International Food Policy Research Institute OPTIMIZING THE IMPACT OF SOCIAL SERVICES EXPENDITURES ON AGRICULTURAL GROWTH AND POVERTY REDUCTION OUSMANE BADIANE Africa Coordinator International Food Policy Research Institute Thursday, January 17, 2019

AGRICULTURAL AND ECONOMIC GROWTH RECOVERY Page 2

PROGRESS AGAINST 6% CAADP GROWTH TARGET (2005) Page 3

DECLINING PUBLIC EXPENDITURE IN AGRICULTUREH Page 4

DECLINING OVERSEAS INVESTMENT IN AGRICULTURE Page 5

FINANCING GROWTH AND SOCIAL NEEDS Page 6

FINANCING GROWTH AND SOCIAL NEEDS Page 7

FROM TRADE-OFFS TO CONVERGENCE GOVERNMENTS BUDGET TRADE-OFF FAVORS SOCIAL SECTORS MOST EFFECTIVE WAY TO REDUCE POVERTY RAISE PRODUCTIVITY OF POORS’ RESOURCES (LAND, LABOR) LOW ACCESS TO SOCIAL SERVICES IS OUTCOME OF LOW HOUSEHOLD PRODUCTIVITY, DEFICIENT FISCAL RESOURCES POOR DELIVERY, OBSTACLES TOACCESS SOCIAL SERVICES ARE COMPOSITES NOT HOMOGENEOUS SERVICES COMPOSITION IS NOT GROWTH NEUTRAL ADJUST SERVICES MIX TO RAISE GROWTH IMPACT Page 8

SOCIAL SERVICES, LABOR SUPPLY, & PRODUCTIVITY Ei , Ql Education Composite Average agricultural labor Productivity Education budget line Ej , Ls S / H Safety net and Health Composites Agricultural Labor Supply Si j Hi j Page 9

EDUCATION SERVICES MIX AND LABOR PRODUCTIVITY Ei , Ql Education Composite Agricultural average labor Productivity Be E’ E Ce Education budget line Ej , Ae Ls Si j Hi j Page 10

HEALTH SERVICES MIX AND LABOR PRODUCTIVITY Ei , Ql Agricultural average labor Productivity Fh Ch Dh Eh Ej , Ls H, H’ L’ L Agricultural Labor Supply Si j Hi j Page 11

BASIC STRATEGIC QUESTIONS CONVERGENCE BETWEEN SOCIAL SERVICES PROVISION AND PRODUCTIVITY ENHANCING INVESTMENTS BASIC STRATEGIC QUESTIONS HOW MAXIMIZE LONG TERM GROWTH WHILE MEETING SHORT TERM SOCIAL NEEDS HOW TO MAXIMIZE SYNERGY BETWEEN SOCIAL SERVICES AND PRODUCTIVITY ENHANCING INVESTMENTS UNDERSTAND SYNERGIES AND TRADE OFFS EXPLOIT GROWTH EXTERNALITIES OF SOCIAL SERVICE FOCUS ON SOCIAL SERVICES EXPENDITURE COMPOSITION TO ALLEVIATE IMPACT OF BUDGET TRADE OFF Page 12