Kampala Webinar Session V | Compliance with SPS Measures: Challenges and Investment Options: Dr. Getaw Tadesse

Getaw Tadesse (PhD),
Director of Policy Intelligence, AKADEMIYA2063

Transcript

1. www.akademiya2063.org Compliance with SPS Measures: Challenges and Investment Options Getaw Tadesse (PhD) Director of Policy Intelligence, AKADEMIYA2063 Presentation to the Kampala Webinar Series on 21st May 2026 Virtual,
2. www.akademiya2063.org Outline • Introduction • Cost of SPS Compliance • SPS Investment Needs • Integrating SPS into Kampala Implementation
3. www.akademiya2063.org Introduction • According to the 2025 AATM report, in 2023 and 2024, 28 NTMs were registered in Africa.
4. www.akademiya2063.org Introduction • African agricultural exporters also face substantial NTMs, from other trade partners, including some European countries, US and others • NTMs impede access to regional and global markets • SPS measures have a trade effect equivalent to increasing tariffs by 49% • NTM harmonization can boost intra-African and global trade. • However, weak SPS systems and infrastructure remain key constraints
5. www.akademiya2063.org Introduction • SPS • is meant to ensure safe food, animal and plant health, and safe trade • Not to restrict trade • Becomes a barrier, when countries fail to comply • Compliance with SPS measures helps to • Facilitate trade across borders • Reduce trade rejection • Ensure consumption of safe food • Building compliance capacity entails • Understanding the costs of compliance • Exploring the priority investment needs at country levels
6. www.akademiya2063.org AKADEMIYA2063 study • Was conducted in Ethiopia, Morocco, Nigeria and Rwanda • The objectives were • Examine the cost of compliance for private actors • Estimate the costs of compliance by private operators • Identify drivers and compositions of cost of compliance • Investment priorities for public institutions • Identify priority areas of investment • Estimate the amount of investment needed • The study uses descriptive and qualitative analysis
7. www.akademiya2063.org The Cost of Compliance (CC) • Previous studies suggest as as high as 7.7% of the sales (Maskus et al. 2005) • Our study indicates lower than this but still significant, more than 1% • Morocco had the highest estimated compliance costs among the countries studied. • Internationally traded products have higher compliance cost than regionaly traded products 1. Compliance costs remain high, varying across countries and commodities
8. www.akademiya2063.org The Cost of Compliance (CoC) • Exporters and processors often incur lower compliance costs relative to sales, • Smallholder farmers bear proportionally higher burdens because: : • They lack economies of scale, • Have limited access to finance, • Operate with weak technical support. • Major cost items • Pesticide management • Fertilizer management • Certified seeds • Aflatoxin management 2. Farmers Face the Greatest Burden
9. www.akademiya2063.org The Cost of Compliance (CoC) • Major cost drivers include: • Inadequate laboratories, • Poor cold-chain systems, • Weak storage infrastructure, • Unreliable electricity, • Limited testing facilities 3. Infrastructure Deficits Increase Costs
10. www.akademiya2063.org The Cost of Compliance (CC) Figure 1. Percentage of Food Enterprises with little or no awareness about domestic or foreign SPS requirements 4. Knowledge and Awareness Gaps Raise Compliance Costs • Many farmers and enterprises: • Lacked understanding of SPS requirements, • Had insufficient technical training, • Received weak advisory support. • This increases the effective cost of compliance because firms struggle to comply efficiently. • Only few enterprises are convinced about the benefits of compliance
11. www.akademiya2063.org The Cost of Compliance (CC) • For effective compliance, CC should be lower than cost of non-compliance • However, increasing non-compliance cost is not socially optimal • Reducing the CC is the best option 5. Reducing CC is a preferred Option than Increasing CN CC
12. www.akademiya2063.org The Cost of Compliance (CoC) • Most enterprises fund compliance using: • Personal savings, • Internal business funds, or informal financing. • There was: • Little government support, • Limited donor financing, • Low access to bank credit. 6. Compliance Is Mostly Self-Financed
13. www.akademiya2063.org Investment Needs • Across all countries, inadequate financing remains a major constraint to the development and expansion of SPS systems and services. • Public budget allocations for SPS investments are consistently low, • Development partners and donors have shown limited interest in financing foundational SPS infrastructure, 1. The high CC and weak SPS systems in Africa are strongly linked to underinvestment,
14. www.akademiya2063.org Investment Needs • Upgrading of laboratories and lab equipment • Capacity building and training targeted to technical personnel, and increasing awareness of SPS issues • Traceability and Digital Systems • Regular supply of electricity , mainly in Ethiopia and Nigeria 2. Cross-cutting Investment Needs, Across the Four Countries
15. www.akademiya2063.org Investment Needs • Ethiopia, • Development of the legal frameworks and standards • Establishing research centers that provide SPS support • Morocco, • Reducing the cost of engaging in risk analysis which are estimated as expensive • Nigeria • Qualified extension workers • Microbiological analysis and metal detector • Rwanda • Strengthening the surveillance programme, • Ffinancial support of SPS committees’ activities • investment in food safety policy, data acquisition, SPS/Food safety research 3. Country specific priority needs
16. www.akademiya2063.org Integrating SPS into Kampala Implementation • SPS related intervention areas under Kampala • 1.8: Strengthen market access and trade facilitation • 3.2: Strengthen SPS standards and One Health approach • 3.3: Improve animal health and welfare to ensure food safety and security, and contribute to public health • The AUC Kampala implementation guidelines • Building a strong governance • Diagnostics and analytics • Investment planning • Mutual accountability (BR system) • The issue • What specific actions are needed to integrate SPS/food safety in all these components?
17. www.akademiya2063.org For details • The policy brief has been published • The full report will be published soon • More policy briefs will come out
18. Thank You