Transformational Investment in Agri-food Systems and Youth Employment

Lulama Ndibongo TraubCo-Director: Bureau of Food and Agricultural Policy (BFAP), Stellenbosch University

South Africa

Dr. Felix Kwame YeboahAssistant Professor, Michigan State University (MSU)

USA

Africa in the 21st CenturyAfrica is beyond bemoaning the past for its problems. The task of

undoing that past is ours, with the support of those willing to join us in

a continental renewal. We have a new generation of leaders who

know that we must take responsibility for our own destiny,

that we will uplift ourselves only by our own efforts in partnership with

those who wish us well.-- Nelson Mandela

Seven MegatrendsTrend #1: DemographicsTrend #2: Global food & energy pricesTrend #3: Rapid Changes in Land Distribution: Rise of

the medium-scale farmerTrend #4: Land Degradation

Trend #5: Income growth & distribution

Trend #6: Climate Change

Trend #7: Big data & Disruptive Technology

Seven MegatrendsTrend #1: Demographics Rapid population growth Youth bulge

Trend #2: Global food & energy pricesTrend #3: Rapid Changes in Land Distribution: Rise of

the medium-scale farmerTrend #4: Land Degradation

Trend #5: Income growth & distribution

Trend #6: Climate Change

Trend #7: Big data & Disruptive Technology

Trend #1: Rapid Population Growth

SSA population growth projections

Source: World Bank Development Group, 2015

6.17.2 6.8

0.92

2.13.8

0

2

4

6

8

10

12

2015 2050 2100

Billi

ons o

f peo

ple

Rest of world Sub-Saharan Africa

Implication?

Regional shares in commodity consumption growth: 2016-2026

Source: OECD/FAO (2017), “OECD-FAO Agricultural Outlook”, OECD Agriculture statistics (database), http://dx.doi.org/10.1787/agr-data-en.

8.1

10.2

16.1

13.8

9.7

2.8

2.0

19.05.7

3.5

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Wheat Rice Maize Othercoarsegrains

Fresh dairy Meat Fish Roots andtubers

Sugar Vegetableoil

Rest of World OECD Southeast Asia Sub-Saharan Africa China India

SSA Total Food Imports from 7 to 38 billion USD (2001-2016)

Source: ITC Trade Map

USD

Bill

ions

%

0

5

10

15

20

25

30

35

40

45

50

0

5

10

15

20

25

30

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Total Food Importsl_SSA Total Food Imports_nonSSA Total value food imports as % value of domestic agriculture production

Can Africa Feed Itself?

SSA Total Food Imports from 7 to 38 billion USD (2001-2016)

Source: ITC Trade Map

USD

Bill

ions

%

0

5

10

15

20

25

30

35

40

45

50

0

5

10

15

20

25

30

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Total Food Importsl_SSA Total Food Imports_nonSSA Total value food imports as % value of domestic agriculture production

Is this cause for concern?

Food Import Growth and Employment: 2001-2010Manufacturing employment shares declined more rapidly for food import reliant countries

Source: GGDC and World Bank

Botswana Ghana

Kenya

Malawi

Mauritius

Nigeria

Senegal

Tanzania

-.04

-.02

0.02

.04.06

.09 .095 .1 .105 .11avg_g_imp_value

d_man_em_share Fitted valuesAver

age

annu

al %

cha

nge

in sh

are

of la

bor f

orce

en

gage

d in

man

ufac

turin

g

Average annual import value growth rate (%)

Off-farm Agri-food System jobs largely in commerce and less in agro-processing

Source: Yeobah and Jayne, 2017

Off-farm Agri-food System jobs largely in commerce and less in agro-processing

Source: Yeobah and Jayne, 2017

Are we exporting our jobs?

Strategies

“When the solution is simple, God is answering” – Albert Einstein

Primary Agricultural Level:

Growth driven by efficiency

Strategies

“Implement policies that promote broad-based agricultural growth”

Agricultural Output Growth Decomposition: 1961 - 2013

Source: Jayne, T. S., World bank data

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

SSA, Central SSA, Eastern SSA, Horn SSA, Sahel SSA, Southern SSA, Western SSA, Nigeria SSA TOTAL,without South

Africa

Irrigation Land expansion Input Intensification TFP

Strategies

Primary Agricultural Level:“Implement policies that promote broad-based agricultural growth”

Improved efficiency innovationInnovation increase in public expenditure in R&D and extension services

StrategiesAgriculture budget allocation by categories (%)

R&D Extension & Training

Burkina Faso2006 3.2% 9.2%2015 1.8% 6.3%

Burundi2006 27.4% 1.9%2015 2.1% 11.0%

Ghana2006 6.7% 12.0%2012 4.2% 8.3%

Kenya2007 12.7% 16.9%2015 5.9% 26.8%

Malawi2006 0.7% 3.3%2013 3.1% 3.6%

Mali2006 0.2% 3.3%2015 4.3% 1.2%

Mozambique2009 5.7% 7.6%2013 3.0% 7.6%

Senegal2010 0.2% 4.1%2015 0.9% 5.0%

Tanzania2007 6.3% 14.8%2015 7.1% 16.2%

Uganda2007 7.6% 16.1%2016 8.1% 23.0%

Benin2008 2.6% 13.2%2015 1.5% 7.3%Source: MAFAP, 2017

StrategiesAgriculture budget allocation by programs (%)

Country Year R&D Extension & Training

Burkina Faso2006 3.2% 9.2%2015 1.8% 6.3%

Burundi2006 27.4% 1.9%2015 2.1% 11.0%

Ghana2006 6.7% 12.0%2012 4.2% 8.3%

Kenya2007 12.7% 16.9%2015 5.9% 26.8%

Malawi2006 0.7% 3.3%2013 3.1% 3.6%

Mali2006 0.2% 3.3%2015 4.3% 1.2%

Mozambique2009 5.7% 7.6%2013 3.0% 7.6%

Senegal2010 0.2% 4.1%2015 0.9% 5.0%

Tanzania2007 6.3% 14.8%2015 7.1% 16.2%

Uganda2007 7.6% 16.1%2016 8.1% 23.0%

Benin2008 2.6% 13.2%2015 1.5% 7.3%

StrategiesAgriculture budget allocation by programs (%)

Country Year R&D Extension & Training

Burkina Faso2006 3.2% 9.2%2015 1.8% 6.3%

Burundi2006 27.4% 1.9%2015 2.1% 11.0%

Ghana2006 6.7% 12.0%2012 4.2% 8.3%

Kenya2007 12.7% 16.9%2015 5.9% 26.8%

Malawi2006 0.7% 3.3%2013 3.1% 3.6%

Mali2006 0.2% 3.3%2015 4.3% 1.2%

Mozambique2009 5.7% 7.6%2013 3.0% 7.6%

Senegal2010 0.2% 4.1%2015 0.9% 5.0%

Tanzania2007 6.3% 14.8%2015 7.1% 16.2%

Uganda2007 7.6% 16.1%2016 8.1% 23.0%

Benin2008 2.6% 13.2%2015 1.5% 7.3%

StrategiesAgro-Processing Level:

“Develop and implement industrial policy aimed at reducing costs, improving competitiveness and diversifying the economic base”

Strategies

• Reducing the cost of doing business– Improvements in physical infrastructure (cold chain

development)– Low-cost reliable energy

30,000 broilers (ZAR 1 million) lost in one night!

Source: Meyer, Ferdi (2017)

Stylized Facts of Structural Transformation

Source: World Bank Development Group, 2015

0

0.05

0.1

0.15

0.2

0.25

0.3

0.35

0.4

1970

1971

1972

1973

1974

1975

1976

1977

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

ag_emp_share man_emp_share service_emp_share

Mauritius Sectoral Shares of Employment: 1970 – 2010

Ease of Doing Business Index: 2017

Source: World bank data

0

20

40

60

80

100

120

140

160

180

200

Mauritius Kenya Botswana SouthAfrica

Zambia Malawi Ghana Tanzania Senegal Nigeria Ethiopia

Ease of Doing Business Rank Getting Electricity

We need to get it right

Youth Bulge & Employment

30Source: United Nations, Department of Economic and Social Affairs, Population Division (2013).

Thank You