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Growth, Poverty and Agriculture in Africa: Linkages and Policy Joachim von Braun Director General International Food Policy Research Institute Accra, Nov. 2007 IFPRI’s Strategic Framework Research Partners, stakeholders, donors, IFPRI Board and Staff Influence on policies Capacity strengthening Policy communication Policymakers, media, opinion leaders, and IFPRI Impact on poor people ECOWAS AU IFPRI in Africa IFPRI Offices SAKSS Nodes COMESA NEPAD Africa on the move: Overview 1. Growth for poverty reduction 2. Africa’s new growth and development initiatives (NEPAD and CAADP) 3. Supporting implementation of Africa’s growth agenda AFRICA IS GROWING AGAIN Agriculture, value added (annual % grow th) 9 6 3 2006 2004 2002 2000 1998 1996 1994 1992 1990 1988 1986 1984 -3 1982 0 1980 Percent (%) GDP grow th (annual %) GROWTH IS SPREADING Agriculture GROWTH IS SPREADING TRADE PERFORMANCE IS PICKING UP 125 160 155 150 145 140 120 115 135 130 125 120 110 105 100 115 110 105 100 95 95 2001 2002 2003 World 2004 2005 Africa Index of Ag. Export Volume (2000 =100) 2001 2002 2003 World 2004 2005 Africa Index of Ag. Export Value (2000 =100) 10 0 Source: 2006 Worldwide Governance Indicators, The World Bank, 2007 South Africa Botswana Namibia Ghana Madagascar Senegal Lesotho Mozambique Tanzania Rwanda Mali Benin Uganda Ethiopia Gabon Mauritania Kenya Swaziland Gambia Zambia Niger Burkina Faso Malawi Cameroon Nigeria Djibouti Sierra Leone Sudan Guinea-Bissau Angola Eritrea Burundi Congo Eq. Guinea Chad Liberia Central Africa Republic Cote d'Ivoire Guinea Zimbabwe Togo Congo, Dem. Rep. Somalia Percentile Index (%) More and more countries are witnessing changes towards improved ‘Government Effectiveness’ 70 60 1996 50 2006 Mauritania 20 Madagascar Rwanda Ethiopia Cote d'Ivoire 40 Ghana 30 Eritrea Nigeria Sudan Angola Zimbabwe Chad Liberia T ogo T anzania Niger Congo, Dem. Rep. The world food system globalizes top 10: $37 bln Food retailers Agricultural top 10: $363 bln top 10:$777bln • Nestle • Cargill • Unilever • ADM • Kraft Foods • Wal-Mart • Carrefour • Royal Ahold • Metro AG • Tesco value added: $1,315 bln 450 million >100 ha: 0.5% < 2 ha: 85% Source: von Braun, 2005 $4,000 billion • Syngenta • Bayer • BASF • Monsanto • DuPont Farms Food processors and traders Consumers Agricultural input industry Prices: Agricultural and energy prices increasingly correlate 500 450 400 350 Corn Rice Sugar Oil seeds Crude oil (right) 300 70 60 50 40 250 30 200 150 20 100 10 50 0 19 90 19 91 19 92 19 93 19 94 19 95 19 96 19 97 19 98 19 99 20 00 20 01 20 02 20 03 20 04 20 05 20 06 20 07 0 …and price variations are up Source: IMF 2007; OECD 2005; World Bank 2007 Climate change & energy threats • By 2020, 75-250 million people expected to be exposed to drought (mainly in Africa) - Adverse effect on livelihoods & food security - Exacerbate malnutrition & water-related problems - By 2020, yields could be reduced by up to 50% (rain-fed agriculture) Energy: biofuels - food / biomass competition Higher food prices (scenarios: 30 to 80% + prices) Instabilities increase (new risks for Africa’s poor) Looking beneath the dollar-a-day line Subjacent poor ($0.75 and <$1): 485 mln in 2004 LAC 19 mln EAP 109.3 mln ECA 3 mln MENA 3.3 mln SSA 87.0 mln SA 263.6 mln Medial poor ($0.50 and <$0.75): 323 mln in 2004 LAC 16.6 mln ECA 1.1 mln EAP 51 mln MENA 0.9 mln SSA 90.2 mln SA 162.9 mln Ultra poor (<$0.50): 162 mln in 2004 LAC MENA ECA 0.4 mln 11.5 mln 0.2 mln EAP 8.8 mln SA 19.7 mln SSA 121 mln Source: Ahmed et al. IFPRI, 2007 The share of the poorest in SSA is growing Change in the share of poor living below .50$/day 1990-2004 0.5 0.06 0.14 % point change 0 -0.5 Developing World -0.7 -1 East Asia & Pacific -0.9 South Asia -1.5 -1.4 L America & Caribb. Sub-Saharan Africa -2 Source: Ahmed et al. 2007 MDG progress (GHI), growth & governance GHI progress indicator 1.00 Brazil Ghana Ethiopia 0.75 0.50 Nigeria 0.25 0.00 -10 -0.25 Kenya -5 China India Uganda Tanzania 0 5 10 -0.50 -0.75 -1.00 Congo DR Annual growth rate in GNI per capita, 1990-2004 (in %) low government effectiveness (1998) higher governnment effectiveness (1998) Source: Wiesmann 2007. Low gov. effectiveness is assigned to countries in the lowest quartile of Worldwide Governance Indicators. What explains the high poverty and hunger incidences in Africa? 1. Low agricultural productivity and output growth 2. Poor access to infrastructure, production inputs and rural services (e.g. health and education) 3. Loss of competitiveness in domestic, regional and world markets 4. Years of neglect of food staples and livestock sectors 5. Inadequate public and private sector investments, especially in rural areas 6. Weak enabling environment: governance, institutions, standards and regulations 7. Low capacity to deal with vulnerabilities to political instability and natural shocks (droughts, disease and pests, health, such as HIV/AIDS and Malaria) The Strategic Square CONFLICT & Governance Innovation & Capacity ECONOMIC GROWTH; Agriculture Services & infrastructure THE COMPREHENSIVE AFRICA AGRICULTURE DEVELOPMENT PROGRAMME MAIN FEATURES & PRINCIPLES AGRICULTURE-LED GROWTH TO REACH MDG1 TARGET GOAL OF 6% SECTOR GROWTH RATE INCREASED PUBLIC INVESTMENT (10% BUDGET SHARE) FOUR MAIN PILLARS TO GUIDE INVESTMENT Land and water management Agribusiness and Infrastructure Hunger and social safety nets Science and Technology POLICY EFFICIENCY, PEER REVIEW, ACCOUNTABILITY EXPLOITATION OF REGIONAL COMPLEMENTARITIES INCLUSIVENESS: FARMERS, AGRIBUSINESS, CIVIL SOCIETY Supporting implementation of Africa’s growth agenda • Analytical Agenda and M&E of CAADP • Piloting Country Strategy Support • Establishment of ReSAKSS • Providing Roundtable Support to Implement CADDP at the National Level Analytical Agenda and M&E for CAADP Implementation Developing Analytical Agenda to Support • Pillar 1: Land and water management • Pillar 2:Regional integration and trade, market access, agribusiness, and rural infrastructure • Pillar 3: Food security • Pillar 4: Agricultural research and technology PROGRESS TOWARDS CAADP GROWTH TARGET Growth Rate (%) 18 15 2000-2003 12 2003-2005 CAADP 6% target 9 6 3 0 -3 -6 -9 -12 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 Sample of countries (Total =37) Source: Fan et al., IFPRI (forthcoming) Rwanda Guinea-Bissau Ghana Niger Burundi Togo Tanzania Burkina Faso Swaziland Zambia Central African Republic Senegal Nigeria Benin Mozambique Cameroon Malawi Ethiopia Kenya Uganda Mauritania Cote d'Ivoire Zimbabwe Lesotho Gambia Chad Mali Namibia Madagascar Guinea Percent of Ag to Total Spending (%) Progress against CAADP 10% goal (2004) 25 20 15 10 5 0 Analysis Support • 1. How agricultural growth vs. non agricultural growth contributes to national development goals • 2. How much investment is needed to support needed agricultural growth • 3. How to allocate agricultural investment • 4. What are other complementary polices are needed to help the poor who will not benefit from agricultural growth • 5. How to reform the governance structure Ghana Ghana Index (1985=100) 150 125 Agriculture Producivity 100 Household Income Poverty 75 Hunger Source: IFPRI work in Progress 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993 1992 50 GHI Trends in Africa 1981 - 2003 Sub-Saharan Africa, Trends 1981-2003 50 45 Global Hunger Index 40 Ethiopia 35 Zambia 30 Mozambique 25 Malawi Kenya 20 Senegal Uganda 15 Ghana 10 5 0 0 500 1,000 1,500 Gross National Income per capita 2,000 2,500 Conclusions: New partnering with Africa •African economic growth accelerates •Agriculture is essential element of growth •Institutional reforms for markets & infrastructure Strategic support at National and regional level Facilitating learning across countries