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Harnessing SAATM and an Africa-UK trade agreement to enable agricultural development

Tuesday 1 June 2021

Loveth Ovedje

Niji Oni & Co, Lagos

Introduction

The United Kingdom depends significantly on agricultural imports to meet domestic food demand importing more than 40 per cent of its total food requirements. Demand is expected to increase steadily in future due to anticipated population growth. Following its departure from the EU from which it imported much of its agricultural products, despite the EU-UK Trade and Cooperation agreement, it is only rational for the UK to look to other sources to decrease dependence on agricultural products from the EU in future. UK policy makers, as well as food importers, will therefore have to look for new supply sources of different agricultural products from across the world.[1]

African is blessed with agricultural cash crops and meat, such as beef, cocoa, yam, tea, coffee, grains, nuts, timber and fruit, all of which are exported mostly by sea and air freight [2] to different parts of the world including the EU, and is expected to continue such exports to the UK post-Brexit.[3] With Africa making strong and concerted efforts to increase its agricultural production and its continental strive for development and economic growth with the introduction of The Single African Air Transport Market (SAATM) and Africa Continental Free Trade Area (AFCTA), it provides an attractive source to supply the UK’s agricultural needs. Consequently, African would benefit more from SAATM and be in a stronger position to negotiate with the UK when the problems from transport and air freight logistics have been sorted. Appreciating this raises the following questions which this article will analyse:

  • What is SAATM and what new laws, policies and regulations need to be put in place by member states for its implementation? Such measures might include proper working of the aviation sector, avoidance of bottlenecks, raising funding and establishment and maintenance of such infrastructure.
  • UK Post-Brexit agreements with African countries and how SAATM will be an enabler for agricultural development in the continent to fuel these agreements?
  • How to ensure signatories to the SAATM implement health, safety and environmental standards for airlines while exporting these agricultural products.
  • How to resolve breaches by signatories on the terms of the agreement and intra-countries collaborative partnerships.

SAATM and the laws, policies, regulations and plans required for its implementation

SAATM

SAATM is a flagship project of the African Union Agenda 2063. It aims to create a single unified air transport market in Africa to advance the liberalisation of civil aviation and to act as an impetus to the continent’s economic integration agenda. SAATM will ensure aviation plays a major role in connecting parts of Africa, promoting its social, economic and political integration and boosting intra-Africa trade and tourism. SAATM was created to expedite the full implementation of the 1988 Yamoussoukro Declaration.

Originally, 23 Member States of the African Union agreed to join the SAATM as starting participants. As of March 2020 there were 33 countries participating, namely: Benin, Botswana, Burkina Faso, Cameroon, Cape Verde, Chad, Central African Republic, DR Congo, Egypt, Ethiopia, Equatorial Guinea, Gabon, The Gambia, Ghana, Guinea, Guinea-Bissau, Ivory Coast, Kenya, Lesotho, Liberia, Mali, Morocco, Mozambique, Niger, Nigeria, Rwanda, Senegal, Sierra Leone, South Africa, Swaziland, Togo and Zimbabwe..[4]

SAATM is critical to the African Union’s integration agenda; in particular, a crucial logistic infrastructure for the successful operation of the Africa Continental Free Trade Area (AfCFTA), complemented by its the protocol aimed at creating a continental market for goods and services, with free movement of people, as well as the African Passport. It will further eliminate the need for separate bilateral air service agreements (BASAs) between individual countries. It promotes multilateralism for air transport in Africa, as envisaged under the Yamoussoukro Declaration, with a view to making the entire African aviation market a single market. Under SAATM, any current or future air service agreement signed between any or all of its 33 member States, must be Yamoussoukro Declaration compliant and must meet the requirements of:

  • free exercise of first, second, third, fourth and fifth freedom traffic to eligible airlines;
  • liberalised air tariffs;
  • unrestricted frequency and capacity;
  • full liberalisation of cargo services;
  • recognition of the powers and function of the executing agency – the African Civil Aviation Commission and ;
  • adhere to the uniform rules for fair competition, consumer protection and other regulations;[5]

Under the Decision Relating to the Implementation of the Yamoussoukro Declaration Concerning the Liberalisation of Access to Air Transport Markets in Africa (The Decision), Article 6.9 provides for eligibility Criteria to be elected as an authorised airline:

‘To be eligible, an airline should:

    1. be legally established in accordance with the regulations applicable in a State Party to this Decision;
    2. have its headquarters, central administration and principal place of business physically located in the State concerned;
    3. be duly licensed by a State Party as defined in Annex 6 of the Chicago Convention;
    4. fully own or have a long-term lease exceeding six months on an aircraft and have its technical supervision;
    5. be adequately insured with regard to passengers, cargo, mail, baggage and third parties in an amount at least equal to the provisions of the International Conventions in force;
    6. be capable of demonstrating its ability to maintain standards at least equal to those set by ICAO and to respond to any query from any State to which it provides air services;
    7. be effectively controlled by a State Party.’[6]

The benefits of SAATM

On the benefits of SAATM, Dr Amani Abou-Zeid, Commissioner: Infrastructure and Energy stated that:

‘The African Union Commission has the mandate to deliver these projects for the benefit of the African citizenry. The SAATM is expected to enhance air connectivity across the continent, thereby reducing the journey and waiting times for most passengers by more than 20 per cent, induce competition of air services resulting in fare reduction and contribute to the growth of the tourism industry in Africa and job creations in both sectors.’[7]

Other benefits include: over 25 per cent lower fares; job creation for African youths; air; integration – bringing Africa together; convenience; time saving; enhanced intra-African trade (CFTA); and contributing to a growth in tourism. It would also help in the survival of African Airlines, and contribution to GDP at a rate of US$72.5bn on a continent where transport supports account for 6.8 million jobs. The benefits would not just be limited to

Africa, but also more generally to airlines, airports, air traffic control services, tourism, and shipping.[8]

Laws, policies, regulations and plans required for the implementation of SAATM

For the proper working of the aviation sector, avoidance of bottlenecks, establishment, and maintenance of infrastructures towards the implementation of SAATM, legislation, policies, regulations and plans that need to be put in place by Member States.

Research by the World Trade Organization (WTO) examined the effects that quality of infrastructure has on a country’s trade performance, estimating a gravity model that incorporates bilateral tariffs and a number of indicators for the quality of infrastructure. The research found that pairs of countries with good airport infrastructure trade more than twice as much, everything else being equal.[9] It would be advisable for governments to make an action plan for improving infrastructural conditions, consolidating land holdings, improving productivity, and thereby achieving significant increase in agricultural production.

Special attention should be paid to important crops such as cocoa, soya, groundnuts, and rubber, as well as marine products like shrimp and fish, all of which have strong export potential. The government must implement target-oriented plans with deadlines, which focus on increasing yields, development of economies of, reduction of production and transport bottlenecks, optimisation of costs and improvements in supply chain management.

SAATM will be more successful when all stakeholders work together to realise its objectives by formulating suitable laws and policies. Governments need to work closely with airlines and other aviation stakeholders to formulate, promote or implement policies which support growth in air transport.

Civil aviation authorities have the responsibility for maintaining minimum interim safety and security standards, as recommended by the International Civil Aviation Organization (ICAO) and in accordance with national laws. This will greatly accelerate airline cooperation and collaboration as all parties (particularly passengers) are assured of uniformity across the continent. African airlines have a major role to play. SAATM will be able to deliver on its promise if airlines cooperate to maximise their opportunities.[10]

UK post-Brexit agreements with African countries: how SAATM enables agricultural development on the continent

UK post-Brexit agreements with African countries

The UK has assumed responsibility for its own trade policy following its withdrawal from the European Union on 31 December 2020. The UK’s departure from the EU means that the agricultural sector faces unprecedented change, since the EU and former European Economic Community’s (EEC) Common Agricultural Policy had provided a framework for the UK’s agricultural sector for decades and the phasing out of these arrangements requires a major rethink about regulation, productivity, innovation, and sustainability.

Post-Brexit, certain agreements are still being reviewed with African countries such as Ghana, Ivory Coast among others. Brexit provides a wider opportunity to re-think the arrangements that have governed UK-Africa trade during the UK’s membership of the EEC/EU as Africa moves forward with its own economic agenda led by the African Union (AU), including the development of the AfCFTA, which came into force on 30 May 2019. Its longer-term vision, expressed in its ‘Agenda 2063’ document, focuses on making industrialisation a central plank in Africa’s development strategy.[11]

How SAATM will be an enabler for agricultural development on the continent

With the UK importing almost 45 per cent of its food and drinks consumed, with an increase in imports of cocoa of almost 3.9 per cent from 2019-2020, Africa has a wide export market pending on the implementation of SAATM, as transport and logistics plays pivotal roles in the export of agricultural products. Although Africa currently accounts for under four per cent of global world air traffic, with a population of over a billion, the share of African traffic should increase to more than ten per cent with a fully operational single African air transport market. SAATM would also lead to agricultural development by reducing transport costs which could further reduce tariffs. This would increase exports and cause agricultural sector development as more funding would be provided to meet the increasing demand.[12]

Aviation is a vital tool for development globally and has the enormous potential to transform and improve the economic and social benefits across Africa. Improved intra-Africa connectivity facilitates business and trade in agriculture, as areas whose agricultural produce could not be exported in the past due to lack of air transport would now be able to do so under the SAATM regime. Places such as Uganda would benefit greatly from this improved air service connectivity.[13]

Africa is home to over 1.2 billion people with a huge geographical, largely landlocked spread. Given the lack of robust alternative infrastructure across the continent (road, rail, water), aviation is the most effective way to get around. Unfortunately, Africa is baldy connected in terms of air services and in many cases, the only way to get to countries within Africa is to travel for days or via other continents. This lack of connectivity is causing Africa to lose out immensely on socio-economic benefits and growth opportunities. The African aviation market arguably offers the most potential for growth out of all the global regions, due to it being a comparatively young industry, servicing a large and rapidly developing population.

As aviation is the foundation of many established and emerging economies such as the UAE, Singapore, Ethiopia, South Africa, Rwanda, Ghana, Ivory Coast, the SAATM is a clear path to a more secure and prosperous future.

How to ensure SAATM signatories implement health, safety and environmental standards for airlines while exporting agricultural products

Article 6.10 of the Decision provides for revocation of authorisation to the effect that a state party may cancel, suspend, or limit the operating authorisation of a designated airline of the other state party if the airline fails to meet the criteria of eligibility. In case of such revocation the state party shall inform the airline at least 30 days before the measure comes into force.[14]

Article 6.5 of the Decision states that where a state party is convinced that a designated airline does not meet the criteria in Article 6.9,[15] it may refuse authorisation. The state that has designated the airline may request consultations in accordance with article 11 paragraph 4 of this Decision relating to miscellaneous provisions.[16]

State parties must therefore ensure that their choice of designated airline is always in line with the eligibility criteria as provided by the Decision to avoid revocation.

Resolution of breach by signatories on the terms of the agreement and intra countries collaborative partnerships

Article 11.3 of the Decision recognises cooperative arrangements. These may come about as a result of or in operating the authorised services on the agreed routes. A designated airline of one state party may enter into cooperative marketing arrangements such as blocked-space, code sharing, franchising, or leasing arrangement, with an airline or airlines of the other state party.

Neither the article nor the Decision provides for ways of resolving disputes that may arise. However, article 12.3 of the Decision does make provision for withdrawal from the treaty as follows:

‘12.3.1 A State Party may withdraw from this Decision by a formal notification in writing addressed to the Depository of its intention to do so or in the circumstances contemplated under Article 104 of the Abuja Treaty. The Depository shall within 30 days of receipt of the notification of withdrawal notify the other State Parties.

‘12.3.2 Notwithstanding the notice of withdrawal, this Decision shall apply to the State concerned for one year after the date of receipt of the notification by the Depository.’[17]

State parties are therefore advised to include suitable means of resolving these disputes in their respective agreement.

Recommendations

From the above, it is clear that the agricultural sector will be affected by both SAATM and Brexit, as trade will be key to competitiveness, and expectations of new export opportunities are high. SAATM is expected to unlock an array of new opportunities for the export of meat, dairy, cereals, fish, whiskey, and a host of other food products. It is therefore important that the following five recommended steps are taken into consideration:

  1. Collaboration between all the stakeholders is important in ensuring the successful operation and realisation of SAATM, which is vital to the achievement of the long-term vision of an integrated, prosperous, and peaceful Africa.[18] Member States should therefore make agreements which include effective, efficient, and robust dispute resolution procedures for the peaceful resolution of conflicts which may arise from collaborative agreements.
  2. In its trade agreement with Africa, the UK should consider a continental approach which would reduce the multiplicity of new arrangements while achieving a comprehensive single trade agreement with all 54 countries aligned to Africa’s plan for a continental regional integration. Taking into consideration facilitation of green technology transfer, removing subsidies to ensure that the UK competes fairly with the African agriculture sector and include partnerships in services to help African countries learn from the UK and build capacity for its own industrialisation.[19]
  3. African governments should be proactive in approaching the UK regarding negotiations by negotiating as a continent and developing proposals for early talks. This is in order to press for more development-friendly opportunities such as the relaxation of technical barriers to trade which protect some producers in the UK market from products in which Africa has a comparative advantage, such as tropical fruit, vegetables, and meats. Some suggestions to be put forward may include the South African Growers’ Association requesting that the revised UK plant health regulations on citrus imports be made easier to comply with than current EU regulations. The same could be arranged for beef exports following compulsory and expensive regulations which are applied to African countries.[20] Thereby reinforcing continental trade and capacity, which can also help unlock greater international opportunities.
  4. By fostering greater levels of continental trade and investing the returns in improved infrastructure, such as processing and storage facilities, African economies can add value to commodities such as cocoa on the continent to fetch a premium, while also creating job opportunities. Almost half the total value of African agricultural exports lies in a single crop, cocoa, which is mostly shipped out of the continent without being processed. A 2020 study found that trading manufactured products, including processed agricultural products, increased economic growth while the trade of primary products slowed growth, making it crucial for Africa to develop a competitive processing sector. More so, a key opportunity to meet the African Union’s goals on trade and bolster processing capacities lies in investments that increase the productivity and quality of high value foods, which also contribute to better nutrition. The African Development Bank is among those to recognise this opportunity by investing billions into creating Special Agro-Industrial Processing Zones (SAPZ), including US$500m for Nigeria alone to support greater integration of production and processing.[21]
  5. Some African governments and airlines have criticised the SAATM especially smaller airlines, as well as the Ugandan government and have alleged that the agreement would lead to a few big airlines dominating the market, stifling competition.[22] It is paramount that solutions that provide a stronger platform for CSOs to air trade, solving integration concerns and policies to help these governments transition into rapidly-growing sectors which gain from trade liberalisation. Consequently, ensuring regional integration and a broad based pro-poor growth imperative,[23] while making favourable guidelines for negotiation of BASAs with developing African countries.

Conclusion

Post-Brexit will present the UK with many challenges manifesting itself through different trade and trade development areas which will affect Africa, as they are significant points in its relationship with the UK. We must therefore ensure that all opportunities set a development friendly and conducive trading environment. Chief among these is the development of a comprehensive continental trade arrangement between the UK and Africa for agricultural development and the massive growth of industrialisation on the African continent.

 

Notes

[1] Trade and Agriculture Commission, Final Year Report, March 2021.

[2] Ibid.

[3] ‘Importation of Agricultural Products from Africa to the EU: The Role of The Role Certification, including Grading and Standards Play in the Importation of Organic Agricultural Products from Africa to the EU’, 19 March 2018, see https://www.ukessays.com/essays/economics/importation-agricultural-products-africa-7054.php, accessed 7 May 2021.

[4] African Union Commission, The SAATM Handbook, see au.int/saatm, accessed on 7 May 2021.

[5] Ibid.

[6] UN, ‘The Decision Relating to the Implementation of the Yamoussoukro Declaration Concerning the Liberalisation of Access to Air Transport Markets in Africa’, 1999.

[7] SAATM Handbook, see n 4.

[8] Ibid.

[9] InterVistas Final Year Report 2014, Transforming Intra-African Air Connectivity: The Economic Benefits of Implementing the Yamoussoukro Decision, InterVISTAS Consulting, July 2014.

[10] SAATM Handbook, see n 4.

[11] UK Government, Department for International Trade, ‘Trading with developing nations – Details on the UK’s Generalised Scheme of Preferences’, 31 December 2020, see https://www.gov.uk/guidance/trading-with-developing-nations-during-and-after-the-transition-period, accessed on 7 May 2021.

[12] Trade and Agriculture Commission, see n 1 above.

[13] IATA ‘The Single African Air Transport Market (SAATM)’, see https://www.iata.org/en/policy/business-freedom/saatm, accessed 7 May 2021.

[14] The Decision Relating to the Implementation of the Yamoussoukro Declaration Concerning the Liberalisation of Access to Air Transport Markets in Africa.

[15] As highlighted in para 1.1. above.

[16] Decision Relating to Yamoussoukro, see n 14.

[17] Ibid.

[18] SAATM Handbook, see n 4.

[19] David Luke, ‘Brexit Africa Trade and Development Implications’, speaking notes, 7 July 2016.

[20] Ibid.

[21] ‘West Africa is keen to feed the UK post-Brexit’, DW, 12 September 2020, see https://www.dw.com/en/west-africa-is-keen-to-feed-the-uk-post-brexit/a-54901042, accessed 7 May 2021.

[22] Ibid.

[23] Ibid.