AN OVERVIEW OF AGRICULTURE DEVELOPMENT IN AFRICA Theme 1 1

Theme Objectives To define agricultural development List the roles of agriculture in economic development To show the geographical groupings of African States; To give students an overview of agricultural developments in Africa, To show statistics on public expenditure on agriculture, To show statistics on value addition of agriculture, To show national Poverty headcounts figures for Africa, To give background information on agricultural performance in Africa, To show the development challenges in Africa 2

Definitions of Agricultural Development:  Transforming traditional agriculture  Increase agricultural productivity by allocating existing resources more efficiently  Adopting agricultural practices and technologies from industrial countries  Increasing per capita agricultural output having access to new, more productive factors of productions  Increasing the welfare of the poor through projects  to improve nutrition, education, housing and rural employment  All of the above qualifies to be definitions for agricultural development 3

Roles for agriculture in development Before we continue with any discussion on agricultural development, we need to understand the role this sector plays: Johnston and Mellor (1961) listed the following five roles: 1. Increase the supply of food for domestic consumption 2. Release labor for industrial employment 3. Enlarge the size of the market for industrial output 4. Increase the supply of domestic savings 5. Earn foreign exchange 4

Geographic regions and countries The five geographic regions of the African Union Central, Eastern, Northern, Southern, Western—see Table 1) Depending on their resource endowments and stage of development 5

Table 1: Geographic regions and countries 54 countries in Africa and their geographical locations CentralEasternNorthernSouthernWestern BurundiComorosAlgeriaAngolaBenin CameroonDjiboutiEgyptBotswanaBurkina Faso Central African Rep.EritreaLibyaLesothoCape Verde ChadEthiopiaMauritaniaMalawiCote d’Ivoire Congo, Dem. Rep.KenyaMoroccoMozambiqueGambia, The CongoRep. of MadagascarTunisiaNamibiaGhana Equatorial GuineaMauritius South AfricaGuinea GabonRwanda SwazilandGuinea Bissau Sao Tome & PrincipeSeychelles ZambiaLiberia Somalia ZimbabweMali South Sudan Niger Sudan Nigeria Tanzania Senegal Uganda Sierra Leone

Geographic Regions and Countries 7

Stages of development Each country is assigned a stage of development based on per-capita income level, adopted from the World Bank’s income group classification (World Bank 2010); The 53 African countries are separated into low-income and middle-income status, comprising 55 and 45 percent of the countries, respectively. Low-income countries are distinguished by degree of agricultural favorability, based on its mix of farming systems as defined by Dixon, Gulliver, and Gibbon (2001)—such as irrigated, pastoral, or forest-based Agricultural favorability is derived from an index of the proportion of each farming system in the total land area. Each farming system is assigned a numeric value between one and ten based on its level of agricultural potential, with higher values associated with higher potential 8

Background on agricultural developments in Africa Africa, as a continent has witnessed remarkable economic growth since the mid 1990s due to improved macroeconomic conditions. For example, inflation and gross debt as a share of gross domestic product are shown in the report to have declined. While economic growth for Sub ‐ Saharan Africa (SSA) slowed down in 2009 following the food and financial crises, it rebounded to a pre ‐ crisis level of 5 percent in 2010, showing that macroeconomic fundamentals remained intact. 9

Background on Africa In 2003, the United States pledged a 50-percent increase over its $10 billion annual funding for U.S. development and humanitarian assistance, representing a $5 billion annual increase (USAID 2003). In 2005, the Blair Commission for Africa called for rich countries to double their aid to Africa and to cancel debts held by poor countries (Commission for Africa 2005). In 2007, the Commission of the European Communities (CEC) committed to advancing African agricultural development through cooperation with the African Union (CEC 2007). Many of the countries are developing detailed agricultural and food security investment plans, A growing number of them are increasing national funding for agriculture in pursuit of 10 percent budget share target for the sector 10

Background on African Agriculture… The development community is also responding at the bilateral and multilateral levels, including through the Global Agriculture and Food Security Program (GAFSP), which has already approved funding to the tune of US $270 million to help finance investment plans of Rwanda, Sierra Leone, Togo, Ethiopia, Niger, and Liberia. These plans are also being used to rally private sector financing sources, and global and local private sector companies There is unprecedented levels and momentum in some countries to mobilize global and local private sector companies to finance private goods and services in these country plans. 11

Share of Public expenditure on Agriculture Levels of agriculture spending have increased substantially in most parts of Africa, The amounts spent relative to total national expenditures have declined in most parts compared to the situation in the 1990s. For Africa as a whole, the share of agriculture spending barely surpassed 6 percent, although the declining trend in the shares observed in earlier years seems to have been partially reversed, and there are substantial differences in the patterns across the different regions within the continent (Next Slide) 12

Table 2: Statistics on the share of public spending allocated to agriculture IndicatorRegionAnnual average level 1990– – – 2009 Share of public allocated agricultural spending in total public allocated spending (%,) Africa SSA Central Eastern Northern Southern Western Middle income countries Mineral rich countries More favorable agricultural conditions Less favorable agricultural conditions Source: FAO,

Share of Public expenditure on Agriculture ten percent target Only six countries stand out as having achieved the ten percent target:  Burkina Faso,  Ethiopia,  Guinea,  Mali,  Niger, and  Senegal. 14

Agriculture growth rates The average annual agricultural GDP growth has rarely reached the six percent target For Africa as a whole, the annual average rates were 2.8, 4.6, and 4.5 percent in 1990–95, 1995– 03, and 2003–09, respectively (Table 2). Nin Pratt and Yu 2008 suggests that these numbers reflect the moderate and slowly growing agricultural productivity across the continent, which has been driven mostly by reallocation of productive factors (efficiency gains) rather than technological advancement (technical change). The main countries showing substantial upward trends in growth are: Eastern Africa : Ethiopia Southern Africa: Angola, Malawi, Mozambique, and South Africa Western Africa Benin, Ghana, Guinea, Niger, and Nigeria 15

Table 3: Growth rate in Agriculture IndicatorRegionAnnual Average level Agriculture, value (% growth rate) Africa SSA Central Eastern Northern Southern Western Middle income countries Mineral rich countries More favorable agricultural conditions Less favorable agricultural conditions Source: FAO,

Poverty and Agriculture Given the dominance of the agricultural sector in the economies and livelihoods of most countries on the continent, but low investments in the sector and moderate growth in productivity and output, it is not surprising that poverty remains high in many parts of the continent (Table 4) and only three countries Egypt, Ghana, and Mauritania—are on track to meet the MDG1 targets. Looking at any one of the targets, however, there are several countries, including many of those mentioned above, that are on track to meet it: 14 are on track to halve poverty levels, and 12 on track to halve hunger. 17

Poverty and agriculture With the year 2011 marking the beginning of national agricultural investment plan (NAIP) design and execution, mobilizing funding to implement the planned programs will be critical. If the budgets presented in the NAIPs are executed as planned, many countries will clearly outperform the 10 percent target, Which would make a strong contribution to raising agricultural productivity and reducing poverty and hunger. 18

Table 4: National Poverty Headcount IndicatorRegionAnnual average level 1990– – –2009 National poverty headcount ratio (% of total population) Africa SSA Central Eastern Northern Southern Western Middle income countries Mineral rich countries More favorable agricultural conditions Less favorable agricultural conditions

Institutional reform In July 2003, African leaders declared their commitment to an agriculture-led development approach via the Comprehensive Africa Agriculture Development Program (CAADP) Both state and non-state actors and stakeholders at all levels (continental, regional, and national) Have continuously sought information on the progress of the design and implementation of agricultural policies and strategies, Both for Africa in general and for CAADP in particular (AU/NEPAD 2003) 20

Institutional Reform… The annual CAADP Partnership Platform meeting (CAADP PP) that brings together representatives of the leading Regional Economic Communities (RECs) regional organizations dealing with agriculture, major bilateral and multilateral development agencies, and private-sector and farmers’ organizations The aim is to review overall progress in the implementation of CAADP at the Africa wide level. 21

Development Challenges A key lesson from agricultural development experience of 1980s and 1990s Is that macroeconomic policies can be powerful stimuli to agricultural growth The national economy For macroeconomic and agricultural policies to succeed in stimulating both growth and poverty alleviation There must be sufficient domestic and international effective demand Public investment in research and rural infrastructure Institutional environment conducive to mobilizing the energy and capability of the majority of rural people Political stability 22

Development Challenges… The role of civil society in many countries Well-trained individuals and strong local organizations to carry out Research Provide services to farmers and traders Represent the interest of farmers and traders International research centers and expatriate advisers are best complements Not substitute for, these national organizations and this local policy analysis capability. 23

In summary  There is wide recognition that agriculture and rural development must play a central role in economic growth, poverty reduction, and food and nutrition security improvement  Developing clear rules and policies to govern financial markets is essential for sustainable agricultural growth There is a need for well-trained individuals and strong local organizations to carry out research, provide services to farmers and traders International research centers and expatriate advisers are best complements for Africa 24

Any questions for discussion: Next slide 25

References:  Eicher and Staatz “International Agricultural Development, 3 rd edition.  World Bank: World development report on Agriculture for development. 26

Review questions 1. Define agricultural development in your own words. [5 points] 2. What roles do agriculture play to economic development? [10 points] 3. Choose the correct answer; Africa has [5 points] a. 50 countries b. 48 countries c. 53 countries d. 54 countries e. None of the above 4. How many regions and countries are in Africa? [4 points] 5. List six countries that are spending 6 percent of public funds on agricultural development. [6 points] 6. Which countries in Africa are achieving the MDG1? [5 points] 7. Name and explain any development constraint for agricultural development in Africa. [10 points] 8. What does the acronym CAADP stands for? [5 points] 27