document classification: unclassified · 2019 inter-african coffee organisation annual meetings 7th...
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Document Classification: Unclassified
African Export-Import BankBanque Africaine D’Import-Export
Transforming Africa’s Trade
2019 Inter-African Coffee Organisation Annual Meetings
How African producers can significantly benefit from the coffee value chain as a result of the implementation of the African
Continental Free Trade Area
28 November, 2019
Abah OfonResearch and International Cooperation, Afreximbank
Document Classification: Unclassified
2019 INTER-AFRICAN COFFEE ORGANISATION ANNUAL MEETINGS
7TH AFRICAN COFFE SYMPOSIUM
NAIROBI - KENYA
The African Continental Free Trade Area (AfCFTA):
• A market of 1.2 billion (2.5 billion by 2050) people and a gross domestic product (GDP) of $2.5 trillion, across all 55 member States of the African Union;
• The world’s largest free trade area since the formation of the World Trade Organization;
• A highly dynamic market by 2050, with an economy that is estimated to grow twice as rapidly as that of the developed world;
• AfCFTA will progressively eliminate tariffs on intra-African trade, making it easier for African businesses to trade within the continent;
• Consolidating this continent into one trade area provides great opportunities for trading enterprises, businesses and consumers across Africa and the chance to support sustainable development in the world’s least developed region;
• Research by Afreximbank shows relatively low average Export Similarity Index (ESI) values in Africa. This supports the view that there is ample scope for expanding intra-African trade within the context of the AfCFTA framework;
• The low ESI values for Africa indicate very low convergence in the sectoral composition of exports, which could heighten the risk of asymmetric shocks in the region. One way to drive this needed convergence is to expand supply chain networks associated with exports and imports across the continent;
• The ECA estimates that AfCFTA has the potential both to boost intra-African trade by 52.3 per cent by eliminating import duties, and to double this trade if non-tariff barriers are also reduced;
Document Classification: Unclassified
2019 INTER-AFRICAN COFFEE ORGANISATION ANNUAL MEETINGS
7TH AFRICAN COFFE SYMPOSIUM
NAIROBI - KENYA
Coffee producers and the demographic dividend
• UN forecasts indicate Africa will double its population by 2050, to nearly 2.5 billion people;
• Most importantly, half of that population will be less than 25 years old, which raises the urgent question of whether the coffee industry in Africa has the capacity to…;
• Evidence from the United States shows that millennials (18-39 year olds) consume over 44% of coffee in the market;
• Millennials learn to love coffee from an early age and the beverage continues to follow them through their work and social life; albeit they have different tastes and preferences for coffee than their predecessors.
Document Classification: Unclassified
2019 INTER-AFRICAN COFFEE ORGANISATION ANNUAL MEETINGS
7TH AFRICAN COFFE SYMPOSIUM
NAIROBI - KENYA5
Lessons from Brazil
Document Classification: Unclassified
2019 INTER-AFRICAN COFFEE ORGANISATION ANNUAL MEETINGS
7TH AFRICAN COFFE SYMPOSIUM
NAIROBI - KENYA
Since 2013, the African coffee market recovered from the deceleration
suffered during 2012-2013 as a result of declining global commodity prices.
In 2017, Africa’s export volumes reached $2.2 bn growing by 37.5% in
comparison to 2008 levels.
Africa’s value addition to coffee exports is minimal where, in 2018, 98.8% of
its total export volumes was green (i.e. Raw). In 2017, driven by the growing
domestic consumption, coffee imports to Africa reached $863 mn; the
highest in 20 years.
It should be noted that Africa’s coffee exports to World is mainly green
whereas the majority of its imports are refined coffee.
6
Low ESI convergence: State of Play in Africa’s Coffee Trade
Africa’s Coffee Exports and Imports
Source: ITC, 2019
Share (%) of Processed Coffee
in Total Coffee Exports
Document Classification: Unclassified
2019 INTER-AFRICAN COFFEE ORGANISATION ANNUAL MEETINGS
7TH AFRICAN COFFE SYMPOSIUM
NAIROBI - KENYA
Changing the narrative for the African coffee market
Document Classification: Unclassified
2019 INTER-AFRICAN COFFEE ORGANISATION ANNUAL MEETINGS
7TH AFRICAN COFFE SYMPOSIUM
NAIROBI - KENYA
Synergies – Afreximbank 5th Strategic Plan
Document Classification: Unclassified
2019 INTER-AFRICAN COFFEE ORGANISATION ANNUAL MEETINGS
7TH AFRICAN COFFE SYMPOSIUM
NAIROBI - KENYA
Afreximbank’s Industrialisation & Export Dvlpt Strategy means…
Document Classification: Unclassified
2019 INTER-AFRICAN COFFEE ORGANISATION ANNUAL MEETINGS
7TH AFRICAN COFFE SYMPOSIUM
NAIROBI - KENYA
Afreximbank’s Plan V and coffee producers
Afreximbank launched its Africa Commodity Initiative (AFRICOIN) to provide an end-to-end solution(upstream, midstream and downstream) to the African commodity sector.For Coffee, AFRICOIN is aimed at providing solutions as follows:Upstream-Production: Facilitate the growth in coffee bean production by supporting productivity improvement initiatives, plantation expansion and technical assistance services to selected players in the African coffee industry;Midstream-Processing: Support deeper integration of the African coffee economy into global value chains by expanding processing of green coffee on the continent and for specialty coffee producers globally;Downstream- Consumption: Promote consumption of African coffee and products in Africa, Asia and the Middle-East.
Document Classification: Unclassified
2019 INTER-AFRICAN COFFEE ORGANISATION ANNUAL MEETINGS
7TH AFRICAN COFFE SYMPOSIUM
NAIROBI - KENYA
Thank you!
www.afreximbank.com
Twitter: @AfreximResearch
LinkedIN: Afreximbank Research
Email: [email protected]
Document Classification: Unclassified