The High Cost of Complying with Sanitary and Phytosanitary Standards (SPS) in Africa
This post is written by Getaw Tadesse and Fatima Olanike Kareem, AKADEMIYA2063.
Part II of a series on Sanitary and Phytosanitary Standards (SPS).
What Should be Done?
In Africa, the cost of compliance with SPS Measures are on average higher than in other regions, and there is high variability in the share of costs between private and public actors. The primary example in Part I of this series showed how food systems and trade can improve with specific national investments, but other countries may have other needs. How can the African continent reduce costs and improve outcomes for food safety?
African agricultural markets are dominated by small-scale farmers and exporters, who will be excluded from local and international food supply chains if costs of complying are too high. The African Union (AU) and its Member States must make joint and individual interventions to strengthen capacities and harmonize regulations that will reduce the burden of huge investments and operational costs on small businesses. Moreover, it is imperative to have SPS investment policies channeled to priority areas in Member States' SPS policy implementation frameworks to ensure a solid continental food safety system. The multiplier effect of such investments will help bolster extra- and intra-Africa trade and accelerate the continent's food and nutrition security.
Although costs of compliance are often prohibitively high in sub-Saharan Africa, stakeholders face strategic planning challenges addressing them because of too little up-to-date, detailed, and comprehensive data, particularly from the private sector. Such data are needed to understand and quantify the exact burden of SPS measures, while enabling the prioritization of SPS investments given scarce individual and government resources. Strengthening data collection and analytics on SPS costs of compliance will help determine where and how to prioritize resources and programming.
Prioritizing needs and investments would be guided by the cost of compliance that varies across SPS standards and value chains. The Standards and Trade Development Facility (STDF) has developed a tool to help inform and improve SPS planning and decision-making processes, called Prioritizing SPS Investments for Market Access (P-IMA). Within this framework, the cost of compliance can be one of the decision criteria for prioritizing investment options. In addition to the direct and explicit costs related to investments on capacity strengthening and operations, many SPS prioritization exercises in Africa include non-monetary or implicit costs related to the time spent to get certified, searching for service providers, and other associated transactional costs, in addition to implementation costs. A study in Ethiopia prepared by the Common Market for Eastern and Southern Africa (COMESA) Secretariat used a multi-criteria decision analysis tool to prioritize capacity-building interventions and developed recommendations based on a detailed analysis of the costs and potential impacts including agricultural productivity, domestic public health, local environmental protection, poverty, and income. The top recommendation made was for support to meet Codex standards for dairy products.
An important starting point to find the most effective ways to support food safety and security in African countries is data collection and analytics on the current compliance costs of SPS measures in Africa. AKADEMIYA2063 and the U.S. Department of Agriculture Foreign Agriculture Service are conducting a project to address SPS-related challenges in Africa through research on the current costs of complying with SPS measures, which will help to identify investment opportunities and guide policymaking. Data on private and public entities' fixed and operational costs of SPS compliance are being collected in Ethiopia, Morocco, Nigeria, Rwanda and South Africa. These nations and their regional partners will be better equipped to prioritize SPS investments once the data analysis has been completed.
This project will help The African Union Commission-Department of Agriculture, Rural Development, Blue Economy, and Sustainable Environment (AUC-DARBE) achieve goals of (i) Annex 7 of the African Continental Free Trade Area (AfCFTA) agreement on SPS measures, (ii) the African Union Sanitary and Phytosanitary (SPS) Policy Framework, (iii) the Food Safety Strategy for Africa (FSSA), (iv) the Animal Health Strategy for Africa (AHSA), and (v) the Plant Health Strategy for Africa (PHSA). These initiatives, in line with international standards, aim to strengthen African countries' food safety systems and ensure the protection, safety, and health of humans, animals and plants. They will ultimately increase trade flows, but only if the Member States implement them.