The Advent of the AfCFTA: New Possibilities and Implications for the African Land-Water-Climate-Food Nexus

Jason Levin-Koopman, Caitlyn Carrico and Benedetta Falsetti

No 333292, Conference papers from Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project

Abstract: The African Continental Free Trade Area (AfCFTA) was signed in 2018, and came into effect in 2019. One important effect of the implementation of the AfCFTA will be the reduction of tariff barriers to inter-regional trade which is expected to have an impact on the agricultural and food system. Reduced tariffs will lead to lower food prices which will affect food and nutrition access. At the same time, as the access to regional markets are anticipated to open up, farmers may be drawn to change the crops they grow as well as the intensity of irrigation and fertilizer used or to expand production into land previously unused in agriculture. These changes will have an impact on the land and water systems as well as the greenhouse gas emissions resulting from agricultural activity. In this study, we employ the MAGNET computable general equilibrium model to examine the possible impacts of the AfCFTA on the land, water, food and climate nexus in Africa with a particular focus on Burkina Faso. Preliminary results show that at the macro-economic level, with the implementation of the AfCFTA, GDP is expected to increase across the continent. This increasing wealth comes from the increase in industry trade and hence the increases in manufacturing production expansion. In Burkina Faso this increase in manufacturing pulls resources away from agriculture which increases the cost of production and reduces output. While there are a myriad of factors which account for this, we importantly note that additional complementary domestic policies may be key to the success of the AfCFTA from a country level.

Keywords: International; Relations/Trade (search for similar items in EconPapers)
Date: 2021
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