DISENTANGLING THE SOURCES OF

GROWTH.Land, Labor, Fertilizer, Tractor, Research, Extension…… what are their

exact contributions to agricultural growth in Africa:

Lesson from macro-data.

Guy B. Nkamleu

African growth tragedy

• Africa’s growth performance continues to

challenge our understanding.– With the African population expected to grow at 2.8% per annum, simply

preventing an increase in the number of Africa’s absolute poor will

require an annual growth of at least 5%, almost twice the level achieved

since 1973.

• Growth in agriculture, particularly in Africa, has

been strongly tied to overall economic growth

and poverty reduction – Recent studies show that for African countries, a 10% increase in

agricultural yield leads to a 9% decrease in the percentage of those

living on less than US $1.00 a day.

African growth tragedy

• Why some countries achieve rapid economic growth and some other countries experience stagnation and even economic regression ?– This has led researchers to examine the main sources of growth for

different countries and regions of the world.

• Efforts to understand that should be to first, explore the driving forces of economic growth……. In the case of Africa, attention should focus on sources and driving forces of agricultural growth.

• AIMS: Investigate sources and

determinants of agricultural growth in

Africa.

– The focus is on quantifying:

• how much growth in agricultural output is associated

with growth in physical capital,

• how much is due to technology,

• how much is due to productivity improvement,

• how much is due to institutional change and other

factors.

Potential sources of Ag. Growth

Tractors

Labor Quality

Labor Quantity

Chemical inputs

Technology

Agricultura

l Growth

Land

Random factors

Livestock

Extension

What

drive

me ?

Data Used

Panel Data (1970-2000) on the agricultural sector of each

country…. (FAOSTAT).

These data included:

• value of the Agricultural production,

• agricultural labor,

• number of tractors in use,

• quantity of fertilizer used,

• agricultural land,

• number of livestock in sheep-equivalent.

Data: Sampled Countries

• Top 26 African agricultural producers (except South Africa Republic)

Nigeria

CameroonGhanaIvory

coast

Burkina

Faso

Mali

Senegal

Uganda

ZimbabweMozambique

Angola

Madagascar

DR Congo

Algeria

Morocco

Egypt

Sudan

Tunisia

ChadNiger

Tanzania

Malawi

Kenya Rwanda

Burundi

Guinea

Visualisation

Frontier 1

X1 X2

P2

P1

X (Input)

Y(Output)

A

P4 A1

Frontier 2

B

break down the growth rate in neo-classical production function

• We first consider the following Solow neo-classical production function:

Jj

Tt

nitxfQ ititjit

,.....,1

,.....,1

,.....,1);,(ln

• Growth accounting analysis generally assumes that the residual of this production

function captures total factor productivity (TFP) growth. The break down of the growth

rate of the aggregate output is given by.

• Where dots over variables indicate rate of change

ititj

j

itjit TFPxQ

1

1

t

ttt

X

XXX

• and αitj is the output elasticity of input j, for country i in

time t. j

jx

txf );,(

Agricultural

Growth

Productivity

Growth

Efficiency

Growth

Technical

Growth

Scale

Efficiency

Pure Technical

Efficiency

AassumedisCRSxyd

xyd

ss

s

tt

t

,

,

0

0

BassumedisVRSxyd

xyd

ss

s

tt

t

,

,

0

0

21

0

0

0

0

0

0

,

,

,

,

,

,

ss

t

ss

s

tt

t

tt

s

ss

s

tt

t

xyd

xyd

xyd

xyd

xyd

xyd

B

A

21

0

0

0

0

,

,

,

,

ss

t

ss

s

tt

t

tt

s

xyd

xyd

xyd

xyd

TFP derivation: Malmquist Index Method

Four distance functions to compute

,0

'0

0

,)],([ ,

1

0

tit

tit

tt

t

Xx

Yytosubjet

Maxyxd

,0

'0

0

,)],([

11,

11,

,

1

11

1

0

tti

tti

tt

t

Xx

Yytosubjet

Maxyxd

,0

'0

0

,)],([

1,

1,

,

1

110

tti

tti

tt

t

Xx

Yytosubjet

Maxyxd

,0

'0

0

,)],([

1

1

,

11

0

tit

tit

tt

t

Xx

Yytosubjet

Maxyxd

• Distance from production point of t+1 to technology in period t

• Distance from production point of t+1, to technology in period t+1

• Distance from production point of t, to technology in period t

• Distance from production point of t to technology in period t+1

Yearly agricultural growth by decade in Africa

(%)

1.43

3.03

3.53

2.71

0

0.5

1

1.5

2

2.5

3

3.5

4

1971-80 1981-90 1991-00 All (1971-00)

Yearly agricultural growth by region in Africa, 1971-00

(%)

3.24

3.45

1.68

2.04

2.53

0

0.5

1

1.5

2

2.5

3

3.5

Northern West Central East Southern

Growth decomposition

Agricultural growth

Land,

Labor,

Fertilizer,

Tractors,

….

Technological

change

(research)

Conflict,

Climate,

Natural

disaster

……

Technical

efficiency

(extension)

Physical

factorsProductivity

Unaccounted

factors

Agricultural growth contributors, 1971-00 (%)

98

67

-65

-80

-60

-40

-20

0

20

40

60

80

100

Physical factors Productivity Unaccounted factors

Agricultural growth contributors by decade (%)

-100

-50

0

50

100

150

1971-80 113.88 -45.11 31.23

1981-90 48.33 86.14 -34.47

1991-00 92.04 91.36 -83.39

Physical factors Total factor productivity Unaccounted factors

Agricultural growth contributors by region (%)

-400

-300

-200

-100

0

100

200

300

Physical factors 66.92 48.53 262.2 270.58 176.27

Total factor productivity 64.27 42.73 66.43 136.61 48.6

Unaccounted factors -31.18 8.74 -228.64 -307.2 -124.87

Northern Western Central East Southern

Contribution of physical inputs in the agricultural

growth, 1971-00 (%)

4

21 25

51

-4

-10

0

10

20

30

40

50

60

Land Labor Tractor Fertilizer Livestock

Contribution of physical inputs in the agricultural

growth by region, 1971-00 (%)

-50

0

50

100

150

200

Northern West Central East Southern

Land

Labor

Tractor

Fertilizer

Implications for R4D

98

67

-65

-80

-60

-40

-20

0

20

40

60

80

100

Physical factors Productivity Unaccounted factors

Technological

change

(research)

Technical

efficiency

(research/extension)

Technology

or

Efficiency ?

Technology Gap and Productivity difference in

African Agriculture

Input, x

Output Y

Meta frontier

YS.A

YC.A

Northern Africa frontier

Southern Africa frontier

Central Africa frontier

YW.A

Westtern Africa frontier

YE.A

Eastern Africa frontier

YN.A

Input, x

Output Y

Meta frontier

YS.A

YC.A

Northern Africa frontier

Southern Africa frontier

Central Africa frontier

YW.A

Westtern Africa frontier

YE.A

Eastern Africa frontier

YN.A