ADDIS ABABA – African countries urged to use the innovative Africa Exchange Trade Platform (ATEX) and boost digital trade in critical commodities under the Africa Continental Free Trade Area (AfCFTA).
ATEX is a digital business-to-business (B2B) and business-to-government (B2G) exchange platform developed by ECA and the African Export-Import Bank (Afreximbank), in collaboration with the African Union and the AfCFTA Secretariat.
“ATEX will certainly avail access to essential commodities at affordable prices to African countries that look set to be hit the hardest by the global food price crisis with severe implications on economic and political stability,” said Hanan Morsy, Deputy Executive Secretary and Chief Economist of the UN ECA.
Morsy made a case for the trade platform in her presentation, entitled the ‘’Finance for climate resilient trade and Africa Trade Exchange ATEX: Pathways toward a Greener Africa’ in a meet held on the sidelines of COP27 at Sharm El Sheikh.
The chief economist said the digital platform was an opportunity for African countries to collaborate in boosting commodity trade as a response to the multiple challenges of climate, fertilizer and food crisis.
“Africa needs to leverage the AfCFTA and available climate financing to enhance the resilience of the African food system and mitigate vulnerability to disruptions in global food supply,” said Morsy.
The global climate crisis has affected food security, imperative for African countries to enhance food production through the supply of critical inputs such as fertilizers.
Morsy noted that climate change has increased and amplified risks to food security for the most vulnerable countries. Four out of the eight key risks induced by climate change have direct consequences on food security.
Besides, inflation in most African countries continues to rise with many of them facing double digit inflation rates, reaching well above 20 per cent. This comes on the back of sustained global high food and fuel costs, supply chain disruptions and the ongoing Ukraine crisis
“One of the main implications is that the global fertilizer prices have significantly risen over the last year because of surging input costs, supply disruptions, and export restrictions,” Morsy said, warning that price spike in fertilizers and shortage would affect the planting season in 2023 unless urgent action was taken to channel the fertilize where it is needed most in Africa at an affordable price.
“Africa should activate its Marshall Plan, the African Continental Free Trade Area (AfCFTA)” Morsy told participants, explaining that the full implementation of the AfCFTA will boost intra-African trade by nearby 40% in 2045. with the agrifood sector namely cereals and crops, milk and dairy product, sugar, and processed food experiencing the most gain.
“Our presence here is a testimony of our support to ATEX and most particularly its emergency response phase as an African-driven response to the global food crisis,” she said.
According to the cheif economist, ATEX can strengthen Africa’ economic resilience as pooled demand will ensure Africa’s ability to negotiate competitive prices and attenuate the impact of the disruption in the food supply chain.
“There is a dire need to reduce the cost of agricultural inputs, especially fertilizer, ” the DES noted, indicating that ATEX offered a huge potential to enhance intra-Africa trade in fertilizers.
The value of Africa’s total fertilizer exports has outpaced imports by 2.6 times in 2021.
Morsy urged African countries to enhance sharing information on demand and supply of critical commodities, facilitate the participation of suppliers (Private Sector) of critical commodities and to register and start trading through the ATEX platform.
“This goes without saying that redirecting fertilizer within Africa is key to fill the gap left by the Ukraine crisis, specifically for nitrogen and phosphate-based fertilizers,” said Morsy noting that sourcing fertilizers and food commodities from within the continent would help cushion Africa from the debilitating impacts of recurrent shocks.
Currently 134 suppliers have been onboarded on ATEX (including 104 African companies) and 249 African buyers.
The commodities available on ATEX include Fertilizers, industrial products and Agricultural products such as Cashew Coffee, Oilseeds, Wheat, Maize, Rice and Barley,