Friday, September 11, 2015 AGRICULTURAL AND ECONOMC GROWTH RECOVERY IN AFRICA IN THE CONTEXT OF GLOBAL CRISES OUSMANE BADIANE Director for Africa International

Friday, April 21, 2023

AGRICULTURAL AND ECONOMC GROWTH RECOVERY IN AFRICAIN THE CONTEXT OF GLOBAL CRISES

OUSMANE BADIANE

Director for Africa

International Food Policy Research Institute

1 OVERVIEW OF RECENT GROWTH TRENDS IN AFRICA

3 THE IMPACT OF CHANGING GLOBAL FINANCIAL MARKETS

2 THE IMPLICATIONS OF CHANGING GLOBAL FOOD MARKETS

4 EMERGING AGRICULTURAL POLICY DEVELOPMENTS


5 SUSTAINING AND ACCELERATING THE RECOVERY PROCESS







PRE-CRISIS ERA COINCIDED WITHLONGEST PERIOD OF SUSTAINED GROWTH SINCE 60S

-3

0

3

6

9

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

Perc

en

t (%

)

Agriculture, value added (annual % grow th)

GDP grow th (annual %)

SOURCE: Badiane 2008: IFPRI Policy Brief No. 9

THE GROWTH IS ACCELERATINGAS WELL AS SPREADING GEOGRAPHICALLY

SOURCE: IFPRI / Badiane and UlimwenguData from national account s / UN database: http://data.un.org/Explorer.aspx?d=SNAAMA

http://data.un.org/Explorer.aspx?d=SNAAMA

THIS IS REFLECTED INBETTER PRODUCTIVITY AND TRADE PERFORMANCE

95

100

105

110

115

120

125

2001 2002 2003 2004 2005

World Africa

95

100

105

110

115

120

125

130

135

140

145

150

155

160

2001 2002 2003 2004 2005

World Africa

AFRICAN VS WORLD EXPORTS (VOLUME)

AFRICAN VS WORLD EXPORTS (VALUE)

0.5

1.0

1.5

2.0

2.5

19

70

19

73

19

76

19

79

19

82

19

85

19

88

19

91

19

94

19

97

20

00

20

03

Ind

ex

(19

70

=1

)

Value of Ag

Inputs

TFP

0

1

2

3

4

5

6

1963 1967 1971 1975 1979 1983 1987 1991 1995 1999 2003

Ave

rage

ann

ual g

row

th r

ate

(%)

maize

rice

wheat

AGRICULTURAL PRODUCTIVITY AFRICA

AGRICULTURAL PRODUCTIVITY WORLD

0

10

20

30

40

50

60

1990 1995 2000 2005 2010 2015

Per

cen

t (%

)

Current

MDG target

SOURCE: IFPRI/Fan. 2007H

POVERTY LEVELS HAVE STARTED TO DECLINEBUT NOT FAST ENOUGH TO MEET MDG1

POVERTY HEAD COUNT; $1/DAY







THE GLOBAL FOOD PRICE CRISIS OF 2007-08

Source: J. von Braun; Data from FAO 2009 and IMF 2009.

WAS THERE A FOOD PRICE CRISIS IN AFRICA?ECOWAS Countries

Source: ReSAKSS West Africa Node

0

0,5

1

1,5

2

2,5

3

Sorghumdawanu Cowpeadawanu millet bamako rizdakar MilletNiamey

WAS THERE A FOOD PRICE CRISIS IN AFRICA?COMESA Countries

Source: ReSAKSS East Africa Node

70

80

90

100

110

120

130

140

150

160

Fo

od

Pric

e In

dic

es

FAO global foodprice index

Ethiopia

Burundi

Kenya

Tanzania

Madagascar

Malawi

Zambia

Uganda

Rwanda

Source: IFPRI / M. Rosegrant (prelim. results with IMPACT-WATER).

0

100

200

300

2000 2005 2010 2015

Rice Wheat MaizeOilseeds Soybean

US$/ton

LONG TERM WORLD FOOD PRICE TRENDS AND GROWTH RECOVERY IN AFRICA

India China Brazil Nigeria

Cereals 1.0 0.8 1.2 1.0

Meat 1.2 2.4 1.7 1.0

Milk 1.2 3.0 1.2 1.3

Fish 1.2 2.3 0.9 0.8

Fruits 1.3 3.5 0.8 1.1

Vegetables 1.3 2.9 1.3 1.3Source: IFPRI/ v. Braun - Data from FAO 2007.

2005/1990 ratios of per capita consumption

FACTORS BEHIND FOOD PRICE TRENDSINCOME & POPULATION GROWTH, MEAT AND DAIRY CONSUMPTION

0

300

600

900

1,200

1999 2000 2001 2002 2003 2004 2005 2006 2007*

800

1,200

1,600

2,000

Wheat Coarse grains Rice Total (right)

Source: IFPRI / v. Braun - Data from FAO 2003, 2005-08. * Forecast.

Million tons Total Million tons

FACTORS BEHIND FOOD PRICE TRENDSVERY SLOW GROWTH IN FOOD PRODUCTION OVER THE LAST DECADE

Individual Countries

DRC

CAR

RATIO VALUE AGRIC TRADE TO AGRIC GDP2000 - 2006

AFRICA

NOTES: Agricultural trade is the value of agricultural exports plus value of agricultural importsSOURCES: Agricultural trade: Food and Agriculture Organization, FOASTAT 2008 Agricultural value added: World Development Indicators, 2008

VULNERABILITY OF AGRICULTURE TO GLOBAL MARKET CHANGES







THE IMPACT CHANNELS

1 RECESSION – EXPORT DEMAND - TERMS OF TRADE AG. REVENUES

3 FOREX AND FISCAL DEFICITS AG EXPENDITURE / INVESTMENT

2 LIQUIDITY TRAP – FDI – REMITTANCES -TRADE CREDIT AG. FINANCE

4 DOMESTIC AND ASSISTANCE POLICY RESPONSES SECTOR RESPONSE

IMPACT OF THE FINANCIAL CRISIS ON AGRICULTURE

IMPLICATIONS OF THE FINANCIAL CRISIS DEMAND, PRICES, AND AFRICAN EXPORTS

IMPACT ON AGRICULTURAL EXPORTSIMPACT ON OVERALL AFRICAN EXPORTS

Source: IFPRI/Estrades and Laborde Price data from IMF World Economic Outlook

Page 19Source: IFPRI/Estrades and Laborde

Finance constraints (actual country estimates)

Page 20

Algeria

AngolaBenin

Botswana

Burkina Faso

Burundi

C. Africa Rep.

C. IvoireCameroon

Cape Verde

Chad

Comoros

Congo

Congo (DRC)

Djibouti

Egypt

Eq. Guinea

Eritrea

Ethiopia

G. Bissau

Gabon

Gambia

Ghana

Guinea

Kenya

Lesotho

Liberia

MadagascarMalawi Mali

MauritaniaMauritius

Morocco

MozambiqueNiger

Nigeria

Rwanda

S. Leone

S. Tome and Principe

Senegal

Seychelles

Somalia

South Africa

Sudan

Swaziland

Tanzania

Togo

TunisiaUganda

Zambia

Zimbabwe

-4-2

02

4L

og

of ag

ricu

ltura

l G

DP

0 2 4 6 8Log of Net FDI

FDI AND AGRICULTURAL SECTOR GROWTH IN AFRICA

Source: IFPRI/Badiane and Ulimwengu

Page 21

FINANCIAL CRISIS, DEVELOPMENT ASSISTANCE AND AGRICULTURAL GROWTH

Algeria

AngolaB. Faso

Benin

BurundiC. African Rep.

C. Ivoire

Cameroon

Cape Verde

Chad

Comoros

Congo

DRC Djibouti

Egypt

Gambia

Ghana

Guinea

Guinea-Bissau

Kenya

Lesotho

Liberia

Madagascar

MalawiMali

MauritaniaMorocco

MozambiqueNamibia

Niger

Nigeria

Rwanda

S. T.and Principe

Senegal

Sierra Leone

Somalia

Sudan

Swaziland

Tanzania

Togo

Tunisia

Uganda

Zambia

Zimbabwe

-50

51

0A

gricu

ltura

l gro

wth

(%

)

0 50 100 150Per capita aid (us dollar)

1970-1980

Algeria

Angola

B. Faso

Benin

Burundi

C. African Rep.

C. Ivoire

Cameroon

Cape Verde

Chad

Comoros

CongoDRC DjiboutiEgypt

GambiaGhana

Guinea

Guinea-Bissau

KenyaLesotho

Liberia

Madagascar

Malawi

Mali

Mauritania

Morocco

Mozambique

Namibia

Niger

Nigeria

Rwanda

S. T.and Principe

SenegalSierra Leone Somalia

Sudan

Swaziland

Tanzania

Togo

Tunisia

Uganda

Zambia

Zimbabwe

-50

51

0A

gricu

ltura

l gro

wth

(%

)

0 50 100 150 200 250Per capita aid (us dollar)

1981-1990

Algeria

Angola

B. Faso

Benin

Burundi

C. African Rep.

C. IvoireCameroon Cape Verde

Chad

Comoros

Congo

DRC DjiboutiEgypt

GambiaGhana

Guinea Guinea-Bissau

Kenya

Lesotho

Liberia

Madagascar

Malawi

Mali

Mauritania

Morocco

MozambiqueNamibia

Niger

Nigeria

Rwanda

S. T.and Principe

Senegal

Sierra Leone

Somalia

Sudan

Swaziland

TanzaniaTogoTunisiaUganda

Zambia

Zimbabwe

-10

-50

51

0A

gricu

ltura

l gro

wth

(%

)

0 100 200 300 400Per capita aid (us dollar)

1991-1999

Algeria

Angola

B. FasoBenin

Burundi

C. African Rep.

C. Ivoire

Cameroon

Cape Verde

ChadComoros

Congo

DRC

Djibouti

Egypt GambiaGhanaGuinea

Guinea-Bissau

Kenya

Lesotho

Liberia

MadagascarMalawi

Mali

Mauritania

Morocco

Mozambique

Namibia

Niger

Nigeria

Rwanda

S. T.and Principe

Senegal

Sierra Leone

SomaliaSudan

Swaziland

Tanzania

TogoTunisiaUganda

Zambia

Zimbabwe-50

51

01

5A

gric

ultu

ral g

row

th (

%)

0 50 100 150 200 250Per capita aid (us dollar)

2000-2006

Source: IFPRI/Badiane and Ulimwengu

Page 22

MACROECONOMIC RAMIFICATIONS OF THE FINANCIAL CRISIS IN AFRICA

Source: IMF World Economic Outlook

Page 23

THE IMPACT OF THE FINANCIAL CRISIS ON GROWTH TRENDS IN AFRICA

Source: IMF World Economic Outlook







Page 25

THE COMPREHENSIVE AFRICA AGRICULTURE DEVELOPMENT PROGRAMME (CAADP)

PILLARFRAMEWORKS

SECTORCOMPACTS

KNOWLEDGESYSTEMS

BETTER POLICY, GROWTH, POVERTY, AND FOOD SECURITY OUTCOMES

STRATEGIC ISSUES

SUCCESS FACTORS

BEST PRACTICES

POLICY ELEMENTS

LT INVEST. OPTIONS

COMMITMENTS-SECTOR POLICIES

- BUDGET POLICIES

- DEV. ASSISTANCE

- POLICY DIALOGUE

BENCHMARKING

PEER REVIEW

MUTUAL LEARNING

SHARED LT FRAMEWORKFOR ACTION

DEVELOPMENT PARTNERSHIP ANDACCOUNTABILITY

EVIDENCE/OUTCOMEBASED PLANNING AND

IMPLEMENTATION

1. MAKE SURE THAT THE COUNTRY IS ON TRACK TO ACHIEVE THE CAADP GROWTH AND BUDGETARY OBJECTIVES, IF NOT

2. IDENTIFY EVENTUAL GAPS IN TERMS OF SECTOR POLICY, BUDGETARY, AND INVESTMENT MEASURES

OBJECTIVES AND OUTCOMES OF COUNTRY ROUND TABLE AND COMPACT

OBJECTIVE OF ROUND TABLES

ELABORATION OF A COUNTRY CAADP COMPACT TO GUIDE THE IMPLEMENTATION OF CAADP IN THE LONG TERM , INCLUDING:

1. COMMITMENTS IN TERMS OF SECTOR POLICIES, PUBLIC EXPENDITURES, AND DEVELOPMENT ASSISTANCE

2. ESTABLISHEMENT OF PARTNERSHIPS AND ALLIANCES FOR SUCCESSFUL IMPLEMENTATION OF CAADP

3. CREATION OF A MECHANISM FOR PEER REVIEW AND DIALOGUE TO TRACK IMPEMENTATION PERFORMANCE AND THE PROGRESS IN MEETING THE AGREED ON COMMITEMENTS

OUTCOMES OF ROUND TABLES:CAADP COMPACT

CREATING THE CONDITIONS FOR BETTER DEVELOPMENT OUTCOMES

I. DEVELOPED COMPREHENSIVE AND OBJECTIVE DRIVEN STRATEGY

FRAMEWORK WITH LIMITED SET OF CLEAR TARGETS

II. EVALUATE COUNTRY EFFORTS AGAINST DEFINED TARGETS SHARED INVESTMENT AND PARTNERSHIP

FRAMEWORK

III. SPECIFY ALTERNATIVE ACTION SCENARIOS AND OUTCOMESBASELINES - MILESTONES - ACTION TARGETS - TOOLS

IV. SET UP BENCHMARKING AND LEARNING MECHANISMSKNOWLEDGE SYSTEMS INFRASTRUCTURE

V. ESTABLISH POLICY REVIEW AND DIALOGUE PLATFORM

INCLUSIVE FORA AT COUNTRY LEVEL AND BEYOND







Actual Poverty Rate in 1990

LONG TERM CHALLENGE NO. 1

BRIDGING THE GROWTH GAP TO ACCELERATE POVERTY REDUCTION

LONG TERM CHALLENGE NO. 2

BRIDGING THE EXPENDITURE GAP TO ACCELERATE GROWTH

Actual Poverty Rate in 1990

Source: Dollar a Day Poverty Rates from World Bank, PovCal Net, 2008 [poverty line $1.25]; Projected CAADP Poverty Rates from various IFPRI country CAADP Growth Simulation Studies

THE EXPENDITURE CONVERGENCE AGENDA:MAXIMIZING SYNERGY BETWEEN GROWTH AND SOCIAL INVESTMENTS

Sources: Government spending: Global database on public spending, DSGD, IFPRI, 2009; and ODA: OECD, 2008

HEALTH SERVICES EDUCATION SERVICES

EFFECT OF 10% INCREASE IN SERVICES EXPENDITURE ON SOCIAL OUTCOMES, AGRICULTURAL EFFICIENCY, AND POVERTY

BASIC STRATEGIC QUESTIONS

2HOW TO MAXIMIZE SYNERGY BETWEEN SOCIAL SERVICES AND PRODUCTIVITY ENHANCING INVESTMENTS

MEETING THE DOUBLE CHALLENGEOF GROWTH ACCELERATION AND SOCIAL PROTECTION

3 HOW TO EXPLOIT GROWTH EXTERNALITIES OF SOCIAL SERVICES

4HOW TO IMPROVE CONSIDERATION OF GROWTH SYNERGIES IN BUDGET PLANNING AND NEGOTIATIONS

Page 34

CONCLUSIONS


HAS REMARKABLE RECOVERY COMPENSATED FOR THE 2.5 DECADE ECON. STAGNATION? NO

o STILL LARGE POCKETS OF POVERTY

o PROGRESS TOWARDS POVERTY MDG PICKED UP PACE BUT NOT ENOUGH FOR MOST

o NEED TO ACCELERATE AND BROADEN GROWTH TO REDUCE POVERTY FASTER

1

Page 35

CONCLUSIONS


GLOBAL CRISES ARE A THREAT BUT ALSO FULL OF OPPORTUNITIES FOR AFRICAN ECONOMIES

AFRICAN ECONOMIES HAVE SHOWN GREATER RESILIENCE THAN DURING PAST CRISES

AFRICAN AGRICULTURE IS WELL POSITIONED TO COMPETE AND BENEFIT FROM LONG TERM GLOBAL PRICE TRENDS

UNPRECEDENTED CONTINENT WIDE EFFORTS UNDER CAADP TO:o IMPROVE POLICY PLANNING / IMPLEMENTATION o RAISE GOVERNMENTS INVESTMENT IN AGRICULTURE.

2

Page 36

CONCLUSIONS


THE RECOVERY OF LAST 15 YEARS HAS CREATED A STRONG FOUNDATION TO BUILD UPON

BETTER CONDITIONS FOR HIGHER RETURNS TO INVESTMENTS IN AND ASSISTANCE TO AFRICA

UNPRECEDENTED CONTINENT WIDE EFFORTS UNDER CAADP TO:

o IMPROVE POLICY PLANNING / IMPLEMENTATION

o RAISE GOVERNMENTS INVESTMENT IN AGRICULTURE

o AND SUSTAIN / DEEPENTHE RECOVERY PROCESS

3

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Friday, September 11, 2015 AGRICULTURAL AND ECONOMC GROWTH RECOVERY IN AFRICA IN THE CONTEXT OF GLOBAL CRISES OUSMANE BADIANE Director for Africa International