70 | Sub-Saharan Africa (SSA) Report

processed its applications through the South African Committee on Gene Experimentation, which was superseded by the GMO Act in 1999.

The country has an intellectual property system in place (Wolson, 2005) and is signatory to various international treaties and conventions. The legislation is similar to that of British and European legal systems. It has a representative number of patent attorneys, but only a few are qualified in biotechnology. The South African Patent Office is being upgraded from a receiving office to one for examination; it processes over 70,000 patent applications annually. This figure far exceeds the number processed annually by ARIPO (700-1000), the regional patent office for Anglophone countries. Given this level of activity by ARIPO, South Africa may be more inclined to establish a continental office inclusive of both Anglophone and francophone countries, than to seek to join the present ARIPO.

South Africa’s commercial market value for GM maize, cotton and soybean was estimated at US$146.9 million in 2004 (Runge and Ryan, 2004). There is an enabling environment for receiving and evaluating transgenic crops. Since 2003, South Africa has participated in the UNEP-Global Environment Facility project to bring the biosafety regulatory framework in line with the CPB. South Africa acceded to the protocol in 2003 even though it was not a signatory. As a party to the protocol and as a major producer, South Africa will need to comply with the CPB. Particularly as the country becomes a major exporter of GM grain or stock feed to some markets in sub-Saharan Africa in the near future. At stake will be the need for an advance informed agreement for commodity exports with importing countries that are parties. However, GM cotton lint, crushed maize and soybean for stock feeds will not require special handling under the protocol as these are nonliving modified organisms.


3.5      Trade, Markets and Globalization
Local, regional and global agricultural markets drive economic development and agricultural growth by providing an incentive for allocating resources to ensure the highest value production and maximum consumer satisfaction (Townsend, 1999).


3.5.1      Local trade and markets
Inadequate local trade and market conditions adversely affect agricultural productivity, profitability and investment. Weak input and output markets result in inputs that are expensive and not consistently available, as well as low producer prices; weak financial sectors limit access to credit for small-scale producers. SSA has traditionally suffered from weakness in these areas.

Sub-Saharan African markets are changing (Rosegrant et al., 2001); and the continent’s rapid urbanization and other economic, climate and demographic shifts will have significant implications for SSA agricultural production and markets. For example, the effects of urbanization on both the quantity and types of agricultural products demanded by domestic consumers may create new incentives and opportunities for SSA agricultural producers, wholesalers and retailers. The transition from subsistence-oriented agriculture to commercial agriculture for markets that are increas-

 

ingly urban requires development of better infrastructure such as roads and markets. Once market channels develop, transport and transaction costs usually decline.


3.5.2 Regional trade and markets
Sub-Saharan African countries are forming and strengthening regional trade arrangements and agreements. Regional trade arrangements offer opportunities for markets that are more reliable and therefore more favorable to foreign direct investments (Summers, 1991). Regionalization also presents an opportunity for individual countries to deal cooperatively with infrastructural problems, limited institutional capacity lack of physical and human capital, limited natural endowments, geographical barriers, and unfavorable policy environments (Richards and Kirkpatrick, 1999).

In general, SSA countries have individually been performing poorly with respect to economic growth. For example, non-oil exports, mostly agricultural, earned US$69 billion in 2000, instead of the projected US$161 billion they would have earned if agricultural exports had continued at 1980 levels (Sharer, 2001).

SSA countries are looking to regional integration for enhanced trade and investment, economic efficiency, economic growth and regional stability to reverse the weak growth performance of the past two decades. The move to regional trade in SSA can be seen as a defensive response to the perceived marginalization of Africa in globalization and multilateral trade forums (Mistry, 1995).

The major regional trading areas in SSA are (1) the Economic and Monetary Union of West Africa (UEMOA), (2) the Economic and Monetary Community of Central Africa (CEMAC), (3) the Economic Community of West African States (ECOWAS), (4) the Southern African Development Community (SADC), and (5) the Common Market for Eastern and Southern Africa (COMESA). UEMOA and CEMAC are both preferential trade areas and monetary unions; the others are preferential trade areas only. The East African Community is a regional grouping that is increasing in significance; in 2007 it expanded its membership to include Rwanda and Burundi. The two countries bring an additional 15-20 million people to the EAC market, and they are a direct link to the Democratic Republic of Congo. Regional trade has increased more in some SSA trade organizations and bodies than in others: UEMOA, CEMAC and SADC have seen more trade increase than ECOWAS while COMESA has registered the least.

Regional trade agreements that combine both a preferential trade agreement and a currency union component are likely to be efficient in increasing intraregional trade (Carrere, 2004). It is for this reason that COMESA, established in 1983 as a preferential trade area, has ambitious plans for full economic integration, including the free movement of people by 2014 and currency union by 2025 (Carmignani, 2006; Gupta and Yang, 2006).

The potential for regional trade is huge. Intraregional trade development in agriculture, formalizing existing informal trade, value addition and ICT are all largely unexploited trade opportunities. Sub-Saharan African countries currently import food products equivalent to 14% of global