the extent to which the sector contribute to overall income growth in the rural areas, stimulate growth in other sectors of the economy through the expansion of goods and services demanded from these sectors. Also, it has restricted the degree with which earnings on agricultural exports could be used to reduce poverty, hunger, and overall malnutrition levels in the continent. To this end, efforts made by African governments through CAADP to mitigate these market access barriers are not yielding expected results due to the fact that the already defined and detailed set of project activities in the programme did not allowed for a decentralised and bottom-up implementation. Also, its guidelines have not all been adopted yet, while the peer monitoring and learning among African countries have been minimally utilised. This is because CAADP is seen sometimes as a parallel to the national policy processes. Furthermore, CAADP procedures for implementation are still very rudimentary and weak, more so, capacity is inadequate in many ways. Thus, CAADP is seen as being far from fulfilling the expectation that is embedded in it, which is to become the centre of all "green" policy areas for agriculture-based industrial policy and food security.

However, most studies modelling the actual distortions to trade due to trade barriers have focused on the impact of tariff barriers on trade flows between developing and developed countries, i.e. south–north trade with capital and consumer products flowing in one direction and primary products in the other. More so, there are very few studies that have examined the effects of non-tariff barriers on trade flows among these trade partners. Aside this, there are scanty specific studies that determine the impact of product standards on exports of relative importance to African countries despite the importance of this issue. It is as a result of this that this study tends to close these gaps by determining the effects of products standards in the European Union’s market on Africa’s exports in the light of the CAADP agenda. This study is motivated with the following research questions: do product standards matter in trade, especially trade between Africa and the European Union (EU)? Can CAADP be use and to what extent can it mitigate this problem? Do African governments comply and implement CAADP agenda? Are regional and national strategies aligning with the CAADP agenda? Is there policy dialogue at regional and national levels on the implementation of CAADP agenda? What kind of policy should be put in place for smallholders to improve their participation in global trade? To what extend will trade and trade policy enhance trade in the light of improve export base? What is CAADP doing to build partnership and alliances with institutions and individual pillars? Lastly, what are the bottlenecks that inhibit effective implementation of the policy proposed and implemented under the CAADP agenda?

Empirical studies on trade policies (see Mayer and Zignago, 2005; Sanguinetti, Traistaru, and Martincus; 2004) mostly estimated the extent to which Africa has gained from tariff preferences granted to the continent. Studies modelling the actual distortions to trade due to non-tariff barriers have focused on trade flows mostly between developed and developing (see Shepherd and Wilson, 2010), while only very few of them concentrated on sub-Saharan Africa, which need to be updated. However, scanty studies exit on the effects of product standards on Africa’s agricultural exports, especially how these effects could be mitigated by CAADP. It is against this background that this study aims to fill the gaps in the literature by conducting a systematic assessment, which shall identified the major bottlenecks affecting the efficiency of the existing policies proposed and implemented under the CAADP agenda and determine the extent to which product standards in the European Union market have affected Africa’s exports. 

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