The Effects of AfCFTA on Food Security Sustainability: An Analysis of the Cereals Trade in the SADC Region

Abstract

The signing of the African Continental Free Trade Agreement (AfCFTA) has stimulated a lot of trade potential in Africa that could see the continent significantly improving its intra-trade levels, thereby boosting the economic welfare of Africans. In light of food security sustainability in the Southern African Development Community (SADC) region, this paper employed the World Integrated Trade Solution, Software for Market Analysis and Restrictions on Trade (WITS-SMART) simulation model to assess the potential effects of the AfCFTA on trade in cereals. Cereals have been regarded as the most critical component of food security. The model indicated trading partners for each of the 15 SADC countries, their level of trade creation, trade diversion, consumer surplus, welfare and revenue effects of any regional trade agreement. The results indicated that the AfCFTA will only lead to positive outcomes in four (Angola, the Democratic Republic of Congo, Madagascar and Namibia) of the fifteen SADC countries, with the rest remaining unchanged. In general, previously closed economies, that is, economies which were not part of a free trade agreement (FTA) or a deeper arrangement will stand to gain more than open economies because they are already opened up at the free trade level, which is equivalent to the AfCFTA. Thus, as far as cereals and food security is concerned, the AfCFTA will add minimal value. However, the overall value gains are likely to be greater when all food categories are included in the simulations. In general, the study recommends that African countries should deepen their integration levels to perhaps common markets where production factors, that is, labour and capital, become mobile. This will have multiplier effects in improving continental food security sustainability from a trade perspective.

Potentials of the African Continental Free Trade Area: A combined partial and general equilibrium modeling assessment for Central Africa

“…In all of the scenarios, the socio-economic gains outweigh the losses in tariff revenue for all of the countries of Central Africa. This finding is compatible with those of other studies (Abrego et al, 2020;Mevel & Karingi, 2012;Pasara & Diko 2020;Saygili et al, 2018) according to which integration can significantly contribute to economic development. Liberalization leads to gains in welfare in the form of annuities for the consumer as well as for the | 459 producer, and efficiency gains resulting from better access to imported products, as well as greater specialization and economies of scale.…”

Trade Facilitation and Its Impacts on the Economic Welfare and Sustainable Development of the ECOWAS Region

“…It permits one to obtain an approximate measurement of the change in consumer surplus from trade policy changes. This model has been used to evaluate the welfare impacts of signing the African Continent Free Trade Area (AfCFTA) on food sustainability in the Southern African Development Community (SADC) [57]. The demand elasticities employed in the current versions of the WITS-SMART simulation model are those proposed by Kee, Nicita, and Olarreaga (2008) [58].…”

Economic Growth, Governance and Educational Sustainability: A VAR Analysis

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