Addis Ababa (ENA) February 23/2023 The continental free trade area framework is an opportunity that would fundamentally transform the African coffee commodity market, Inter-African Coffee Organization (IACO) Secretary General Solomon S. Rutega told ENA.
According to him, the free trade area will have enormous positive impact on Ethiopia’s coffee price increment as the country is a major producer.
Out of the 50 countries that produce coffee valued over 400 billion US dollar in the global market, half are in Africa.
However, Africa’s coffee revenue share is only 10 billion USD.
The secretary general hopes that the decision of leaders of African countries at the recent summit to accelerate the implementation of the African Continental Free Trade Area (AfCFTA), this will promote coffee inter-regional trade within the African countries and beyond.
“The good news is the Africa Continental Free Trade Area framework is going to promote inter-regional trade in other African countries. So, Ethiopia can export its coffee to South Africa or Morocco directly and get more revenue. That also includes the other 30 consuming countries within the region. So it is a good opportunity for us to have the AfCFTA,” he elaborated.
Rutega believes that coffee has to be adopted as a strategic commodity under the African agriculture agenda 2063 in which the sector has 10 million households in Africa employed to generate a livelihood from coffee.
“We believe once coffee is one of the second largest traded commodities, it collects and employs many people…..So the multiple effect with improved income prices will help in transforming the socio-economic development of Africa.”
Coffee is a strategic commodity and contributes a lot to the foreign exchange earning, he also noted.
Commenting on Ethiopia, a leading coffee producer and coffee consumers in Africa, the secretary general urged massive investment in the value addition infrastructure.
“It is true that the birthplace of coffee is actually Ethiopia and where coffee originated from. The reason why we continue to get a low value from coffee exports is because most of the coffee is sold in the raw form. So, what we’re trying to do as the entire Inter-African Coffee Organization is to focus on the investment in the value addition infrastructure.”
On his part, Chief Executive Officer of the AeTrade Group Mulualem Syoum said Ethiopia is strategically working with AfCFTA to promote and create an enabling market environment for coffee products.
“We strongly believe that Ethiopia can be one of the few beneficiaries from the continental free trade area. What we played with the private sector in Ethiopia and with the government is to prepare ourselves with the rules and the regulations, the guidelines for the citizens. So, Ethiopian citizens can be competitors to the rest of the continent.”
Ethiopia as a main producer and at the same time consumer of coffee, the CEO noted, adding that the country has abundant opportunities to supply over 1 billion African population and teach its culture of coffee drinking to the rest of Africa.
However, he pointed out that the African Continental Free Trade Area needs to prepare affordable finance for small and medium coffee producers.